BCBS CEOs received bigger raises in 2020 than execs at for-profit insurers, report says

The CEOs of Blue Cross and Blue Shield insurers received larger compensation increases in 2020 compared with their for-profit counterparts, a recent report found.

Blue Cross Blue Shield of Minnesota CEO Craig Samitt’s 109% year-over-year increase represented the biggest pay bump to $3.3 million in 2020, according to an AIS Health analysis of CEO compensation at the 42 largest insurers by commercial enrollment. A BCBS Minnesota spokesperson noted that Samitt retired in May and declined to comment on his compensation.

Hawaii Medical Service Association CEO Mark Mugiishi’s 89.5% raise to $1.8 million represented the second-largest increase, and Independence Blue Cross’s now-retired CEO Dan Hilferty’s 73.6% year-over-year bump to $9.9 million represented the third-largest rise in 2020. HMSA and Independence did not immediately respond to an interview request.

Across all health insurers, CEOs received an average 7.5% increase in 2020 compared with 2019, according to AIS data. Blues CEOs were generally more likely to receive a raise in 2020, although they still were paid less than the heads of for-profit insurers, the report said. State regulators can scrutinize Blues operations more heavily than their for-profit counterparts, and sometimes their boards of directors will limit their CEOs pay to avoid red flags, AIS said. Changes in total compensation at for-profit insurers were generally due to a dip in company stock prices.

CareSource CEO Erhardt Preitauer’s 21% year-over-year drop represented the largest pay decrease among insurers, with his total compensation falling to $1.8 million in 2020. CareSource did not respond to an interview request. But Preitauer was not the only insurer executive to see his pay fall in 2020.

Four of the six CEOs at the largest publicly traded health insurers saw their total compensation decrease in 2020 compared with 2019. Only Cigna Corp. CEO David Cordani and Anthem’s Gail Boudreaux saw their compensation rise year-over-year.

Cordani received a 3.2% year-over-year raise to $19.9 million in 2020, along with a $189,898 change in pension and deferred compensation boost, AIS said. Boudreaux’s compensation rose 10.5% to $17.1 million in 2020. Most of their pay increases can be credited to a rise in their company’s stock price, which contributes to their total compensation, AIS said. Neither insurer responded to an interview request.

While Centene CEO Michael Neidorff earned the top salary among all insurers in 2020, his compensation still fell 5.6% to $24.9 million at the end of the year. AIS credited Neidorff’s drop to a fall in his stock award, which dipped from $16.9 million in 2019 to $14.9 million in 2020.

Researchers analyzed data from state insurance departments and U.S. Securities and Exchange Commission filings. CEOs total compensation includes their base salary, bonuses, stock awards and more.