Health Industry Execs Will Make A Bundle (MarketWatch)

[highplainsdem]

http://insurancenewsnet.com/article.aspx?id=150280&type=lifehealth

MarketWatch
December 29, 2009 Tuesday 12:18 AM EST
SECTION: NEWS & COMMENTARY; Commentary; Brett Arends' ROI
LENGTH: 1182 words
HEADLINE: Health industry execs will make a bundle
BYLINE: Brett Arends, WSJ.com

BOSTON (MarketWatch) -- From the boardrooms at the top of the big health-care companies, the future looks a lot brighter today than it did just a few months ago.

Sure, the haggling over "health-care reform" isn't finished just yet. The House and Senate still have to scrum down and reconcile their two bills. But the toughest battles are now over. And Wall Street is already rendering its verdict.

The winners? Most of the health-care industry -- from "Big Pharma" to the health insurers.

-snip-

What do these stock gains mean for the honchos?

Plenty. Top executives and directors tend to be compensated mostly in stock, including shares, restricted shares, options, and other equity-related doodads. These tend to be couched and designed in a myriad of different ways -- for example some awards only have value when shares rise above a certain price, while others may not be formally transferred into the executive's hands, a process known as "vesting," for years. When the shares go up they are worth more.

These stock and options "account for between 80% and 85% of compensation" at the top of the major health insurers and other big companies, says Paul Hodgson, senior research associate at The Corporate Library, a firm specializing in corporate governance. "Big moves in the stock market," such as those which have occurred for major health insurers in recent months "are very significant for executive compensation," he adds.

It is one of life's mysteries that so much of the public -- and media -- still focus on the trivialities of executive pay, like salary and bonus. This is like going to a three-star restaurant and worrying about the cost of the bread rolls.

So how much have health insurance bosses made in the past few months? Putting an exact number on it is next to impossible. Not only are the calculations Byzantine, but company proxy filings -- which contain the fullest data -- are only filed once a year, usually in the early months. So the data can only be approximate.

But this deters too many from trying. It shouldn't. You can run some rough numbers. By my math the top figures at the big five health care companies -- adding Humana Inc. (HUM) and Cigna Corp. (CI) to the three above -- have certainly shared surely well over $100 million in gains on their stock and options in the last three months.

[nightrain]

1. knr. thanks for posting this. If passed and signed, the individual mandate to purchase

a private corporation's product--health insurance--is a terrible and dangerous precedent that will have negative ramifications for Dems for years.

It is not a traditional Democratic value to force people to purchase a private corporation's product. What a horrendous mistake!

[highplainsdem]

2. I agree. I can hardly believe how bad the bill is.

[highplainsdem]

3. kick

[maryf]

4. Gee, maybe in place of public options

they should offer stock options...Greed rules

K&R