Humana's board changed performance goals so execs could cash in stock awards

Humana's board of directors adjusted its membership growth goal when it became clear the target wouldn't be met, allowing top executives to cash in stock awards based on performance, WDRB reports, citing a recent proxy statement.

In February 2015, Humana's board outlined two goals: one for strategic membership growth and another for return on invested capital. The board tied stock awards to the results. However, the board tossed the membership growth goal when it became unattainable, and calculated stock awards only on return on invested capital.

In the proxy statement, Humana attributed its decision to lower goals for performance-based awards to "the challenging operating environment" it experienced during its failed attempt to merge with Aetna from 2015 to 2017.

Had Humana retained the goals outlined in 2015, Humana CEO Bruce Broussard, who made nearly $20 million in 2017, would have brought home $4.9 million less, WDRB reports. Including Mr. Broussard, the adjustment allowed top executives to cash in $8.4 million in stock awards they wouldn't have.

More articles on payer issues:
BCBS forms BCBS Institute to partner with Lyft, give members rides to Walgreens, CVS pharmacies
Hillcrest HealthCare System, BCBS reach multiyear contract
Former BCBS of Minnesota CEO failed to disclose $20k consulting payments to board

© Copyright ASC COMMUNICATIONS 2019. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.

 

Top 40 Articles from the Past 6 Months