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Read Making a Killing

home / healthcare / in the media

The Atlanta Journal-Constitution
Jun 12, 2004

by ANDY MILLER

Health execs may get hefty bonuses;

Georgia Blue Cross officials could average $425,000 in acquisition.
Thirty-two executives with Blue Cross and Blue Shield of Georgia could receive bonuses averaging $425,000 if the insurer's parent company is acquired by Indiana-based Anthem.

And any of the Georgia officers terminated or demoted after the transaction would receive severance pay averaging $912,000. Departing Blue Cross executives also would be eligible for the vesting of stock options worth a combined $21.2 million.

Those Georgia pay figures were released by Blue Cross this week.

California is the last of 11 states that must approve Anthem's proposed $16.4 billion acquisition of California-based WellPoint Health Networks, Blue Cross' parent company, for it to take place.

One issue raised at a hearing Wednesday in the California Legislature is that 293 WellPoint executives, including the 32 Blue Cross executives, could receive a combined $147 million to $356 million as a result of a merger.

The payouts, which would be made by Anthem, have been denounced by California consumer groups. One group, the Foundation for Taxpayer and Consumer Rights, said that if the compensation is paid out as planned, policyholders could end up with higher premiums and co-pays or fewer benefits.

The retention bonus averaging $425,000 kicks in if a Georgia executive stays two years with the merged company, which will be called WellPoint Inc.

Georgia Insurance Commissioner John Oxendine approved the merger Tuesday. Shareholders of Anthem and WellPoint are scheduled to vote on the merger June 28.

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