After resisting several shareholder proposals for an advisory vote about executive compensation, WellPoint Inc. will now give its investors a “say on pay” vote every year.
All publicly traded companies have to allow “say on pay” votes every two or three years under the Dodd-Frank financial reform legislation passed last year.
After several failed attempts, WellPoint shareholders last year approved a “say on pay” advisory vote, which is part of the reason WellPoint’s board now plans to hold one annually, according to company spokesman Tony Felts.
“The adoption of this proposal and others is designed to enhance the rights of our shareholders and the company's governance,” Felts wrote in an email. WellPoint will hold its annual shareholders meeting on May 17.
Of course, WellPoint’s board argues that its multimillion-dollar pay packages are a bargain.
“In 2010, fixed compensation (salary and benefits) made up only 11 percent (for the CEO) to 22 percent (for the other Named Executive Officers) of target total compensation,” reads a statement in WellPoint’s proxy, filed recently with the U.S. Securities & Exchange Commission.
The board added that if there is a “significant vote” against the pay of WellPoint’s top five executives, the board will “consider our shareholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.”
WellPoint CEO Angela Braly’s total compensation rose 3 percent last year to $13.4 million, as WellPoint’s operating and stock performance improved even as enrollment continued to decline in the face of high unemployment.
Braly's annual salary remained flat at $1.1 million, but her performance-based bonus rose more than 80 percent to $2.7 million.
A WellPoint spokeswoman told the Associated Press in March that the company's pay formula rewards executives for improving enrollee health, boosting share prices and meeting other goals.
"For the CEO, almost 90 percent of total target compensation is based on company performance and is tied to meeting established goals," Kristin Binns said in a statement.
Compensation for WellPoint’s chief financial officer, Wayne DeVeydt, fell 44 percent last year compared to 2009, as he received a much smaller stock award. His total compensation was valued at $7.2 million.
Pay for Brian Sassi, chief of WellPoint’s consumer business unit, rose 33 percent to $5.4 million due to larger stock awards and bonuses.