Shareholders of WellPoint Inc. on Tuesday voted to approve hefty pay for the company’s executives and also for the right to weigh in annually on future executive compensation.
The votes came at the Indianapolis-based health insurer’s annual meeting of shareholders, held at the downtown Hilton hotel. Vote tallies were not immediately available after the meeting.
A year ago, WellPoint shareholders approved a measure that demanded an annual “say on pay” vote, which would not be binding but would allow shareholders to express displeasure with excessive pay to top brass.
Since then, the U.S. Congress required all publicly traded companies to allow “say on pay” votes as part of the Dodd-Frank financial reform legislation passed last year.
The law requires a “say on pay” vote every two or three years, but WellPoint’s board recommended an annual vote. And shareholders agreed on Tuesday.
Many other local companies, such as Eli Lilly and Co. and CNO Financial Group Inc., also this year approved annual “say on pay” votes.
The votes don’t require companies to do anything. Only if shareholders register a “significant vote” against the pay of WellPoint’s top five named executives will the company’s board consider "shareholders’ concerns, and the compensation committee will evaluate whether any actions are necessary to address those concerns,” the board members wrote in the company’s proxy statement sent to shareholders.
Angela Braly, WellPoint’s chairwoman and CEO, received total compensation last year of $13.4 million, an increase of 3 percent over the previous year, 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.
At the meeting, shareholder Karen Green-Stone noted that Braly’s pay is equivalent to the salaries of hundreds of schoolteachers. She then asked, “Would you kindly tell us why you are worth so much more than them?”
Braly, standing at a podium next to a digital clock meant to keep shareholder questions to less than two minutes, defended WellPoint’s compensation as in line with other companies, and vetted by the board, consultants and now the shareholders.
“We consider it important to have competitive [pay] arrangements for the CEO and the named executive officers,” she said, adding that Tuesday’s votes indicate that “our shareholders support it.”
In other votes, more than 75 percent of WellPoint shareholders approved the removal of various anti-takeover provisions in the company's articles of incorporation. The company will no longer require 75-percent shareholder approval to amend the the articles of incorporation and will no longer require a two-thirds majority to remove directors or approve an acquisition of the company.