WellPoint Inc.’s shareholders overwhelmingly rejected a proposal to require greater disclosure of the health insurer’s political giving during a wild annual meeting Wednesday at the Hilton Hotel in downtown Indianapolis.
The proposal, which sought twice-yearly reports on all WellPoint donations used for political campaigns or lobbying, was opposed by 84 percent of WellPoint shares voted at the meeting. Nearly 30 percent of all WellPoint shares were not voted either way on the measure.
But even before the voting was opened, a string of shareholders, most of them representing union groups, shouted questions and criticisms at WellPoint CEO Angela Braly and Corporate Secretary John Cannon.
One man was removed by security guards after repeatedly ignoring Braly’s flat-voiced call to “Keep quiet.” As security led the man out, many other shareholders shouted, “Let him speak!”
The main complaint of the day was that WellPoint has used its corporate funds secretly to finance public policy positions some shareholders don’t like, such as the 2011 rollback of collective bargaining rights for public employees in Indiana, Ohio and Wisconsin, as well as advertisements opposing the health care reform law as it was being debated in 2009.
Many questioners at the meeting hammered WellPoint for making a contribution in 2011 to the American Legislative Exchange Council, a conservative group that has been targeted with full-throated criticism this year by union groups and groups that dislike the council’s stance on “stand your ground” laws that became an issue in the shooting of Florida teenager Trayvon Martin.
“What’s troubling is that after the passage of the Affordable Care Act [in 2010], WellPoint contributed to fund ALEC,” shouted Renaye Manley during a lengthy speech she delivered as Cannon tried to read the voting results from the meeting.
“Ma’am, you are out of order,” Cannon said.
“No, you are out of order,” shot back Manley, a resident of Hobart in northwest Indiana who said she attended the meeting as the representative of institutional investors in WellPoint.
Manley eventually ran out of things to say and sat down.
Others, however, berated Braly about an $86.2 million donation made in August 2009 by a health insurance trade group to fund advertising, polling and grass-roots events opposing the health care reform bill then pending in Congress. WellPoint is a member of the Washington, D.C.-based trade group, America’s Health Insurance Plans.
Many shareholders at the meeting accused WellPoint of giving the entire amount of money. Braly said those were “not fair characterizations,” but she declined to say how much, if anything, WellPoint actually did give.
“Well, then there needs to be additional disclosure,” shouted Paul Filson, director of the Connecticut state council of the Service Employees International Union.
Filson asked whether WellPoint is funding a new round of ads by the U.S. Chamber of Commerce, which is critical of the Patient Protection & Affordable Care Act, also called ObamaCare.
Filson brought a copy of a letter sent Tuesday to Braly by Kevin Lembo, the comptroller of the state of Connecticut, who demands that WellPoint give him an accounting for the past five years of all its political contributions, spending on lobbying nationally and in every state, and its politically related communications spending.
“As the state’s chief fiscal guardian, I was deeply concerned by recent reports that a significant and growing portion of your company’s revenues are utilized to fund political expenditures which may be in direct conflict with the interests of the state and your policyholders,” Lembo wrote.
Connecticut is one of 14 states, including Indiana, in which WellPoint operates a Blue Cross and Blue Shield health insurance plan.
Braly reiterated that WellPoint complies with all federal and state disclosure laws about its political spending and issues an extensive annual report detailing those expenses. In 2011, the report says, WellPoint spent more than $604,000 on political campaigns, lobbying and other related expenses. The company has annual revenue of nearly $61 billion.
The shareholder proposal for increased disclosure about political giving, brought by California-based Harrington Investments Inc., was not supported by corporate governance watchdogs ISS or Glass Lewis.
After she read out the voting results on the shareholder proposal, Braly said, “Our shareholders have voiced their opinion.”
Outside the meeting, about 50 protestors held signs and balloons denouncing WellPoint. The protesters later moved to Monument Circle, where they marched around chanting slogans and later gave speeches on the steps of the Soldiers & Sailors Monument.
Some activist investors had promised to vote against the four WellPoint directors who were up for re-election this year, but all four received a majority of the shares voted, according to Cannon. He did not provide specific vote results.