WellPoint Inc. is looking for a new CEO after investor anger in August forced the company’s board to oust Angela Braly.
Braly’s five-year tenure leading the Indianapolis-based health insurance company was hurt by the recession but also by repeated missteps. Investors eventually determined that, for the mistakes to stop, Braly had to go.
WellPoint mispriced its business three times in the four years leading up to Braly’s departure. In addition, WellPoint missed its earnings forecast in two out of the last three quarters that Braly led the company.
WellPoint’s stock generated negative returns of nearly 28 percent during Braly’s tenure, the worst performance among the five largest health insurers in that period.
“We believe there is one—and only one—explanation for WellPoint’s underperformance: well-deserved investor antipathy toward Ms. Braly as a result of a regular cadence of managerial blunders that has plagued her term as CEO,” wrote two partners of Royal Capital Management LLC, a New York hedge fund that owns nearly 839,000 WellPoint shares, in an Aug. 22 letter calling for Braly’s ouster.
WellPoint’s interim CEO is John Cannon, who was general counsel under Braly. He has said he does not want the top job permanently.
The company’s board has been searching for a new leader. Among the candidates is Ron Williams, the former CEO of Aetna Inc. and a former executive in California-based WellPoint Health Networks Inc., a predecessor of WellPoint Inc.•