Indianapolis-based Anthem Inc. confirmed Monday morning that Joseph Swedish, 66, is stepping down as CEO and that he will be succeeded on Nov. 20 by former UnitedHealth Group executive Gail Boudreaux.
In a filing with the Securities and Exchange Commission, Anthem said Swedish will serve as executive chairman until mid-2018, at which time he will become senior adviser to Boudreaux—a role for which he will be paid $4.5 million a year. He'll continue as Boudreaux's adviser until May 2020.
Boudreaux, 57, has been serving as a consultant since 2014, when she stepped down as CEO of UnitedHealthcare, the biggest unit of Minnesota-based UnitedHealth Group, the nation’s largest health insurer.
“Gail Boudreaux is a decisive leader with deep expertise in the health care industry and an outstanding track record of driving results throughout her impressive career,” George Schaefer Jr., the lead independent director on Anthem's board, said in a statement. “The Anthem Board is confident Gail will draw from her extensive experience to deliver strong operating performance, excellent financial results and a laser focus on customer experience and shareholder value. In an evolving industry, Gail brings the right skills for the times.”
Monday morning’s announcement confirms a Wall Street Journal story posted online Friday night. The CEO change follows a tumultuous year for Anthem, which is the nation’s second-largest health insurer with revenue of more than $84 billion and profit of $2.5 billion last year. In May, Anthem abandoned a proposed $48 billion merger with rival Cigna Corp. after a federal judge blocked the combination on antitrust grounds. The companies have sued each other, in part over whether Anthem owes a $1.85 billion breakup fee to Cigna.
Just last month, Anthem announced it will set up its own pharmacy benefits management unit, signaling a final break with Express Scripts Holding Co. after the health insurer accused Express of overcharging it by billions of dollars.
But the company’s stock price has been rising and closed at $211.80 on Friday—up nearly 17 percent since Anthem said it would give up on the Cigna deal.
Swedish—who had no insurance industry experience when he joined Anthem, having worked in hospital administration—replaced Angela Braly, who resigned under pressure from investors. Swedish told IBJ in 2013 that he believed his 40 years of experience running hospitals could help him “create a common language” between hospitals and health insurers.
In his statement, Schaefer praised Swedish for "his visionary leadership and steadfast commitment to expanding access to high quality, affordable health care during a dynamic time for our company and our industry. We are fortunate that, as a result of Joe’s leadership, we have a foundation of strong performance that allows us the opportunity to transition to a new Chief Executive Officer."
Under Swedish, Anthem's share price roughly tripled, operating revenue rose 39 percent and the company exceeded consensus earnings expectations every year, Schaefer said. He also said Swedish "has reinvigorated the company’s culture."