WellPoint throws stock, title at Colby

After WellPoint Inc.’s board last week passed over Chief Financial Officer David C. Colby for the CEO’s job, it gave him a new title and agreed to award him 60,000 shares in restricted stock and stock options if he stays three more years.

In addition to continuing as CFO, Colby will be vice chairman, an executive position that is not on the company’s board of directors, according to a securities filing today by the Indianapolis-based health insurer.

Many analysts feared Colby would leave the company after the board chose its top attorney, Angela F. Braly, to be the company’s next CEO. She will succeed Larry C. Glasscock on June 1.

In a conference call with analysts shortly after the Feb. 26 announcement, Colby said, “I am not sure I am near disappointed at all… I think she has great skills to run the company and I am very happy to work alongside with her.”

Colby’s 20,000 shares of restricted stock are worth roughly $1.6 million at WellPoint’s current stock price. He could claim half of them in 2009 and the rest in 2010, so long as WellPoint’s earnings per share in 2007 exceed a certain level, which WellPoint did not disclose.

His 40,000 stock options would have value only if WellPoint’s share price increases over the next three years.

In 2007, Colby will receive a salary of $740,000, a restricted stock award of 12,500 shares, and 100,000 stock options. He also is eligible for a bonus of up to 90 percent of his salary, or as much as $666,000.

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