UPDATE: Churn continues in top ranks at WellPoint

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Talk about an exodus. The five highest-paid executives at WellPoint Inc. as recently as five months ago will all have left the Indianapolis-based health insurer a year from now.

Today, John Watts Jr. announced he would resign as CEO of commercial and consumer business effective Oct. 15 and leave the company by year’s end. Also today, two other executives, Joan Herman and Alice Rosenblatt, announced their intention to retire by mid-2008 and the second half of 2008, respectively.

If all three leave as planned, they will increase to 14 the number of top WellPoint executives who have departed since the company was created by the November 2004 merger of Indianapolis-based Anthem Inc. and California-based WellPoint Health Networks Inc.

Watts, Herman and Rosenblatt, WellPoint’s chief actuary, would follow former CEO Larry Glasscock and former Chief Financial Officer Dave Colby out the revolving door at corporate headquarters on Monument Circle.

Glasscock retired June 1, having announced Angela Braly as his successor in February. Colby was forced to resign May 30 for unspecified conduct violations. Since then, several women have claimed that they had romantic relationships with Colby and some simultaneously went by his last name.

Glasscock, Colby, Watts, Herman and Rosenblatt were WellPoint’s five highest-paid executives when it filed compensation information in its proxy in April.

Analysts express concern about a WellPoint brain drain back in February when Glasscock announced his retirement.

“Additional senior leadership departures may increase the execution risk in our opinion, particularly as the company diversifies its revenue stream within new market segments,” Credit Suisse analyst Gregory Nersessian wrote to investors at the time.

In conjunction with today’s executive announces, WellPoint also said it is restructuring its business units.

Herman, 54, will lead the consumer business unit until her retirement. She had been CEO of WellPoint’s specialty, senior and state sponsored business.

Ken Goulet, 48, will lead the commercial business unit. Goulet was president of WellPoint’s national accounts business.

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