Aetna shareholders rejected a pension fund's call for changes to the insurer's executive compensation. The fund said it was unable to determine if Aetna's executive pay was excessive because the company's corporate filings didn't provide enough information. It asked that long-term equity be in the form of restricted shares, not stock options; that the restricted shares be awarded on the meeting of specific performance standards; and that Aetna discloses specific performance goals when executive pay is linked. The proposal was opposed by 94.4% of voting shareholders. Last year Aetna, Hartford, Conn., paid Chairman and Chief Executive Officer John Rowe $1 million in salary and a $2.2 million bonus, plus 350,000 stock options. Rowe also received $7 million for having met "specified performance criteria" under the company's long-term incentive plan. As of Dec. 31, 2003, he held $67.2 million in exercisable and nonexercisable stock options.
In earnings news, Cigna Corp., Philadelphia, reported a 67% drop in first-quarter net income to $78 million, or 55 cents per share, from $236 million, or $1.68 per share, in the year-ago quarter. The latest results include $199 million in charges for the sale of the company's retirement unit. Premium revenue dropped 7.4% to $3.62 billion, while enrollment slid 17% to 10.2 million members. But Cigna said the results reflect significant improvements in its healthcare business, where net income climbed 53% to $185 million. The company is working to right itself after a disastrous 2002, when it took more than $1 billion in charges partly to compensate for vastly underestimating medical costs. Separately, Amerigroup Corp., Virginia Beach, Va., reported a 35% jump in first-quarter net income to $18.4 million, or 72 cents per share, from $13.4 million, or 63 cents per share, in the year-ago quarter. Revenue rose 8% to $424.3 million as total enrollment increased 8.5% to 867,000. The company covers beneficiaries of Medicaid and other government programs in five states and the District of Columbia. -- by Laura B. Benko