Institutional Shareholder Services, Rockville, Md., reaffirmed its support for the multibillion-dollar merger between Anthem and WellPoint Health Networks, Dow Jones reported Friday.
ISS, a well-known proxy adviser, rejected an argument by the California Public Employees' Retirement System that the merger would lead to "egregiously unwarranted pay" totaling as much as $600 million for 293 WellPoint executives. Opponents include the California Public Employees' Retirement System and the California state treasurer, Phil Angelides.
According to a document made public earlier, WellPoint intends to pay the 293 executives cash bonuses and severance pay of $147 million to $356 million, depending on who stays and who leaves after the merger. The executives also hold $251 million in stock options, which would vest immediately if they were fired or compelled to quit within three years of the deal's closing.
ISS, in an analysis circulated Thursday, said the impact on shareholders has been overstated because not all 293 executives would receive the highest possible payments, only those forced to leave the company within the three years. Most executives are expected to remain with the merged company, ISS noted, and they already own the stock options.