(Story updated at 6:45 p.m. ET)
Healthcare conglomerate UnitedHealth Group is reconfiguring its executive office, most notably announcing on the eve of open enrollment that insurance division CEO Gail Boudreaux is departing for undisclosed reasons.
Boudreaux, 54, said she will leave the company effective Feb. 27. She has served as CEO of UnitedHealthcare—UnitedHealth's primary subsidiary, which sells medical coverage and is the largest payer in the country—since 2011 and has been with UnitedHealth since 2008. UnitedHealthcare brought in $89.4 billion of revenue in the first nine months of 2014.
UnitedHealth CFO David Wichmann, 52, will now oversee the operations of UnitedHealthcare and hold the title of president of UnitedHealth Group. Wichmann is already familiar with the position's responsibilities. He was UnitedHealthcare's CEO before Boudreaux arrived.
His return to lead UnitedHealthcare may signal that the company is setting him up to succeed Stephen Hemsley as CEO of the parent company, said Peter Costa, an analyst at Wells Fargo Securities. Hemsley has been UnitedHealth's president and CEO since 2006.
“We believe the increased role for Wichmann shows he has continued to deliver for (UnitedHealthcare) from a cost, systems and infrastructure viewpoint and perhaps setting him up as the likely successor to Hemsley,” Costa wrote in a research note. “We believe it remains to be seen if he can deliver strong health benefit plan growth and performance.”
Several industry analysts noted that UnitedHealthcare is about to enter 2015 as a much bigger player in the Affordable Care Act's health insurance marketplaces. The company is expected to participate in 19 new exchange markets next year.
“It's a little surprising in terms of timing and she leaving,” Morningstar analyst Vishnu Lekraj said in an interview. “She's arguably one of the most powerful executives in healthcare.”
Still, the shakeup was somewhat expected. “Boudreaux is well-respected, and we view her departure as a loss for the company, but there has already been significant change over the last year beneath her,” J.P. Morgan Securities analyst Justin Lake said in a note to clients. Lake referred to several recent executive changes: Jack Larsen, who moved from UnitedHealthcare's Medicare business to Optum; Steve Nelson, who moved from the company's Medicaid side to head Medicare operations; and Austin Pittman, who now leads UnitedHealthcare's Medicaid group after overseeing a commercial network segment.
Boudreaux is in line for a hefty severance package. She will take home at least $23.3 million, which includes cash payments and stock options, according to her most recent employment agreement. Boudreaux will also receive her 2014 salary and incentives.
The company did not explain why Boudreaux was leaving or what her future plans are. A UnitedHealth spokesman said the new office of the chief executive was more about “an evolution of the structure that allows us to better serve the emerging markets and our growth, as much as anything.”