Anthem CFO to resign as insurer fights for Cigna merger approval

Health insurer Anthem is trying to win federal approval for its acquisition of Cigna Corp. and is embroiled in a legal dispute with its pharmacy partner over drug prices. Now, it will fight those battles with a new chief financial officer.

Anthem CFO Wayne DeVeydt will step down May 31 “due to family commitments and philanthropic work.” Anthem said in a financial filing that his resignation “is not due to any disagreement or dispute with the company.” John Gallina, who serves as CFO for Anthem's commercial and specialty division, will take DeVeydt's spot on June 1.

Gallina, 56, has been with Anthem since 1994, longer than both DeVeydt and CEO Joe Swedish. DeVeydt, 46, has been Anthem's CFO since 2007, and Swedish took over Anthem's corner office in 2013.

The timing of DeVeydt's resignation may “generate uncertainty among investors until fully understood,” Goldman Sachs analyst Matthew Borsch wrote in a research note Wednesday. Anthem's stock fell by almost 3% in morning trading, hovering around $137.40.

Swedish said in a news release that DeVeydt informed him of his intent to step down earlier this year “to spend more time with his family and to focus on charitable causes which have become increasingly important to him.” The company said the C-suite change has nothing to do with its pending Cigna deal or financial operations. Anthem and Express Scripts Holding Co. also are involved in a nasty legal feud over terms of their drug pricing agreement.

“Given the progress we have made with regard to the regulatory review of our Cigna acquisition and the work underway to identify the new leadership team for the combined company, Wayne felt that it would be best to step down from his role at this point,” Swedish said.

DeVeydt has helped build Anthem, a Blue Cross and Blue Shield licensee formerly known as WellPoint, into the $79 billion health insurance empire it is today. DeVeydt, along with ousted CEO Angela Braly, pushed Anthem prominently into Medicaid managed care in 2012 with the $4.9 billion purchase of Amerigroup. Last summer, Swedish and DeVeydt unveiled the $54 billion deal to absorb Cigna, the largest such proposed deal in health insurance history. Last May, DeVeydt actually hinted a big transaction was coming when he said Anthem has the capacity to make a “meaningful” acquisition.

Anthem has continued to express confidence the Cigna acquisition will close in the second half of this year, approximately a year after the two insurance giants announced the deal. The Justice Department and state insurance regulators have been reviewing the transaction, along with Aetna's proposed acquisition of Humana, for several months.

Anthem has won several state approvals, but hospitals, doctors, lawmakers, consumers and academics have railed against the merger, arguing it will stifle competition and lead to higher premiums.

DeVeydt's compensation in 2015 was almost $4.9 million, and he has earned approximately $17.8 million over the past three years. Anthem gave Gallina a base salary of $750,000 and $1 million in stock awards and options, and he will be eligible for Anthem's bonuses.