Alignment, Molina, CVS CEOs top 2022 insurer compensation list

Compensation for the CEOs of large health insurance companies rose modestly and less than overall inflation last year, according to a Modern Healthcare analysis of data the companies submitted to regulators.

Excluding startups Alignment Healthcare, Bright Health Group, Clover Health and Oscar Health, publicly traded health insurance CEOs collectively saw total compensation increase by an average 1.1%, whereas inflation was 6.5%, figures derived from Securities and Exchange Commission filings show. CVS Health CEO Karen Lynch, Cigna Group CEO David Cordani and Humana CEO Bruce Broussard’s compensation all lagged inflation.

UnitedHealth Group CEO Andrew Witty’s compensation grew the most at 13.2%, to $20.8 million, primarily due to larger stock awards. Molina Healthcare CEO Joe Zubretsky trailed with a nearly 11% raise and the highest compensation among large insurers, at $22.1 million. Centene was the only large insurer to reduce CEO compensation in 2022 after Sarah London succeeded the late Michael Neidorff that March.

“The long-term performance of established health insurers has been pretty good. If you're a long-term shareholder in United, Elevance, Molina—it's hard to be upset,” said Ari Gottlieb, an independent healthcare analyst at A2 Strategy Group.

All of the insurtech CEOs experienced large declines in total compensation after they benefited from significant stock awards in 2021 following initial public offerings.

Despite a nearly 26% decline, Alignment Healthcare CEO John Kao had the highest total compensation among health insurance chief executives at $34 million. The company awarded Kao $1.6 million in restricted stock units in September "in recognition of the fact that Alignment had beat the past six quarters in a row—now past eight quarters in a row—and the need for shareholders to have a durable, long-term incentive in place for all senior management," a spokesperson wrote in an email.

Stocks comprised most of Kao's compensation package last year, which also included a one-time grant he received during the initial public offering and the beginning of his equity vesting, the spokesperson wrote. "Comparing his compensation to that of CEOs at legacy health plans is like comparing apples to oranges," the spokesperson wrote.

Bright Health Group CEO Mike Mikan reported the highest base salary among insurance startup CEOs at $1.3 million, a 25.8% increase from the prior year, and nearly double what the chiefs of Oscar Health and Alignment Healthcare earned. Mikan’s base pay is similar to London's, who received $1.35 million, and Broussard's, who was paid $1.34 million.

Mikan was also the only insurtech CEO to receive a cash bonus from the prior year—$1.69 million—as well as compensation for the use of a private jet. Mikan received $121,507 for a leased aircraft last year. He won the bonus for his efforts to restructure the company and guide its exit from the insurance business, the company said in an SEC filing.

Bright Health, which is at risk of bankruptcy, did not immediately respond to an interview request.

Former Clover Health CEO Vivek Garipalli, who departed at the start of the year to become executive chairperson of the board of directors, opted to forego a salary in 2022.