What insurance CEO compensation looked like in 2023

UnitedHealth Group's Andrew Witty became the highest-paid CEO among the major health insurers last year, but his total compensation paled in comparison to Oscar Health CEO Mark Bertolini.

Witty's total 2023 compensation was $23.5 million, up 12.8% from a year earlier, driven by gains in stock and option awards.

Related: Insurers 'scrambling' after Medicare Advantage pay cut

It came during a year in which UnitedHealth Group's net earnings rose 13.8% to $32.4 billion as revenues increased 14.6% to $371.6 billion. Its UnitedHealthcare insurance unit saw growth in Medicare Advantage enrollment, to 7.7 million members, and its Optum health services division became the largest employer of physicians. 

Witty's $23.5 million came before UnitedHealth Group stumbled into the spotlight following a cyberattack on its Change Healthcare subsidiary in February, a breach that has affected its finances and reputation. The company in April reported a first-quarter net loss of $1.2 billion and said it expects costs related to the cyberattack will total as much as $1.6 billion this year.

Witty is scheduled to discuss the breach at two congressional hearings Wednesday.

The total compensation for CEOs of the major publicly traded payers — UnitedHealth Group, Centene, Cigna Group, CVS Health, Elevance Health, Humana and Molina Healthcare — averaged $20.6 million in 2023, up 5.7% from 2022, according to a Modern Healthcare review of company proxy statements filed with the Securities and Exchange Commission. Elevance Health CEO Gail Boudreaux received the highest salary at $1.6 million.

Executive compensation is largely tied to personal and company performance, in addition to perquisites like security and access to a company plane. The majority of executive pay comes from long-term incentives in the form of stock options, performance-based shares and restricted stock units, which align executives with shareholders. The value of long-term incentives rise and fall with share price.

“Shareholders really want to pay for performance,” said Jason Brooks, managing director of BDO Global Employer Services. “They want executives held accountable for it, and they don't want executives, particularly the CEO and CFO, to get anything extra if they misplan.”

Total compensation increased for the CEOs of UnitedHealth Group, CVS Health, Centene, Cigna Group and Elevance Health while it decreased for Humana, Alignment Healthcare, Molina Healthcare and Bright Health, now called NeueHealth.

Oscar Health's Bertolini replaced Mario Schlosser as CEO April 3, 2023. Clover Health President Andrew Toy succeeded Vivek Garipalli as CEO Jan. 1, 2023.

Bertolini received the highest compensation overall — $44.5 million. Nearly all, or $43.9 million, of it came from stock awards with a three-year vesting schedule and was linked to the former Aetna CEO's appointment.

There are high expectations for Bertolini to lead the company toward turning a profit this year. Last year, Oscar Health’s net loss shrank to $270.6 million, from $609.6 million a year earlier, as revenue improved 47.9% to $5.9 billion.

Alignment Healthcare CEO John Kao’s total compensation dropped the most, by 58% to nearly $14.3 million, after he recorded the highest total compensation the previous year.

Humana CEO Bruce Broussard, who is retiring later this year, saw his compensation decrease nearly 5.1%, to $16.3 million. Humana has faced the brunt of Medicare Advantage headwinds given its ongoing exit from the commercial market and heightened focus on providing coverage for older adults.

“The committee was disappointed with our lower than anticipated financial results for 2023, and the expectation that higher medical cost trends will continue to impact our business in 2024,” Humana said its proxy statement. 

Mike Mikan, CEO of NeueHealth, received the lowest compensation overall at nearly $9.9 million. The company exited the health insurance business Jan. 1 following the sale of its California Medicare Advantage business to Molina Healthcare.