Congress' Look at Executive Pay Includes Regence

Rep. Henry Waxman wants to know more about executive compensation paid to health insurers

September 17, 2009 -- Regence BlueCross BlueShield is among 52 health plans across the country targeted by Congressman Henry Waxman (D-California) who’s conducting an investigation into the private health insurance industry.

As chairman of the House Energy and Commerce Committee, Waxman’s asking the nation’s largest insurers to disclose their CEO salaries, bonuses, profit margins, corporate retreats and other financial data by the end of September.

A spokesman from Waxman’s office told that “we’ve been receiving information from the companies and are working with them to make sure the committee receives all requested information in a timely manner. We’re in the process of reviewing the information.”

Thus far, the committee has not disclosed any information on the compensation paid to health insurance executives. However, it expects to provide a complete report once all of the data has been collected.

Regence, the only insurer domiciled in Oregon under investigation, operates health plans in four states – Oregon, Washington, Idaho and Utah, and also has a holding company known as The Regence Group.

However, two of those states -- Idaho and Utah -- refused to share salary information following a request by The Lund Report, insisting such data was proprietary and confidential under state law.

Here’s what The Lund Report learned about the salaries of Regence executives in Oregon and Washington from their respective Insurance Divisions for calendar year 2008.

Regence’s president, Mark Ganz, earned $897,671 from Regence BlueShield in Washington, including a bonus of $550,548. In Oregon, his compensation package totaled $872,665. In both states, Ganz brought home $1,770,336.

The other high ranking Regence officials with six-figure salaries included Mohandas Nair, executive vice president and chief marketing executive, who earned $356,681 from Washington, and $295,140 from Oregon for a total of $651,821.

Regence’s treasurer, Steve Hooker, treasurer, who’s announced his retirement, earned $337,543 from Washington and $304,641 in Oregon for a total of $642,184

William Barr, executive vice president of operations, took home $430,926 from Washington, and $377,119 from Oregon for a total of $808,045.

And, Kerry Barnett, executive vice president of Regence’s corporate division, earned $312,482 from Washington and $302,990 in Oregon for a total of $615,472.

Other health plans being scrutinized by Waxman’s committee for their executive compensation include Health Net, Inc., United Health Group, Aflac, Inc., Aetna, Cigna Corp. and American International Group, Inc.

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It's unfortunate in these times of economic distress that witch hunts of this nature are undertaken. Private companies are subject to the forces of the marketplace. And as such, uncompetitive companies are naturally weeded out based on price and value of the service and products they supply. Executive pay is part of this equation in any industry. And while this newsletter professes to be objective, it clearly only states one side of the story. Why doesn't it also make it's readership aware of the charitable contributions these executives make as well? In my opinion, Congress is overstepping its bounds and setting dangerous precedents that may well apply to all of us in the future. In the extreme, salaries would be capped, talent would go elsewhere in this global economy and the US would suffer.

In response to gibsonflatpicker – I'm certain the The Lund Report would love to publish the other “part of this equation” regarding executive pay, which, as you indicate, has to do with the generous charitable contributions by the executives who work for Regence. Show us their tax return's, please! I, for one, would prefer that non-profit insurers such as Regence, don't overcharge us for by hiking their insurance premiums and keep executive pay at a level similar to other non-profit organizations in the community. That way, employers who pay the lions share of most premiums --along with consumers who are members of these health plans -- can realize the cost savings and in turn, make their own, more generous, charitable contributions to those organizations that are near and dear to their hearts and their family's needs. The idea that executives who make these fabulous incomes are somehow "in the clear" because they make fantastic contributions to their particular social and religious and political institutions… well, that just won’t fly very far given our current healthcare crisis. This reminds me of the movie stars who make millions and then are able to write real big checks (with the cameras and talk shows rollin') to their favorite causes -- but these kinds of contributions are not on our behalf. We don't get the tax breaks; we don't gain the influence and goodwill, and perhaps we don't support their charitable causes. Readers of The Lund Report, such as myself, look forward to learning more about the charitable contributions made by Regence's executives -- both the amounts and the recipients, and we're anxiously awaiting the results of the Waxman inquiry over the next few weeks. But suffice it to say that if Mark Ganz' partial salary from Regence and The Regence Group is over $1.7 million -- well that information is illuminating -- just how much does he make from all 4 states combined? This week my pharmacist told me that Regence is the anonymous sponsor behind the "What's the Real Cost?" campaign that you may have seen recently on cards in pharmacies and billboards all over the state. Yes Regence, we'd like to know, "What's the Real Cost?" of healthcare when these not-for-profit executives are earning this kind of money? The sooner that is answered in full, the better.

Well Stated loub40626! I 100% agree with everything that you've said. At the risk of being lambasted in this forum, I am an employee of Regence, thus my name, InTheMiddle. I believe that everyone should be held accountable for decisions that are made or were made when it comes to spending other people's money. I too, would like to see the "other side" of the story... especially when a lot of my friends were laid off due to "budgetary constraints", our annual performance raises were suspended 9 days before they were to be in effect, due to "budgetary constraints", my retirement benefits are being eradicated due to the fact that "we are not as competitive as we should be in the area of retirement and we are not keeping up with the clear trends among employers. To the point, we have been maintaining a primary focus on a very traditional paternalisitic pension plan and not focusing enough resources on the more modern and flexible 401(k) plan." While I get to keep what is in my retirement fund currently, it will not see any additional earnings. I should have enough to pay for a shopping cart when I retire in about 22 years. I am a salaried employee making less than $50,000 a year. (pay only.. but according to my benefits breakdown, I actually make more than $75,000 in pay AND benefits). While I can say that $50,000 a year is GOOD for a high school graduate... I'm thinking that $1.8 million (that's how much is REPORTED... from WA and OR) is a hell of a lot more money than any attorney in this city receives. (point being: if Mark Ganz were just a regular old attorney... he wouldn't be getting this much money). There are times when I work 12 hours a day. I work weekends. I am obligated to be "on call" . I am NOT reimbursed for any of this because I am a salaried employee. If I were to lose my job through downsizing, I would NOT be able to get another comparable job (as gibsonflatpicker points out) because I do not have a college degree and the competition in the field that I work is so fierce that I would be homeless before I know it. So... all of my hard work from last year (2008) was totally unappreciated and uncompensated. I have been on both sides of the coin though. I left Regence in pursuit of a dream that didn't work out and was rehired a bit later. In that time I was unemployed and uninsured. I then had a job where my employer paid for MY health insurance, but if I wanted family coverage it would have been over $600.00 a month. That's crazy! I couldn't afford $600.00 a month for insurance any more than I could fly to the moon from my own backyard. That's why I went back to Regence. I needed family coverage, and it was a LOT less expensive than working for someone else. I have been loyal to this company for over 20 years. I don't feel that I've been repaid for my loyalty.. and that loyalty means nothing any longer. On another note... If Obama wants to improve this nation's economy... why doesn't he STOP the outsourcing to other countries as the upper executives of this company seem to like to do. Stop the outsourcing... people get to keep their jobs, the economy improves.... blah blah blah. I have seen SO many IT people (who are friends of mine) lose their jobs here. Nothing makes sense anymore.

Its ironic that Mr. Ganz made the decision to suspend Regence employee pension plans within the same week that a disclosure comes out about his total (high level) compensation. Employees are informed that their benefits have to be "restructured" (a euphemism for downgraded) into order for Regence to be able to bid competively in the Northwest marketplace. One wonders if Mr. Ganz is modelling his concept of corporate health care on for profit companies. such as United Healthcare and Cigna). Their business philosophy has been to reduce rates for providers, minimize or reduce employee benefits and maximize executive compensation and stockholder profits. Of course,,, Regence is a not for profit insurance company.