Health Insurance Ceos Earning Hefty Salaries

Health-insurance companies in Washington continued to pay their top executives generously last year, with total compensation averaging $400,000 at larger companies, Insurance Commissioner Deborah Senn reported yesterday.

Even though some executives took pay cuts, the companies overall "are still very generous with CEOs getting ready to retire," Senn said.

Dale Francis, chief executive of King County Medical Blue Shield, was paid $739,583 last year, an 18 percent jump from his 1995 pay of $627,282. Senn said Francis plans to retire this year, according to King County Medical Blue Shield's annual report to her agency. Last year, he received $455,230 in salary, a bonus of $170,210 and other compensation of $114,143.

Betty Woods, CEO of Blue Cross of Washington and Alaska, took a big pay cut last year, from $742,111 in 1995 to $481,914 in 1996. Much of that cut involved a lower bonus: $70,754 last year, down from $378,372 in 1995.

Senn's announcement suggested the lower bonus was tied to heavy criticism of Blue Cross the past few years "for using large bonuses to raise executives' compensation." Senn said the company "scaled that practice back in 1996" in Woods' case.

However, Jeff Roe, vice president of communication for Blue Cross, said the bonus paid to Woods in any year is based on her performance and the company's performance for the previous five years. "The bonus she received in 1995 was for performance in 1990 through 1994, over a five-year rolling period," he said. "It just happened that it was paid in 1995." He said her lower bonus in 1996 was based on similar calculations.

Senn also cited Whatcom Medical Bureau, which paid its top executive, Charles Beard, $751,154 last year, almost five times the $152,250 he earned the previous year. Beard retired last November.

Senn said Whatcom Medical Bureau recently raised rates 18.5 percent for individual subscribers. That will generate about $511,000 extra a year. "Beard's increase in compensation for 1996 exceeds the amount of that annual increase," Senn said.

Senn said Group Health Cooperative of Puget Sound paid its chairman, Phil Nudelman, $466,501 last year, up from $453,415 in 1995 and $433,707 in 1994.

Last year, a survey of proxy statements showed that 72 Northwest public companies with sales of $100 million or more paid their top executives an average of $617,627 in total compensation in 1995.