bcbs layoffs and executive pay raises

BCBS has been in the news lately for laying off hundreds of employees, but what's even more striking is the fact that some top executives received significant pay raises in the same time period.

The company's CEO received a 20% increase in compensation, bringing their total pay to over $10 million.

This is especially concerning given the company's financial struggles and the fact that many employees are being let go due to "cost-cutting measures".

Consider reading: Bcbs Company

Blue Cross Blue Shield of Michigan plans to make voluntary separation offers to its more than 10,500 employees to cut administrative costs. This move is a response to financial headwinds.

The company extended the offer to 8,650 nonunion employees and is working to make the same offer to another 2,060 workers represented by the UAW.

Horizon Blue Cross Blue Shield, a different company, laid off about 200 people in 2009, the same year executives saw large pay increases, including CEO William J. Marino's $8.7 million pay.

The layoffs at Horizon were prompted by a drop in commercial business, but executives still managed to give themselves $31 million in total employee bonuses.

Blue Shield of California, yet another Blue Cross company, is set to lay off dozens of employees by Dec. 11, affecting workers in multiple counties.

Blue Cross execs defended pay hikes after layoffs, citing a change in tax law that prompted one-time payments. They claimed the large pay increases were not salary hikes, but rather a result of condensing their long-term incentive plan from six to three years.

The CEO, William J. Marino, received $8.7 million in 2009, 59 percent more than the previous year. This was part of $31 million in total employee bonuses that year, with salaries totaling $14 million.

Horizon executives argued that they still had money left over for bonuses even without the layoffs, which were prompted by a drop in commercial business in 2008 and 2009.

Blue Cross Blue Shield of Michigan is making voluntary separation offers to its employees due to financial headwinds.

The company is working to cut administrative costs, which is a key reason for the layoffs.

The Detroit-based health insurer extended the offer to 8,650 nonunion employees.

Blue Cross Blue Shield of Michigan has over 10,500 employees, and they're trying to make the same offer to another 2,060 workers represented by the UAW.

The company is taking proactive steps to address its financial challenges, and this is one of the ways they're doing it.

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The pay hikes for Blue Cross executives ranged from 10% to 20% in 2022.

These increases were based on individual performance and market data.

The company's CEO, Andrew Smith, received a 15% pay hike, bringing his annual salary to $3.5 million.

He defended the decision, stating that the pay hikes were necessary to retain top talent and stay competitive.

The average executive pay at Blue Cross increased from $1.1 million in 2021 to $1.3 million in 2022, a 18% jump.

This increase was largely due to bonuses tied to the company's financial performance.

The pay hikes were approved by the Blue Cross board of directors, who argued that they were necessary to keep the company's executives competitive with industry standards.

No details were provided on how the board arrived at this conclusion.

Blue Cross also reported a 12% increase in net income in 2022, which was cited as a factor in the pay hikes.

The company's financial performance was described as "strong" by CEO Smith.

Horizon executives tried to clear up misconceptions about their pay rates, explaining that the high 2009 figures did not represent salary increases.

The company condensed its long-term incentive plan from six to three years, prompting a large one-time payment.

Each and every day, Horizon competes for business with large, for-profit, publicly-traded health insurance companies.

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This is a crucial point, as it highlights the competitive nature of the industry and the need for Horizon to offer competitive compensation to its executives.

The bulk of Horizon's revenues comes from private employers, not public tax dollars.

In fact, the company is paid $97 million to manage a portion of the state health benefits plan for about 690,000 state, municipal, and county employees, but Marino said Horizon does not make money on the venture.

This is a puzzling statement, as one would expect a company to make some profit from managing such a large plan.

Marino said Horizon would bid on the coverage plan because "We are New Jersey. We are the hometown health plan."

For another approach, see: Horizon Bcbs Plans

Blue Shield of California is set to lay off dozens of employees by December 11.

The layoffs will affect 61 employees in multiple counties, including Alameda, El Dorado, Los Angeles, Sacramento, and San Joaquin.

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This is not the first time Blue Shield of California has laid off employees this year, having already let go of 140 people in January.

Blue Shield of California is a nonprofit health plan driven by its mission to provide access to quality healthcare that's sustainably affordable for all.

The company is reducing its staff to reduce administrative costs, operate more efficiently, and ensure it has the right talent and skills in place.

Affected employees will be offered assistance through a program that allows them to stay on the job for up to 90 days while engaging in job search and skills training activities with a certified professional career coach.