In reviewing Health Care Service Corp. (HCSC)’s executive compensation for 2020, Modern Healthcare threw out some pretty big numbers. Its CEOs (there were two, during different parts of 2020) reaped a combined total of $22.8 million last year. In addition, board chairman Milton Carroll’s pay shot up an impressive 81%, reaching $8.9 million.
These are substantially bigger figures than those of competitors, such as Humana and Cigna, which paid their nonexecutive chairmen $545,157 and $550,964, respectively. “I don’t see chairmen of the board for very large public companies making anywhere near that amount of money,” said Mark Reilly, managing director of the Overture Alliance, an executive compensation consultancy, regarding Carroll’s pay. Reilly noted that board chairmen typically work about five days a month and make roughly $500,000 a year.
To us, there’s something a bit mysterious (not to mention fairly gauche) about insurance execs taking home yacht-loads of cash during the healthcare crisis of 2020 while hospitals have struggled (and even gone bankrupt). We know that many hospital executives took pay cuts during the COVID-19 pandemic—and they don’t make anywhere as much as health insurance executives to begin with.
As we’ve observed in the past, there’s not necessarily a link between executive compensation and actual company performance. To us, that’s just plain perplexing. If there’s a lesson here, it appears to be that if you’re interested in a career in healthcare, the (seriously) big money is in being in charge of rationing it out—especially at HCSC—but not in actually providing it.
