Ed Hanway, CEO of Cigna, is stepping down from his position. During his tenure Cigna increased in value. While he’s only been CEO for six years, Ed’s been with Cigna (or its predecessor) pretty much since he graduated from Loyola College some 25 years ago. He’s earned a good salary and retirement. However, what he’s getting is a wee bit more than that.
Ed was getting just over a million dollars a year as CEO. He earned an average of $20 million per year in total compensation, some of which was ‘deferred salary and benefits’. That last is why at his retirement he’s getting over $73 million in lump sum.
In Ed’s second year as CEO, Cigna fired – sorry, layed off – some 5% of its employees because Cigna was having a poor year. $22 million would have kept a few of them on the payroll. Ed’s total compensation took a hit of about 10% that year, so he truly felt the pain.
This past year, Ed was one of the several insurance CEOs telling congress how rough the companies were having it and that the health care reform was focused on the wrong villains – it was all the fault of medical costs, not the insurance. Ed only made about $24 million that year.
When the auto companies went to congress to plea for bailouts, a lot of people pointed out that flying in on their own airplanes sorta ruined the perception of need. I think that Ed’s situation does something similar.
Ed got $73 million in deferred benefits, which form roughly 1/2 everything he’s received in the past six years. I do not know if he earned it, and it does not matter. The perception right now that he got it on the backs of people who lost insurance when they needed it most and on the backs of people fired just for more profits. It’d probably have been wiser to wait another year to leave – wait till the furor over health care died down a bit. As it is, expect to see his name up a few times when insurance companies and health care reform are being discussed.