Blue Cross and Blue Shield gave raises to its top executives in 2009, even as profit fell at the state's largest insurer.
Robert J. Greczyn Jr., who retired as CEO on Feb. 1, received total compensation of $4.08 million, the nonprofit reported in its annual report to the N.C. Department of Insurance. That was about 2 percent more than a year earlier and easily makes Greczyn one of the Triangle's highest-paid corporate leaders.
James B. "Brad" Wilson, who took over the top job last month, earned $1.82 million in 2009, also about a 2 percent raise.
To some extent, the figures are old news. Wilson will likely receive a significant raise in his new role as CEO, a total that Blue Cross won't have to report to the insurance department until next year. And Greczyn probably received a retirement package from the company, but no details were disclosed in the regulatory filing made public Thursday.
Critics of Blue Cross say the insurer has too much market power and too much freedom to raise rates. Those critics point to top executives' salaries as excessive when an increasing number of consumers can't afford health coverage.
"Members certainly have a right to be worried about administrative expenses translating into higher premiums," said Adam Linker, a policy analyst with the N.C. Justice Center's Health Access Coalition. "All of us should be worried about how they throw their weight around to block health care reform and influence lawmakers."
Greczyn's pay is "certainly outsized," especially compared to the smaller compensation packages of many nonprofit hospital CEOs "who run larger, more complex organizations," Linker said.
Blue Cross says that its executive pay is fair and comparable to other insurers its size. The Chapel Hill company employs about 4,600 people and has 3.7 million members.
"Less than a third of a cent of the premium dollar goes to executive compensation, which means that executive pay has a nominal impact on premiums," said spokesman Lew Borman. "The company's leadership team has kept this business in a solid position during these difficult economic times."
Blue Cross' board hasn't set Wilson's compensation as CEO, Borman said. Wilson said during a January interview that he expected to be paid less than Greczyn, who ran Blue Cross for more than a decade.
Borman declined to comment on how much Greczyn received in retirement. "We disclose what's required by the DOI. We are not a public company," Borman added.
This week, Blue Cross reported that net income fell last year to $107.3 million, down about 42 percent from a year earlier. Its profit margin was 2.1 percent for 2009, down from 3.6 percent a year earlier.
Revenue was essentially flat at $5.2 billion.
The bulk of Blue Cross premiums is spent on medical care. That figure was 87 cents per premium dollar in 2009, up from 85 cents in 2008. The company blames rising costs for medical tests and other services, and higher demand due to seasonal flu and H1N1.
Of Blue Cross' top 10 executives, several took pay cuts for 2009, including Chief Medical Officer Don Bradley, Vice President John Friesen and Vice President Bradley Adcock.
Two executives who retired last year, Chief Financial Officer Daniel Glaser and Chief Information Officer John Sternbergh, also made less in 2009.
Borman said the pay is based on "measurable goals" such as membership growth, service to customers and financial stability.
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