Managed care companies accounted for some of the highest ratios of CEO compensation to median insurance company employee salary in 2020, according to an S&P Global Market Intelligence analysis.
Centene Corp. recorded the highest CEO pay ratio in this analysis, which examined the largest publicly traded U.S. insurers. Its top executive, Michael Neidorff, received total adjusted compensation of $25.0 million. That translates to 362x more than the median employee annual salary at Centene of $68,987.
UnitedHealth Group Inc. CEO David Wichmann, who has since been succeeded by Andrew Witty, was given total adjusted compensation of $17.9 million in 2020. That was about 321x more than the median UnitedHealth employee salary of $55,696. Cigna Corp.'s David Cordani received $19.7 million last year, approximately 304.2x more than the median employee salary.
Neidorff and Wichmann actually took pay cuts for 2020; the median salary at UnitedHealth grew 2.5% last year, while it was essentially the same at Centene compared to the prior year.
Aflac Inc.'s Daniel Amos received compensation of about $14.1 million in 2020, which was about 355x the median employee salary. The average Aflac employee salary rose 13.1% year over year in 2020.
Compensation Advisory Partners in a report said insurers tended not to make compensation adjustments for the effects of the COVID-19 pandemic. Though bonuses trended slightly down overall, pay levels still fared "reasonably well." Executive bonus payments in the insurance industry in 2020 were down compared to the prior two years, yet still paid out around target.
A majority of property and casualty and life and health insurance companies that Compensation Advisory Partners reviewed used ESG or strategic measures in their compensation programs. Additionally, two P&C companies recently implemented such measures in their long-term performance plans.
"Insurers have been adept at handling market uncertainty and volatility and have demonstrated responsible pay practices over time," the consulting company's report stated. "They tend to lead in good governance practices and social responsibility."
American International Group Inc.'s Brian Duperreault, who now serves as executive chairman, had a salary of $18.6 million in 2020. He made 265x the median pay at AIG of $70,926. That marked the highest CEO pay ratio among P&C insurers in this analysis.
