Blue Cross vows to be ‘transparent’ on exec money
By Christine McConville. Boston Herald, March 7, 2011
Blue Cross and Blue Shield of Massachusetts refused to say yesterday whether its directors will consider cutting their own compensation packages — under fire from state officials — but the health insurer’s spokesman said the high-paying nonprofit will cooperate with Attorney General Martha Coakley’s review of its executive and directors pay.
“The attorney general is reviewing both Cleve (Killingsworth)’s package and is also interested in issues of director compensation, and we will be working with her on these issues,” Blue Cross spokesman Jay McQuaide told the Herald. “We have been transparent on this issue from the beginning, and we will continue to be so.”
McQuaide has declined to release details of how the board of directors voted on a controversial $11 million payout to former CEO Cleve Killingsworth after he resigned after the insurer’s record $149 million 2009 losses. Yesterday, McQuaide refused to discuss whether board members will consider relinquishing or reducing their own $56,200-$89,886 annual compensation packages, criticized by state officials who say part-time charitable work shouldn’t pay that well.
Blue Cross board members receive a base of $40,000 for every year they serve. They are paid additional fees for attending meetings and leading subcommittees, McQuaide said. At least some of them also accept Blue Cross health insurance as a perk, at the company’s own employee rate.
“They don’t get it for nothing,” McQuaide said. “It is the same benefits package Blue Cross employees receive. The employees pay 20 percent and the company pays 80 percent.”
Repeated efforts to contact directors for comment have been unsuccessful. They include people who represent insurance customers in their other positions, including Greater Boston Chamber of Commerce president Paul Guzzi and Massachusetts AFL-CIO chief Robert Haynes.
Killingsworth, a Chicago native, came to Blue Cross and Blue Shield of Massachusetts in 2005, and soon became a prominent player in the region’s business and political circles. While earning up to $3.6 million a year leading Blue Cross into record losses, Killingsworth also served as a director on at least a dozen other nonprofit boards and for-profit boards. His compensation rates on those boards was not immediately available.
He joined the faculty at Harvard School of Public Health, and became a trustee of BabsonCollege and BostonUniversity and an overseer of the Museum of Fine Arts.
He served on the boards of the Boys and Girls Club of Boston; Blue Cross Blue Shield Association and Blue Cross Blue Shield of Massachusetts Foundation; Greater Boston Chamber of Commerce; Carroll School of Management at Boston College; and The United Way of Massachusetts Bay.
He also served as a director at Teachers Insurance and Annuity Association of America; the College Retirement Equities Fund; MITRE Corporation; and Travelers Inc.
Killingsworth, who is now living in the Finger Lakes section of New York, could not be reached for comment.