The Indianapolis Star (Indiana)
Larry Glasscock is winding down his days in the the corner office at WellPoint by preparing to make some major stock trades.
Glasscock, who is retiring as chief executive June 1, says that over the next 10 months he plans to sell a quarter — or about 495,000 shares — of the almost 2 million shares and stock options he has accumulated over the last several years.
That works out to stock sales totaling more than $41 million based on WellPoint‘s closing price of $83.50 on Friday, although his personal gains will be significantly less when you factor in the cost of exercising options.
You can look at these planned sales a couple of ways:
One is through the eyes of an investor. Glasscock has helped transform Indianapolis-based WellPoint, formerly Anthem, from a regional player into the largest U.S. health-benefits company. Spokesman Jim Kappel said the number of WellPoint customers has increased five-fold, to about 34 million, since Glasscock joined in 1998.
What’s more, the company’s stock has roughly quadrupled in value since its 2001 debut.
“Not bad,” Ben Silverman, director of research for investment Web site InsiderScore.com, wrote in an e-mail. “He created wealth for himself and for long-term WellPoint shareholders.”
Indeed, last year Glasscock received $12.8 million in salary, stock and miscellaneous pay, according to WellPoint‘s proxy statement.
There’s another way to look at Glasscock’s upcoming trades:
The millions paid out to top executives at WellPoint and other health insurers have drawn sharp criticism at a time when the affordability of health care remains one of the nation’s most pressing issues.
“It’s feast for the executives and famine for the patients at WellPoint,” said Jamie Court, president of the Foundation for Taxpayer and Consumer Rights, a California-based advocacy group that has been a frequent critic of WellPoint.
Court said U.S. health premiums recently have risen 250 percent more quickly than the rate of medical inflation.
Kappel, however, said increases in health-insurance costs are caused mainly by advances in technology and increased use of the system. He also said that under Glasscock’s leadership WellPoint has been a leader in offering innovative programs for doctors and hospitals to improve care and control costs.
That debate is far from over. Glasscock didn’t address either performance or propriety questions in a news release announcing the planned stock sales.
In it, Glasscock said he was adopting the sales plan on the “advice of my financial advisers for financial diversification purposes.” He will be replaced as CEO by WellPoint General Counsel Angela Braly.
Glasscock, who will remain chairman, added that he still will own a significant number of WellPoint shares.
Silverman wrote that because WellPoint has a hefty daily trading volume of more than 3 million shares, it is unlikely that Glasscock’s upcoming sales would have any impact on the company’s stock price.