Mass. Insurer To Rebate Cost Of CEO Severance
The state's largest insurer plans to rebate $4.2 million to its ratepayers to offset the cost of a controversial severance package to former chief executive Cleve Killingsworth.
Attorney General Martha Coakley disclosed the decision by Blue Cross Blue Shield of Massachusetts on Wednesday following an investigation by her office.
Coakley said the probe determined that Killingsworth was entitled to the hefty severance package under his contract with the insurer, but that such contracts were "costly both in dollars and public perceptions."
Killingsworth resigned in March 2010 after five years on the job. He left with a total compensation package of $11.3 million. That deal angered many Blue Cross members who are struggling to pay rising health care premiums.
"To put this issue behind the company and as a gesture of good faith to our customers and the community, the board has decided to credit customers the $4.2 million in severance that was paid to our former CEO," said spokesman Jay McQuaide, reading from a prepared statement.
The rebate breakdown is just under $2 per person.
Blue Cross Blue Shield, a not-for-profit company, moved separately earlier this year to suspend pay for its board members, a practice that had also been sharply criticized by the attorney general.
With reporting from WBUR's Martha Bebinger and The Associated Press
This program aired on July 6, 2011. The audio for this program is not available.