N.J. Blues executive pay comes under attack
■ Lawmakers and the Medical Society of New Jersey are among those critical of the nearly $9 million in compensation for the state Blues plan's CEO.
Physicians and legislators are criticizing Horizon Blue Cross Blue Shield of New Jersey over its executive compensation.
In particular, they are critical of the $8.7 million paid to William Marino, CEO of the nonprofit plan, in 2009. In documents filed in May with the New Jersey Dept. of Banking and Insurance, the insurer said Marino earned $934,615 in base salary and $7.8 million in bonuses and additional pay. The total compensation was up 59% from 2008. Overall, compensation for Horizon's top nine executives increased 61% in 2009 to about $24 million.
The Medical Society of New Jersey called the pay "bloated" and "out of touch." State Senate President Steve Sweeney said he would push for legislative hearings to look into Horizon's executive compensation. Horizon insures about 72% of New Jersey residents.
Citing average premium increases of 20% to 30% in 2009 for small businesses, Sweeney said: "When people get hit with a premium hike, the last thing they should expect is for that money to end up in someone's paycheck. Something is horribly out of whack in Horizon's executive suite."
No hearings had been scheduled as of this article's deadline.
The totals were first reported May 17 in New Jersey's Asbury Park Press -- which became a target of Horizon's ire for how it presented compensation for Marino and other executives. (The newspaper also ran an opinion piece by MSNJ Executive Director Michael Kornett that blasted Horizon.)
In a news release, Horizon maintained that executive pay is in line with what other, similar companies would pay. The company said that executive pay is only "0.24% of our members' monthly premiums."
Horizon also said that, technically, Marino earned not $8.7 million in 2009, but $4.8 million -- a decline from 2008. However, Marino received a $3.9 million payment in 2009 that represented pay earned the previous year, but was deferred and "paid out in 2009 pursuant to changes in applicable tax laws." The company said that since 2005, Marino has declined three pay raises, two increases to his incentive plan and one bonus.
However, criticism of Horizon did not abate. U.S. Sen. Frank Lautenberg (D, N.J.) said he would consider legislation to impose oversight on Blues affiliates nationwide, though no bill had been filed as of this article's deadline.
Horizon lost $946,370 on $5.1 billion in revenue in 2009. The company cut 250 jobs during that period. It also recently acknowledged that late in 2009 it dropped its campaign to convert to a for-profit company.