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Aetna CEO Set to Reap About $500M If CVS Deal Closes
- dmode 9y agoGive him some tax cuts to go with it
- mudil 9y agoRepublican tax cuts are targeting small businesses and the middle class. Nice try
- snewk 9y agodo you have a source on that?
- nathantotten 9y agoI know this is off topic from this thread, but I’m honestly curious as to why you think this. What evidence exists to support your statement? Normally, I would just assume this type of comment is simply trolling, but I looked at your profile and it seems you are a real person with generally intelligent comments so now I’m curious.
- mudil 9y agoI didn't read the budget, and likely you didn't read it too. We can't do all things at the same time, so we have experts to take care of things. (Say, you get a CT scan, you are not going to view it and interpret it, your radiologist will.) The same with the budget: I trust the president and the Republicans, as I take their word for it.
- maxxxxx 9y ago"I trust the president and the Republicans, as I take their word for it." That's a bad strategy for a citizen in a democracy. If you blindly believe a party or politician you can't make educated choices.
- mudil 9y agoNobody does blindly anything. We make choices, and that is my choice. I trust the Republicans in Congress, and I am happy with their legislative agenda. Let's respect each other choices, and not denigrate anyone for being politically blind. We all have brains, personalities, education, and we all deserve respect.
- maxxxxx 9y agoDid you do any reading about the budget? I haven't read the whole thing but it seems pretty obvious to me that main benefits will go to the highest incomes and corporations and only a small percentage to the middle class. Unless you define middle class as people with net worth in the millions.
- nkrisc 9y agoInteresting you make this point, because experts seem to disagree with your belief.
- maxxxxx 9y agoMiddle class meaning net worth between 20-800 million dollars?
- ryanwaggoner 9y agoI'm not an expert, but wouldn't this almost all be taxed at capital gains rates? And those aren't changing. Even if they are taxed as income, the top rate is (probably) changing from 39.6% to 38.5%, so he'd saving less than 1% on $499 million of this. So where is he getting a big tax cut?
- Someone1234 9y agoDo all the other workers get a proportionately large cut (relative to their incomes)?
- maxxxxx 9y agoThey should be more worried about layoffs.
- AngeloAnolin 9y agoIs there a non-pay-walled site to read the whole article?
- Maarius 9y agoCreate a shortcut with this as url (or simply paste it in your address bar): javascript:window.location.href='https://m.facebook.com/l.php?u='+encodeURIComponent(window.location.href);
- ethagknight 9y agoMarketwatch has some information https://www.marketwatch.com/story/aetna-ceo-bertolini-could-exit-after-cvs-deal-with-500-million-2017-12-05?siteid=rss&rss=1 https://www.marketwatch.com/story/aetna-ceo-bertolini-could-...
- neurotech1 9y agoI use archive.is for non-paywalled access: http://archive.is/MsLTJ http://archive.is/MsLTJ
- ryanwaggoner 9y agoWell, he led the company while its value went from $10 billion to $69 billion in 7 years. Doesn't seem ridiculous.
- chasing 9y agoYes it does. Aetna employees almost 50,000 people. Aetna owes some success to their CEO. They owe most of their success to their employees.
- dymk 9y agoRight, because those 50,000 employees were making the major directional decisions for the company, not the C level execs
- chasing 9y agoDirectional decisions aren't the only important decisions. And, yes: Non-C-level execs make directional decisions all the time. Especially in a company the size of Aetna.
- new-account-9 9y agoIf you get the big decisions correct, then your company can survive many incorrect small decisions. If you get the big decisions incorrect, then your company will not survive even if all the small decisions are correct.
- pc86 9y ago[citation needed]
- justicezyx 9y agoCan you quantify the ratio of payment vs. the ratio of contribution? And the amount of supply vs demand for 2 groups?
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- yequalsx 9y agoWhatever your politics that $500 million comes from profit in healthcare. Aetna has an economic incentive to denvy as much care as they can. That $500 million to one person is part of the overall cost of healthcare in the U.S. Is this really money well spent on healthcare?
- Spivak 9y agoJust like every insurance company? Part of that is from the value of his stock increasing but nonetheless even if it was all from the exit why not if they think they got value for their money?
- ceejayoz 9y ago> Just like every insurance company? Yes, which is why insurance for something that's non-optional - health - is so sucky, and sucky enough that the rest of the developed world has decided to largely cut out the middleman.
- rukittenme 9y agoThis is wrong. Most countries still have the "middleman". The NHS is the only European system (that I know of) that is completely government operated. Germany, France, Switzerland all leverage private and public health insurance plans. Furthermore, we can look at our own country (the US) and see how the different European systems play out. The VA (NHS-like) is a poorly run mess. Medicare (like Switzerland) runs decently.
- yequalsx 9y agoIn France the health insurance companies are non-profit. I'm guessing that insurance CEOs in other countries don't get $500 million bonuses so I'm thinking there must be some sort of regulation controlling profit levels and pay.
- sitkack 9y agoMore importantly, that 500M was money siphoned away from healing people. This is a share of the reward in not healing the sick.
- Kyragem 9y agoOligarchy at its best: Aetna/CVS workers mostly making minimum wage and doing all the work while the CEOs earning insane paychecks. Would this guy really be worse off if he only made 50M and the other 450M would go to the employees?
- TrainedMonkey 9y ago$450m would work out to $900 per employee (assuming 50k employees), not bad for a bonus. edit: As commenters below pointed out correct number is $9,000 per employee, which would have made for a pretty awesome Christmas bonus. If we also include CVS employees (240k) the bonus drops to $1,552 which is still pretty good.
- rak00n 9y agoCVS alone had over 240k employee in 2016. [1] [1] https://en.m.wikipedia.org/wiki/CVS_Pharmacy https://en.m.wikipedia.org/wiki/CVS_Pharmacy
- Retric 9y agoAetna has ~50,000 people so this is 450m/50k = 9,000$ each for them not exactly nothing. CVS has more workers but they are paid less so 1,900$ means ~1.5 months of pay to someone making 7.25$ an hour before taxes. I don't mean to suggest this is a significant issue on it's own, but high level executive compensation really does add up to a significant cost at large corporations. And really, this is just stock compensation he received other pay and benefits.
- dx034 9y agoThink you meant 9,000 per employee in this case.
- elvirs 9y agowould you accept $50 bonus and $1 to each of your 450 covorkers if you were set to receive $500 bonus instead?
- diegorbaquero 9y agoNo paywall: https://l.facebook.com/l.php?u=https%3A%2F%2Fwww.wsj.com%2Farticles%2Faetnas-outgoing-ceo-set-to-reap-about-500-million-if-cvs-deal-closes-1512480623 https://l.facebook.com/l.php?u=https%3A%2F%2Fwww.wsj.com%2Fa...
- aaavl2821 9y agoThese are just sort of nitpicky comments, but I think in this case they matter: * most of this is due to appreciation of stock appreciation rights (an instrument similar to a stock option) he already owns that is already vested ($230M) * $190M is from common stock he currently owns * he gets $60-85M as part of a change of control package, which is triggered if he is fired after CVS takes over. this is a standard clause in most contracts * overall, his package is worth so much because his equity became more valuable over the course of his tenure. any employees who got options at the same time as he did would benefit from most of this as well so these gains did not come from profits, rather appreciation in the equity of the company during his tenure. it would be hypocritical to praise startup founders from reaping capital gains while admonishing this ceo edit: formatting
- prklmn 9y ago> so these gains did not come from profits, rather appreciation in the equity of the company during his tenure. it would be hypocritical to praise startup founders from reaping capital gains while admonishing this ceo Why do you think the equity went up in value? It’s because of profit driven - valuations and profitability usually go hand in hand. The difference between Aetna and most startups is the business of Aetna adds no value to the economy/society, it’s a value suck.
- aaavl2821 9y agoi disagree. point by point: * from 2014-2016, aetna's revenue has increased by 9%, its net income by 10%, and its stock price by 82%. i didnt check all the way back to the beginning of the current ceo's tenure, but id imagine it is a similar trend. stock prices and profitability are not as well correlated as wed like to think * why do you say aetna adds no economic value to society? i understand if you have a high deductible plan with high premiums, it seems like health insurance is evil, but insurance companeis are required to pay out like 80% of the premium revenue they receive as medical benefits. so aetna pays something like $50B a year to pay for people's surgeries, child birth, medications, hospital stays, etc if you dont think health insurance is valuable youve never been really sick
- gxs 9y agoI know it's foolish to compare myself to the top 0.01%, but every year it seems like I fall further behind. Athletes used to make tens of millions of dollars. Nowadays some retire with over a billion dollars of lifetime earnings. CEOs used to make what? It was common to hear 20-25MM a year, today that number seems ridiculously low. I know staff on professional sports teams, low men on the totem pole, who make quarter million dollar bonuses. I realize these are one off examples that aren't common, but they make the gap seem so large.
- southphillyman 9y agoI use increasing athlete salary as an easy analogy to help ppl understand wealth disparity in this country. Micheal Jordan once made $4 million dollars in the prime of his career. Today Steph Curry can sign a $200 million deal in 2017 because that amount is nothing to his owner. Russell Westbrook signed a $200 million NBA extension to go with his $200 million sneaker endorsement this summer. Sounds crazy if you've been following sports. Their salaries aren't out of control though, it just seems that way because our wages are stagnant due to having none of the leverage athletes have via unions/skillset. Athlete salary has grown in proportion to the wealth they help generate, most of our salaries have not.
- stevenwoo 9y agoI don't begrudge athletes high salaries - they are in the entertainment industry and they are part of the product, like actors/directors. It's only in the last few decades that they got close to their actual value due to collective bargaining or that they got (in some sports) the ability to move from team to team of their own free will. Most athletes don't end up ridiculously wealthy and in contact sports will have short careers, additionally boxers and football players with longish careers will have a much lower quality of life after retirement from sport due to TBI/injuries. The only problem I have with pro sports is the collegiate scam in the US where colleges reap all the benefits and student athletes can't earn money.
- ethagknight 9y agoIt helps to understand the breakdown of how he got to this level of benefit. My guess: it doesn't sound like he just gets a $0.5B payout at close, but instead its the value of his Aetna holdings after close + his termination contract. To break it down, say he gets option for 300,000 shares at $30/share ($9mm) each year over the last 7 yrs, and the company stock price has gone from $30 to $207 per share, with steep ramp in price at the end of his reign, he is left with 2.1mm shares worth $177 more per share than he paid for them, netting him $370,000,000. His change in control contract is worth $85mm, bringing him to $450mm. Right or wrong, it makes more sense when broken down. Disclaimer: I know very little about whats normal in stock options and executive pay, but a $10mm/yr salary for a man serving as CEO and chairman of a $70B company doesn't seem as far fetched as the $500mm total comp makes it sound
- peg_leg 9y agoFor 10% of that he can buy enough of congress to make that happen
- downandout 9y agoPaywall bypass: https://m.facebook.com/flx/warn/?u=https%3A%2F%2Fwww.wsj.com%2Farticles%2Faetnas-outgoing-ceo-set-to-reap-about-500-million-if-cvs-deal-closes-1512480623 https://m.facebook.com/flx/warn/?u=https%3A%2F%2Fwww.wsj.com...
- zentiggr 9y agoYeah, from paywall to worse. NBD
- downandout 9y agoI’m genuinely confused by this response. All that URL does is have you click from Facebook, which makes FB the referrer, which WSJ has anointed a paywall free zone. What am I missing?
- ericd 9y agoI wonder if there's a reasonable way to normalize the value of stock incentive packages, such that they only become worth outsized amounts if you actually outperform the other companies in your sector. That way, they can't just ride a bull market to a massive payday, and similarly, a bear market doesn't automatically destroy their compensation.
- dmode 9y agoNot sure if people know, but corporate compensation is rigged in the US. It is mostly determined by a compensation committee appointed by the board, and consisting of members of the same oligarchy. By contrast, CEOs in other countries don't make such obscene numbers
- bkanber 9y ago> By contrast, CEOs in other countries don't make such obscene numbers By contrast, companies in other countries don't make such obscene numbers. Don't forget that our economy eclipses everyone else's. Our economy is on par with the entire EU's, and is still larger than China's which has several times our population.