May 15, 2011; Source: Times Free Press | As Nonprofit Newswire readers know, we have been following stories related to executive pay, board compensation and reserves at nonprofit insurers. Now comes this story from Tennessee that includes all that and then some. Blue Cross Blue Shield executive Vicky Gregg’s compensation turns out to be more than three times the salary listed in the organization’s 990.
Gregg’s compensation package in 2009 was $6.2 million – a fair sight higher than the $1.7 million listed on the 990. This article says that this is partially because of a deferred compensation package coming due, but it is also in part due to the fact that all of the trustees and top executives receive compensation not only from the nonprofit but from its for-profit subsidiaries.
A 1945 law restricts what the trustees can be paid from the state regulated Blue Cross plan to $10,000 but their annual individual compensation has been raised to as high as $100,000 annually with most of that flowing from the subsidiary businesses. In 2010 the 13 board members were paid $1.02 million.
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Meanwhile, premiums in Tennessee have increased over the last five years at four times the rate of inflation.
As readers know, the attorney general in Massachusetts has taken on the issue of board compensation in nonprofit insurers and other states are addressing what is seen as being the accumulation of excessive reserves even while premiums rise steeply. This would seem like a set of issues that need a more comprehensive response by attorneys general around the country.—Ruth McCambridge