June 14, 2010; Source: Asbury Park Press | New Jersey Governor Chris Christie is actively trying to cap the purportedly excessively high salaries paid to nonprofit social service CEOs. It seems like he hasn’t shown quite as much attention to the salaries of the nonprofit health insurers.
The CEO of Horizon Blue Cross Blue Shield received $8.7 million in compensation in 2009, 59 percent more than 2008. The nine highest paid executives in the company got $24.3 million, up 61 percent. Horizon’s position is that the compensation levels, humongous instead of just gigantic, were the result of a change in accounting practices, paying out long term benefits in one year rather than over three, and that even though Horizon is nonprofit, it isn’t entirely tax exempt, paying $172 million in federal and state tax in 2009.
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This is the argument they made at a N.J. Senate Health, Human Services and Senior Citizens Committee hearing. We guess that the Horizon people think New Jersey legislators don’t understand much about nonprofits, that a firm like Horizon BC/BS, equivalent in size to the 274th largest company on the Fortune 500 list, might actually pay taxes on activities that are income-generating, even though the parent company might be a nonprofit.
No one should forget that only a couple of years ago, these same guys at Horizon’s helm applied to convert to for-profit status. That might have exempted them from some of the questions they got from Senator Loretta Weinberg and her committee colleagues. Maybe they might also question Governor Christie about why nonprofit social service CEOs are overpaid in his mind, but $8.7 million for the CEO of Horizon BC/BS isn’t excessive. Doesn’t compute for us.—Rick Cohen