WellCare takes good care of its own…
Executives get paid a lot, we all know that, and then they often get paid more on the way out the door. Fine. But every now and then, a filing comes around that makes us wonder: Where can we sign up?
So it was with the transition details for Charles G. Berg, unveiled in an 8-K filed by WellCare Health Plans (WCG) a little after 4 pm yesterday. Berg is changing hats at the tumultuous Medicare and Medicaid managed-care company, which we have footnoted several times over the months. He’s becoming non-executive chairman after serving as executive chairman since January 2008, a hair under three years.
To us, “non-executive chairman” sounds like a less demanding role than “executive chairman,” but to judge by the compensation that WellCare is throwing Berg’s way, it’s a pretty solid gig even so.
To begin with, Berg gets a $750,000 cash bonus just for making the move, an annual payment guaranteed by his August 2009 offer letter. The board also voted to create a $150,000 cash retainer for the non-executive chairman’s position. And, seeing as how “the Board has assigned to Mr. Berg additional responsibilities at WellCare beyond the responsibilities typically expected of a non-executive chairman,” the company “anticipates that Mr. Berg will require office and secretarial support during the performance of such responsibilities.” The company is giving him another $20,000 a month for, well, as long as he needs it. That’s another $240,000 if you’re keeping score at home.
At first, the 8-K reads as if that $240,000 is for office space and secretarial support — it’s jammed right up against the stuff about needing an office and secretarial support, after all, just like we have it above. But no, on closer inspection, it appears that the retainer is for incidentals like staples and sticky notes (“Stop by ATM to deposit big honking check”). We can come to this conclusion because the paragraph detailing both benefits says that the stipend will end “at such time as the Board determines that the additional responsibilities are no longer required.” But the very last sentence of the paragraph says this about the office and secretary:
“Mr. Berg will be provided with office and secretarial support until one year after the end of his additional responsibilities.”
So, the cash retainer ends when it’s no longer necessary; the office and secretarial support ends a year after they’re no longer necessary. Sweet. Not that Berg has been hurting for pin money: He’s made $19.8 million from his WellCare gig since 2008, when he was brought in on the heels of scandal.
Berg did lead the company out of the wilderness of its messy Medicare and Medicaid investigation, of course. Sort of. Also under his watch, a well-respected board member and audit-committee chair quit noisily (as we wrote up in a FootnotedPro report), complaining among other things that the company lacked strength in its internal audit function or much of a will to improve things even as it was under the watchful gaze of a federal monitor. (The company disputed Herzlinger’s assertions.)
In any case, Berg will now chair board meetings in a non-executive fashion, for less than he made but still a nice chunk of shareholders’ change. We’ll see if that helps pull the company’s shares out of the doldrums they’ve been in.