Mass. Blue Cross to Refund Ex-CEO’s Severance Pay to Customers
July 7, 2011 | Read Time: 1 minute
Blue Cross Blue Shield of Massachusetts announced Wednesday that it will repay clients the $4.2-million it awarded its former chief executive in severance pay last year, writes The Boston Globe.
The state’s biggest nonprofit health insurer will deduct the money from its fourth-quarter earnings and provide credits to employer groups and some individual customers.
Cleve L. Killingsworth, the former chief executive, will not be asked to return the severance pay, which he received as part of an $11-million exit package after resigning in March 2010.
An investigation by state Attorney General Martha Coakley found that Mr. Killingsworth was paid properly under the terms of his contract with Blue Cross, but Ms. Coakley criticized the insurer for providing such generous severance terms in the first place.
The payout sparked widespread criticism of Blue Cross and other insurers’ spending on compensation and prompted an abortive effort by Ms. Coakley and some state legislators to implement legal restrictions on nonprofit groups’ payments to members of their boards.
