15 April 2022
For years, WRAL News has reported on Blue Cross Blue Shield of North Carolina’s finances, rising premiums and executive bonuses. Despite the lingering impact of the pandemic, 2021 turned out to be very healthy year for the insurer’s bottom line.
“We had a good year, and I’m very proud of our year,” Chief Financial Officer Mitch Perry told WRAL News. He says the state’s largest insurer stands on solid ground for its increasing membership base and employees.
Perry says the worldwide, two-year year battle with COVID-19 is proof that insurance companies always need to be prepared, “I think the pandemic is an unfortunate example, but it’s also a very strong example of why it’s important for us to be financially stable,” he said.
According to an annual report filed with the state’s Department of Insurance, BCBSNC had $10.7 billion in annual revenue in 2021, including nearly $570 million in net revenue, often considered profit for a non-profit company. That’s a 118% jump from 2020 and a 16% increase from pre-pandemic 2019.
The vast majority of Blue Cross employees received bonuses, and records obtained by WRAL Investigates show the top eight executives made an extra $9 million between them.
Chief Executive Officer Dr. Tunde Sotunde got a $2.1 million bonus, pushing his annual compensation to over $4 million. Sotunde did not receive a bonus the previous year, because that’s when he took over.
Perry, Vice President Gerald Petkau and Chief Legal Officer Danielle Gray all took home $1 million in bonuses each. It’s important to note that the base salaries of all three actually went down from 2020 to 2021.
While those bonuses are certainly a lot of money, the pay pales in comparison to private insurance companies’ salaries and bonuses.
WRAL News asked Perry how BCBSNC can rationalize those bonuses when people are paying more for everything, including health care. “First of all, we understand that health care is too expensive,” Perry replied.
At the same time, Perry says, Blue Cross promises fair pay. “We’re focused on target compensation that’s independently set. It’s competitive with the market,” he said.
WRAL Investigates submitted public records requests to several state insurance departments to compare our CEO bonuses to those in other states. We’re still waiting on those requests. However, we did find the CEO of Blue Shield Blue Cross of Michigan, which has 4,000,000 members, recently received a $12.4 million bonus. That BCBS entity only has 300,000 more members than North Carolina’s. Blue Shield of California, which has 4.5 million members, paid its CEO a $2.45 million bonus.
Still the bonuses come as premiums climb for most consumers. Despite the perception, Perry argues customers rely on an insurer to keep qualified staff and that’s not cheap. “It has emboldened me about the important work we do and the importance of staying strong,” he said.