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Anthem top executive Swedish to become adviser, Boudreaux named CEO

11/06/2017 | 09:25am EDT
People enter the office building of health insurer Anthem in Los Angeles, California

(Reuters) - Anthem Inc's (>> Anthem Inc) Joseph Swedish will be replaced as chief executive by industry veteran Gail Boudreaux but will stay on as executive chairman until May 2018 and be a senior adviser through May 2020, the health insurer said on Monday.

(Reuters) - Anthem Inc's (>> Anthem Inc) Joseph Swedish will be replaced as chief executive by industry veteran Gail Boudreaux but will stay on as executive chairman until May 2018 and be a senior adviser through May 2020, the health insurer said on Monday.

The Wall Street Journal first reported the news on Friday.

Swedish will continue to receive his current salary as executive chairman and be eligible for a prorated bonus and as an adviser, he will be paid $4.5 million per year.

Swedish's move comes at a time of change for Anthem, the No. 2 U.S. health insurer. The company cut Obamacare individual market participation by 70 percent for next year and recently announced plans to bring its pharmacy benefit management in house. It also may face a much larger Aetna Inc (>> Aetna Inc), which is considering a deal with CVS Health Corp (>> CVS Health), according to sources.

Boudreaux was most recently CEO of United Healthcare, a unit of the biggest U.S. health insurer, UnitedHealth Group Inc (>> UnitedHealth Group). Before that, she was an executive at the next largest operator of Blue Cross Blue Shield licensed insurers, Health Care Services Corp, and at Aetna.

BMO Markets analyst Matthew Borsch said in a research note that Boudreaux is held in high regard by investors but that Anthem's stock is still a "market-perform" given the company's slower-growth business mix.

"We expect there may be a period of uncertainty among investors until the reasons for the reported leadership change are understood and fully accepted by the market," he wrote.

Boudreaux, who will take on the role of CEO on Nov. 20, will receive an annual salary of $1.4 million with a potential bonus of up to 350 percent of her salary, along with an initial stock grant worth $2 million. Long-term incentives are worth up to $10.25 million.

Swedish orchestrated Anthem's $54 billion deal for smaller rival Cigna Corp (>> CIGNA Corporation) in 2015, which was ultimately scrapped as regulators said that and Aetna's proposed acquisition of Humana Inc (>> Humana Inc) would be anti-competitive.

Two weeks ago, news broke that Aetna and CVS were in talks over a deal that would create a combined health insurance, pharmacy benefit management, and pharmacy company. The deal is expected in December, Reuters reported.

The impact of that deal is unclear on Anthem's recently announced plan to use CVS to help manage its pharmacy benefits business as it exits its contract with Express Scripts Holding (>> Express Scripts Holding Co).

(Reporting by Caroline Humer in New York and Ankur Banerjee in Bengaluru; Editing by Bernard Orr and Sai Sachin Ravikumar)

© Reuters 2017
Stocks mentioned in the article
ChangeLast1st jan.
ANTHEM, INC. 0.22% 425.105 Delayed Quote.22.63%
CHANGE INC. -1.81% 2228 End-of-day quote.-36.79%
CIGNA CORPORATION 0.33% 215.5 Delayed Quote.-0.74%
CVS HEALTH CORPORATION 0.18% 86.21 Delayed Quote.26.72%
HUMANA INC. 1.40% 461.28 Delayed Quote.7.61%
UNITEDHEALTH GROUP 1.05% 439.91 Delayed Quote.21.02%
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Analyst Recommendations on ANTHEM, INC.
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Financials (USD)
Sales 2021 138 B - -
Net income 2021 6 123 M - -
Net Debt 2021 17 908 M - -
P/E ratio 2021 17,1x
Yield 2021 1,01%
Capitalization 103 B 103 B -
EV / Sales 2021 0,88x
EV / Sales 2022 0,79x
Nbr of Employees 83 400
Free-Float 99,3%
Duration : Period :
Anthem, Inc. Technical Analysis Chart | ANTM | US0367521038 | MarketScreener
Technical analysis trends ANTHEM, INC.
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus BUY
Number of Analysts 25
Last Close Price 424,05 $
Average target price 452,35 $
Spread / Average Target 6,67%
EPS Revisions
Managers and Directors
Gail Koziara Boudreaux President, Chief Executive Officer & Director
John Edward Gallina Chief Financial Officer & Executive Vice President
Elizabeth E. Tallett Independent Chairman
Gloria M. McCarthy Chief Administrative Officer & Executive VP
Ramiro G. Peru Independent Director
Sector and Competitors
1st jan.Capi. (M$)
ANTHEM, INC.22.63%103 390
HUMANA INC.7.61%58 403