WellPoint CEO's management criticized
Despite public support for the chairman and CEO last month from the board, WellPoint's chief exec Angela Braly is coming under fire from shareholders and analysts for management of the second largest insurer.
Among the top complaints about Braly are failures to accurately forecast medical costs and set premiums. Last quarter, WellPoint missed analysts' estimates, said it could lose 900,000 members and reduced its 2012 forecast last month. What's more, since Braly became chairman of the board in 2010, the insurer has lost $9 billion in market value, and its stock has fallen 8.5 percent, reported the Indianapolis Business Journal.
Now, two investors are speaking publicly about Braly and her leadership failures. "There's a universal view that the CEO is the wrong CEO to lead the business," Leon Cooperman, founder of Omega Advisors and WellPoint shareholder, told Bloomberg. Kuhn Tsai, an analyst at Orbimed Advisors, also said "management missteps" have caused the company's poor performance.
But Braly may have bought herself some additional time after she led WellPoint's $4.9 billion acquisition of Amerigroup last month. "It would be unusual to remove a CEO in the middle of a major acquisition," Erik Gordon a University of Michigan business professor, told Bloomberg.
Ana Gupte, a Sanford C. Bernstein & Co. analyst, agreed. Although investors "are questioning her leadership," Gupte said, it would be "tricky" to change management amid a multi-billion dollar deal.
Some board members, though, have continued to defend Braly's leadership, according to the Indianapolis Star. "Angela, I think, has done a great job," said Lenox Baker, a retired cardiac surgeon and WellPoint board member. "Quite frankly, I think some of this stuff with the company is coming from Wall Street. I'm much more looking to the future."
WellPoint earnings fall 8%, but board supports CEO
WellPoint's $4.9B Amerigroup buyout to double Medicaid business
WellPoint won't disclose political contributions despite shareholder protests
WellPoint profits drop 8% as enrollment falls, expenses rise
WellPoint CEO's pay dipped to $13.3M
Senior care causes WellPoint profits to drop 39%
Editor's Note: Due to a reporting error, an earlier version of this article incorrectly categorized the CEO's critics.