BOSTON (CBS) – An $11 million golden parachute was given to the former CEO of Blue Cross Blue Shield of Massachusetts after he left his post.
Cleve Killingsworth negotiated that massive severance deal when he stepped down last March after Blue Cross reported nearly $150 million in losses.
A Blue Cross spokesman said Killingsworth’s compensation was part of a contract worked out in 2005.
Jay McQuaide, Senior Vice President of Blue Cross Blue Shield, says this kind of salary and severance is part of the past. McQuaide says, “We recognize this is a significant level of compensation. It was part of a contract that was agreed to in 2005, and the compensation for our new CEO is significantly less and reflective of where the communities interests and concerns are today with regard to executive compensation.”
WBZ-TV’s Karen Anderson reports.
Eric Michelson, the owner of Michelson’s Shoes in Lexington, is sick hearing about Killingsworth’s severance deal.
Michelson says, “The number is staggering. I can’t even comprehend it. We’re here trying to keep our employees… healthy by giving them health care, keep our customers happy, and I wish I could even comprehend the size of that profit.”
Michelson used to provide his employees with Blue Cross, but he says last year he had to change insurers because the premiums were skyrocketing. He asks, “Isn’t Blue Cross Blue Shield a nonprofit? Aren’t they supposed be working really hard to give us, the people looking for health insurance the best possible rates?”
McQuaide says Blue Cross is a non profit, but also a $13 billion dollar. “Like any business we compete for business, we compete for leadership for CEO and senior executives… and we feel strongly in the need to pay market competitive compensation in order to recruit and retain high performing leaders to run a company of our size and scope.”
WBZ-TV’s Karen Anderson contributed to this report.