Insurer rebates $4.2M severance package to ratepayers
BOSTON (Legal Newsline) - Blue Cross Blue Shield is rebating to consumers the full amount of the $4.26 million severance package given to former CEO Cleve Killingsworth.
Massachusetts Attorney General Martha Coakley announced the move Wednesday in a report outlining the findings of her office's investigation, which found that Killingsworth was entitled to a significant payment under the terms of his contract.
Killingsworth resigned in March 2010 after BCBS posted a $149 million loss.
"Our investigation found that Mr. Killingsworth was contractually guaranteed to a significant payment upon his termination unless his removal was a result of intentional misconduct," Coakley said.
"The board has made the right decision to rebate this money because we did not believe customers should have to foot the bill for this severance amount."
BCBS is also re-examining its recruitment and succession plans. New CEO Andrew Dreyfus has taken "much more reasonable compensation and severance terms," Coakley's office said.
Coakley's investigation focused on evaluating the terms of Killingsworth's contract, the process used by the board to approve the terms and the circumstances of the termination.
From Legal Newsline: Reach John O'Brien by e-mail at email@example.com.