Coventry Health’s 50% Salary Bump and New Contract for CEO Allen Wise Could Be Hard for Investors to Swallow – cbl

Posted February 9, 2012

We Recommend...

Contribute to Citybizlist, Share Your News

By Bill Murphy

BETHESDA, Md. -- A new contract handed to CEO Allen Wise by Coventry Health Care Inc. (NYSE: CVH), raising his base salary by 50 percent to $900,000 and including generous stock awards that could be worth up to $15 million by next year-end, could be hard to swallow for investors unless the company's performance dramatically improves, according to Footnoted.

The specialist site, a part of Morningstar Inc., said Wise's new employment agreement last week promises a second $7.6 million award next January, following a similar one made last month. While the vesting criteria are similar (but tied to targets for 2013), Coventry once again promised to settle things at the end of that year and pay Wise in cash in mid-February, 2014, Footnoted said.

"Coventry's performance in the past year lagged behind both the S&P 500 and other companies in the health care plan industry. If the company's performance improves dramatically, we suspect that investors may find Wise's employment agreement more palatable than they currently do," the report said.

In January, Coventry gave Wise Restricted Stock Units and PSUs with a grant-date value of $7.6 million. Whether the RSUs will vest depends on Coventry meeting its earnings per share target in 2012; if it does so, they will vest, half at the end of 2012, and half at the end of 2013, Footnoted said. The PSUs, will vest subject to attainment of certain EPS and revenue growth targets. Both types of equity awards will be settled in cash, and Wise will get his money in early 2014, the report said.

Wise was first at the helm of Coventry Health from 1996 to 2004 when he retired but held the position of chairman. However, he was recalled in 2009 after a crisis led incumbent CEO Dale Wolf to quit. On his return, Wise received a signing bonus worth $5.5 million, 300,000 Performance Share Units (PSUs), and 1 million stock options - in addition to a salary of $600,000 per year, according to Footnoted.

Coventry Health, a diversified national managed healthcare company, based in Bethesda, Md., operates a full range of risk and fee-based managed care products and services to a individuals, companies, government-funded groups and agencies, and other insurance carriers and administrators.

Footnoted focuses on uncovering information hidden or not reported in SEC filings

Read the original article here: http://tinyurl.com/82wcvrs

Also, at citybizlist see:

Coventry Health Care Reports Fourth Quarter Earnings

SEC Filing: Coventry Health Care SVP John Stelben To Receive Base Salary of $450K

Coventry Healthcare Provides 2012 Guidance

Coventry Health Care Up 7% on Takeover Rumors

Coventry Health Care Inc.

To find out more about the company in this article and to see if you
have business connections, click below:

Coventry Health Care Inc.