This Week
  • HBT Architects took a risk and parted with some clients on its new path.

  • East High School teacher and blogger Kelly LaLonde speaks out about education.

  • GM injection: The automaker has invested $150 million here since 2011.

  • Placing a loved one in an elder care facility is not an easy decision for caregivers.

  • Robert W. Hurlbut heads a 1,400-employee business started by his grandparents.

  • The new edition of Explore Greater Rochester is here.

Mass. Blues agree to return CEO severance amount to subscribers

Rochester Business Journal
July 13, 2011

Blue Cross Blue Shield of Massachusetts has agreed to return an amount equal to former Massachusetts Blues chairman and CEO Cleve Killingsworth’s $4.3 million severance pay to subscribers. 

Killingsworth, who resigned last year at the board’s request after the Blues posted a more than $100 million loss, does not personally have to return any money, however.  

A onetime vice president of Excellus Blue Cross Blue Shield’s predecessor, Blue Cross Blue Shield of Rochester, Killingsworth moved to Blue Cross Blue Shield of Massachusetts as chief operating officer in 2004.

He had served as the Massachusetts Blues chairman and CEO for six years before leaving unexpectedly in March 2010 after the insurer posted a $149 million loss and saw an 89,000-subcriber drop in membership.

The Blues revealed in a March 2011 filing that Killingsworth would collect more than $11 million in post-retirement compensation, and the next day, Massachusetts Attorney General Martha Coakley kicked off a probe of his post-retirement payments.

“I understand why the public is outraged,” Coakley told a Boston Globe reporter at the time.

Killingsworth’s $11 million package includes previously earned salary as well as the $4.3 million severance package and several millions more in retirement pay he was contractually entitled to.

The retirement-pay rebate is outlined in a July 6 Massachusetts Attorney General’s office report detailing the results of the probe.

While the Blues new CEO and the insurer’s board agreed to the rebate “as a demonstration of good faith to the community,” the report states, “the fact that amount of the rebate or credit is equivalent to the severance should not be interpreted to suggest that either the AGO or the Board believe that no severance amount would have been appropriate.”

In response to concerns aired by the Massachusetts Attorney General’s office, the Massachusetts Blues board initiated a number reforms meant to tighten its CEO review process, the report states.  

Once they started to air concerns about Killingsworth’s performance, the Blues board “moved swiftly and efficiently to identify the performance issues and to initiate a change,” the report states. But Killingsworth’s employment contract put him in line for significant payments if he was fired unless his termination came as a result of intentional misconduct.

 (c) 2011 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail service@rbj.net.


What You're Saying 

There are no comments yet. Be the first to add yours!

Post Your Own Comment

 
Username:
Password:

Not registered? Sign up now!
 

To Do   Text Size
Post CommentPost A Comment eMail Size1
View CommentsView All Comments PrintPrint Size2
ReprintsReprints Size3
  • E-mailed
  • Commented
  • Viewed
RBJ   Google