Centene CEO Michael Neidorff (Michael Neidorff) will retire next year as the head of the largest Medicaid operator in the United States due to a change in leadership and a formal agreement with activist investors Political capital management, The company announced on Tuesday.
Neidorff served as the CEO of this $32.4 billion company for 25 years. His $25 million compensation package It has the highest proportion among health insurance company CEOs. Neidorff will continue to serve as executive chairman until the end of next year. According to the company, the 77-year-old proposed to the board of directors his plan to leave in the summer. Centene plans to appoint a new CEO before the end of 2022.
“I believe our company is ready to ensure a smooth transition,” Neidorff said in a press release. “With the value creation plan, the governance improvements announced today, and our strong leadership team, I am confident in the future success of this company.”
Centene is also reorganizing and expanding its board of directors before looking for leadership.
Politan Captial Management, which acquired a US$900 million stake in the company this year, demonstrated its strength and gained some power over the board of directors. Centene also announced on Tuesday that insurance companies and hedge funds have reached a formal cooperation agreement.
Quentin Koffey, managing partner of Politan Capital Management, said in a press release: “The scope of the changes that Centene has accepted demonstrates a real commitment to improving corporate governance and constructive participation.”
The company disclosed to the US Securities and Exchange Commission on Tuesday that, as part of the arrangement, Centene will appoint five new board members in early January and require board members to retire at the age of 75. Three board members will retire immediately, and the other six will leave over time.
Centene’s board of directors has also increased from 13 to 14. As of January 5, four new board members will be appointed: Ken Burdick, the former head of WellCare, a Medicare and Medicaid insurance company Centene acquired in 2019 for $17.3 billion; Tyco’s former chief financial officer Christopher Coughlin; Former Anthem Executive and Executive Board Chairman of Surgery Partners Wayne DeVeydt; Former President of Capital Guardian Trust Company Investment Management Company Theodore Samuels.
Centene and Politan Capital Management will jointly select the fifth new board member.
The current director James Dallas will immediately become the lead independent director and will serve as the independent chairman before the end of next year.
With the new five appointments, six people, including Neidorff, retire. Robert Ditmore, John Roberts, and Tommy Thompson will leave the board next year, Orlando Ayala and Richard Gephardt will not run for re-election at the company’s 2023 annual meeting or will retire forward Then.
Five executives will also join the company’s value creation plan steering committee, which is responsible for drawing the company’s growth chart. Centene plans to use automated call centers and suppliers to participate in operations and reassess its real estate footprint to increase its adjusted net profit margin by 3.3% by 2024.
The insurance company has also been selling like crazy recently.
Last week, Centene announced that it was looking for buyers for it. US$2 billion in international business. The previous month, the company sold a majority stake in US Medical Management, a home health service provider, to a group of private equity firms. Centene also $229 million paid Transition from the use of RxAdvance automated drug pricing tools in the third quarter.
The company is exiting the PBM field and has budgeted $1.25 billion to resolve allegations that its now-defunct Envolve PBM charged the state Medicaid department for excessive drug costs.To date, it has paid US$246.4 million to Arkansas, Illinois, Kansas, Mississippi and Ohio. And one Shareholders sue Centene, Asking for information about how much senior management knew about their former PBM’s Medicaid activities.