Michigan Blue Cross CEO Daniel Loepp earned $15.6M in cash in 2021 – Detroit Free Press
The top executive at Blue Cross Blue Shield of Michigan saw a jump in his bonus last year as the state’s largest insurer relied on gains from its investments and subsidiaries to cover underwriting losses related to the COVID-19 pandemic.
The Blues disclosed Tuesday that total all-cash compensation for CEO Daniel Loepp, 64, was $15.6 million in 2021. Of that total, $12.4 million was Loepp’s bonus. Loepp’s total compensation was $4.1 million more than the year before, although below his record $19.2 million payday in 2018.
“Overall, the consistently strong performance of the company under Mr. Loepp‘s leadership is reflected in his total compensation,” Blue Cross representative Andy Hetzel said during the health insurer’s annual financial year-in-review call with reporters.
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“In 2020 and 2021, he led the (Blue Cross) enterprise through the earliest stages of the COVID pandemic,” Hetzel said, “ensuring that we were able to proactively support our members, customers and providers, while continuing to manage good financial performance, maintain stable health plan membership and solidify our good credit rating.”
For 2021, Blue Cross reported an operating loss of $374 million, which it largely attributed to underwriting losses at its main health insurance business, generally resulting from continued higher costs from the pandemic.
However, Blue Cross was able to offset those losses using gains in its investment portfolio and non-health insurance subsidiaries. It ultimately had a positive, bottom line net income of $360 million for the year, or 1% of its total $32.5 billion revenue.
Blue Cross says its operating margin has averaged less than ½% over the past 10 years.
“Positive performance by (Blue Cross’) non-health lines of business allows the company to moderate pricing in its health insurance lines of business, keeping health coverage more affordable,” the insurer said in a news release.
Blue Cross is a nonprofit mutual insurer that, in contrast to its earlier nonprofit status, requires it to pay taxes. The insurer reported paying $164 million in local, state and federal taxes last year.
The breakdown for Loepp’s 2021 compensation was a $1.6 million salary, a $12.4 million bonus and $1.5 million in “other” compensation, such as the value of benefits like life insurance.
Blue Cross pay his bonus entirely in cash because unlike at a publicly traded company, the insurer doesn’t offer stock options.
Loepp, a native Detroiter, author and former state legislative staffer, started the CEO job in 2006.
Blue Cross plans to pay another $100 million in April to the Michigan Health Endowment Fund to help support wellness programs and insurance discounts.
ContactJC Reindl at313-222-6631 or jcreindl@freepress.com. Follow him on Twitter @jcreindl. Read more on business and sign up for our business newsletter.
