HELENA – The top five executives at Blue Cross Blue Shield of Montana took home almost $2 million in compensation last year, according to a report filed with the state auditor’s office.
BCBS Chief Executive Officer Sherry Cladouhos received a $417,700 salary and a $185,200 bonus in 2008, increasing her overall compensation by 38 percent over 2007.
Frank Cote, senior director of government relations for Blue Cross, said the salaries and bonuses paid in 2008 are based on the nonprofit company’s performance for 2007, when it reported net high returns. He said the company won’t pay any bonuses this year.
Blue Cross employs about 550 people and is the largest private health insurer in the state.
Cote said the company reduced its administrative costs by around $5 million last year while claims paid out increased by $21 million.
New West Health Services, the second-largest private health insurer in the state, paid $420,000 in total compensation to CEO David Kibbe.
Chase Hibbard, a Blue Cross board member who chairs the compensation committee, said salaries for Cladouhos and other top executives are on the low end when compared with salaries at similar companies in the region.
“We feel we’ve come up with salaries that are quite defensible and reasonable for a company this size,” he said.
After Cladouhos, BCBS Executive Vice President Terry Cosgrove took home $451,000 in total compensation last year and Chief Operating Officer Sheila Shapiro received $303,000. Both retired early this year and their positions are not being filled.
The second-highest-paid executive at New West is Chief Financial Officer Richard Gorenflo, who earned $272,200 in 2008. New West paid its top five executives a total of about $1.2 million last year.
Tanya Ask, vice president of external and provider services for New West, said the company is in a national market when searching for top executives, so it has to pay top dollar to get who it wants.
New West employs about 100 people.