Directors, Execs See Green as WellCare Suffers
OKLAHOMA CITY -- Behind the scenes at scandalized WellCare (WCG), the company's former chairman exercises considerable control.
Neal Moszkowski served as WellCare's chairman until October 2006, when he shifted into a regular board seat and allowed then-CEO Todd Farha to take his place. With business booming, Moszkowski touted Farha's strengths and assured investors that they would "benefit greatly from Mr. Farha's continuing vision" as chairman and CEO.
Exactly one year later, government agents swarmed WellCare's Florida headquarters and brought the health insurer's glory days to an end. Moszkowski has gained fresh importance in the wake of that downfall.
He now heads both the special committee that is investigating the WellCare raid, and the compensation committee that decides how much the company's leaders should be paid. He chairs the company's corporate governance committee to boot.WellCare's special committee is charged with uncovering any misconduct that led to the government's investigation and taking any necessary corrective actions. Almost four months have passed since October's raid, however, and the committee has so far prepared only a preliminary report on the matter. It has yet to share even that with the public, sending out mixed messages in the meantime. Last month, based on the committee's findings, WellCare indicated that the company's problems could be confined to the small behavioral health unit of its Florida Medicaid division. For a national health insurer, focused on larger Medicare as well, such a narrow probe would seem like a nuisance at most. Yet WellCare has responded in a dramatic fashion that suggests greater problems. In one sweeping move, the company ousted its top three executives and hired new leaders to execute its comeback. WellCare declined to participate in this story, saying that it is granting no interviews and has no new information to share. WellCare investors continue to suffer in the meantime. The company's stock, while boosted by the management shakeup, still languishes around $52, less than half of the $128 it traded at before raid.
Enticing OffersWellCare's new leaders won't have to pinch their pennies, though. With Moszkowski calling the shots, WellCare will continue to reward its management team quite well. Take a look at the company's contract with recently installed Executive Chairman Charles Berg, for example. Berg already struck it rich in the health insurance arena by
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