Aetna Inc. missed an earnings goal last year, so the health insurer chopped the performance-based bonus it awarded Chairman and CEO Mark T. Bertolini. But the executive's total compensation still rose 26 percent in 2012.
Bertolini, 56, received compensation valued at $13.2 million last year, according to an Associated Press analysis of the Hartford, Conn., company's annual proxy filing with the Securities and Exchange Commission. That's up from about $10.6 million in 2011.
In 2012, Bertolini received a $977,159 salary, which fell slightly compared to 2011, and a bonus of $892,800, which was down 55 percent. But the insurer also gave Bertolini stock awards totaling $11.1 million, a 52 percent hike compared to the previous year. It granted those awards Feb. 2, 2012.
Aetna, the nation's third-largest health insurer, also spent $201,093 on Bertolini's personal use of corporate aircraft and around $16,000 to upgrade the executive's home security system. The company said it did this "in light of concerns regarding the safety of Mr. Bertolini and his family as a result of the national health care debate."
Aetna competitor WellPoint Inc. also has cited these safety concerns in covering security upgrades for its former CEO, Angela Braly, over the past few years, as the health care overhaul has unfolded. The massive federal law aims to cover millions of uninsured people, and insurers have taken criticism while the law was being debated for, among other things, steep premium hikes that have hit some people in the individual insurance market.
Company spokeswoman Cynthia Michener said Bertolini and his family have not received any threats.
Bertolini replaced Ronald Williams as CEO in late 2010 and became chairman the following spring.
Last year, Bertolini guided the insurer through a major acquisition. Aetna announced in August that it planned to buy Medicare and Medicaid coverage provider Coventry Health Care for $5.7 billion.
The company also pleased shareholders by raising its quarterly dividend payout to 20 cents per share from 17.5 cents at the end of November.
Aetna said in its proxy, which was filed Friday after markets closed, that its performance was "solid" last year.
But the insurer's earnings fell 17 percent to $1.66 billion in 2012, while revenue climbed 6 percent to more than $35 billion.
Aetna reported operating earnings per share of $5.13. That, the company noted in the proxy, was down from 2011 and below the company's goal for the full pay-out of its bonus program.
Overall, Aetna shares climbed 10 percent last year to close 2012 at $46.31, while the Standard & Poor's 500 index rose 13.4 percent.
The Associated Press formula calculates an executive's total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest that the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive's stock and option awards for 2012 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company's stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.
Outside AP's compensation total, Bertolini also acquired nearly 700,000 shares that had vested with a value of $31.2 million. He also exercised options to acquire 112,000 shares and realized a value of $3.1 million.
Michener said those totals represented two years of grants, including some that were paid out last December instead of in February to preserve the tax deductibility of the awards for the company.