The WellPoint Inc. annual meeting May 18 in Indianapolis was contentious and dramatic. The first story out was about the collapse of Board member William "Bucky" Bush followed by CEO Angela Braly's sudden adjournment of the meeting while a line of concerned shareholders were still waiting to have their questions answered. That story went 'round the world, even picked up by the Singapore Straits Times, given legs by the irony of Mr. Bush getting assistance from the very doctor who had been regaling the Board minutes before. That physician, of course, was me.
This was the fourth annual meeting of WellPoint that I have attended in my role as "a cheery thorn in [their] side" "ER doc is affable WellPoint activist".
This year there were four shareholder resolutions on the meeting proxy, and the WellPoint Board recommended a NO vote on all of them. The first - and the boldest - one was ours (which many Huffington readers recall: "WellPoint/Anthem Shareholders Revolt!"), calling on the company to return to its Blue Cross, charitable, non-profit roots.
As I approached the microphone to present the resolution (SEC regulations require that I present it in person) I noticed a WellPoint security woman with an ear bud lurking nearby, obviously there to keep a close eye on me. How close became obvious as I read my prepared comments and she gradually moved in behind me until she was literally breathing down my neck. When I was 5 minutes into my 7 minute statement, she tried to stop me from finishing. It was an outrageous attempt at intimidation and harassment, but I informed her firmly and politely that I would complete my remarks, which I did.
The meeting tone remained tense as the remaining three resolutions were presented, although the others kept their comments brief, and the menacing security woman only glowered at them from a respectful distance.
Finally, the formal meeting was adjourned, and the traditional shareholder Q&A session began, which for the last four years has been Angela's least favorite part of the day. It immediately turned ugly as the security woman tried to cut off a lawyer from St Louis complaining how premiums on her small business health insurance policy had been jacked up 41%. After several appeals, WellPoint had finally admitted the increase was excessive, explaining they must have made "a fat finger mistake" in their initial calculations. The lawyer was not mollified and came to Indianapolis to press her case.
After just a few more contentious questions, the meeting came to its dramatic and premature end.
Ethan Rome informed Huffington readers about the one resolution that passed that day, "Shareholders Move to Curb Extravagant Pay for WellPoint CEO" but all he knew about our resolution when he wrote his piece (May 20) was that it had not passed. The resolution that did pass is referred to as "Say on Pay", and a similar proposal was voted down today (May 24) by another insurance behemoth, UnitedHealth. Although "Say on Pay" has been adopted by over 70 corporations, the fact that WellPoint investors passed it is significant.
But there may be an even more monumental story unfolding here. On Friday afternoon May 21, WellPoint released the official tally for the voting from the meeting on the 18th. The resolution for returning to non-profit status received over 30 million votes, 9.4% of the shares voted. That is a jaw dropping vote of no confidence in the management of this company.
The story isn't over yet. The SEC has proposed a new regulation that would allow shareholders to directly nominate corporate board members called "Proxy Access." If this goes into effect this fall as expected, I intend to run for the WellPoint board.
In its current draft form, the Proxy Access process for a large corporation like WellPoint would require 1% of the outstanding shares in order to nominate a director. With 430 million shares outstanding, I would need 4.3 million shares for the nomination. 30 million shares just voted for our resolution. You do the math.