BrightHealth's CEO received an even bigger bonus last year after the company completed its exit from the health insurance business that once delivered incredible growth in the largest IPO in Minnesota history.
In the process, Bright Health, which announced in January that it was moving its headquarters from Bloomington to Florida and changing its name to Neue Health, cut its employment by nearly half. The number of employees at the end of 2023 was 1,252, down from 2,840 the previous year.
Chief Executive Officer Mike Mikan received a bonus of $1.95 million, up from $1.69 million a year ago, according to a regulatory filing Monday.
The majority of Mr. Mikan's total compensation of approximately $9.9 million was paid in the form of stock-based compensation. Bright Health executives have been underpaid for this type of compensation for years, given the company's stock's poor performance.
According to the agent, all of Mikan's previously issued stock options are underwater, meaning the exercise price is higher than the price at which the stock is currently trading.
“Participant incentive awards consider individual, team and company performance results…” NeueHealth said in a disclosure statement. “For 2023, the compensation committee has evaluated the company's overall execution against performance indicators and approved a performance factor of 100% of target.”
NeueHealth did not immediately respond to questions from the Star Tribune.
Bright Health was founded in 2015 as a health insurance company and has grown to cover more than 1 million people through individual market health insurance plans, typically sold through the “Obamacare” health care exchanges. At its peak, the company covered about 125,000 seniors with its Medicare Advantage plans.
Bright Health disclosed in September that it had not paid its full risk adjustment obligation to the federal government and had entered into a repayment plan with health insurance regulators. Health strategist Ari Gottlieb said the company remains in debt under an agreement with the federal government to reallocate funds to other health insurers.
”[The] “Boards continue to pay the price for their failures,” Gottlieb said.
In January, the company completed the sale of its last stake in Medicare Advantage health insurance, completely exiting insurance sales, which had been its mainstay business. The company is now focusing on its much smaller NeueHealth division, which owns and manages clinics in Florida and elsewhere.
Bright Health's employment peaked at just over 3,200 people at the end of 2021.
Neue Health disclosed updated headcount numbers Thursday in its annual report to shareholders. Over the past year, the company has provided limited comment on how the decline in its health insurance business is impacting employment.
Bright Health announced in February 2023 that it would cut 68 jobs at its former corporate office in Bloomington.
Bright Health Group raised $924 million in June 2021 in the largest initial public offering for a Minnesota company in history. They failed to accurately pay out claims and calculate risk adjustments, causing major setbacks in the health insurance market.
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