Health Care Benefits and Pay Disparity

2010 – Aetna

 

 

WHEREAS:   shareholders, the government, citizens and investors are increasingly concerned about seemingly out of control growth in compensation packages for top executives at certain U.S. corporations.  Oftentimes these packages reveal a greatly increased pay gap between highest and lowest paid employees.

 

However "extravagant executive pay" may be, Business Week (9-1-08) indicates that it seems to be the norm.  It stated: "Chief executive officers at companies in the Standard & Poor's 500‑stock index earned more than $4,000 an hour each last year."  It noted that the approximate time that a S&P 500 CEO worked 3 hours in 2007 "to earn what a minimum‑wage worker earned for a full year."

      

Compounding this disparity, many employers have shifted a greater share of the overall health costs onto employees and their families.  This makes lower-wage employees bear the burden of increased premiums, higher deductibles and out‑of‑pocket expenses.  A McKinsey Global Institute study (4-09) showed that increased health benefit costs have negatively impacted lower wage employees more than higher income employees.

      

As shareholders concerned about all our employees, we note that executive severance packages, including continuing health care benefits, are benefits usually not available to other laid off employees.

      

As part of its overall compensation package, companies like Kraft have asked executives with the highest salaries to pay health care premiums up to four times that of the lowest paid workers for the same insurance.

      

Recently, in light of concerns about possible excessive profiteering in their industry, various health care companies have been asked to produce compensation information by House Energy and Commerce Chair Henry Waxman.

       

Consequently, as shareowners, we seek the following information to better understand our company’s total compensation benefits, including health benefits, for executives and average employees.

      

RESOLVED:   shareholders request the Board's Compensation Committee to initiate a review of our company's executive compensation policies and make available, upon request, a report of that review by October 1, 2010, omitting confidential information and processed at a reasonable cost. We request that the Committee consider including in the report:

 

       1.  a comparison of the total compensation package of our company’s top executives and our lowest paid employees, including health care benefits and costs, in the United States in July 2000, July 2004 and July 2009.

       2.  an analysis of any changes in the relative size of the gap between the two groups and an analysis and rationale justifying any such trend.

       3.  an evaluation of whether our top executive compensation packages, including, options, benefits, perks, loans, health care and retirement agreements, would be considered "excessive" and should be modified to be kept within reasonable boundaries.

       4.  an explanation of whether any such comparison of compensation packages, including  health care benefits, of our highest and lowest paid workers invites changes in executive compensation, including health care benefits for departing executives, to more reasonable and justifiable levels; and whether the Board should monitor the results of this comparison in the future—with greater equity as the goal.