WellPoint (NYSE:WLP) appointed a new CEO Joseph R. Swedish, age 61, effective March 25, 2013. Mr. Swedish will serve as Chief Executive Officer of the Company and will be appointed to the Board, effective upon Mr. Swedish commencing employment with the Company.
The stock sold off because the street did not know this guy. Under the guise of hating uncertainty pundits were saying he is not well know on the street so lets sell the stock and destroy shareholder wealth. So much for deep analysis from the street.
The board signed off on a hospital administrator instead of a financial insurance guy. Lets take a look at some of the board’s behavioural biases. Officially WellPoint wanted someone who well understands the operating behaviours of the entities that rack up the huge bills they are so concerned over. Out of the box thinking and the board should get kudos’ for it.
Quick scan of the board and why the guy got the job.
Lenox D Baker MD 70 is a doctor and hospital executive. He would have understood the new CEO’s experiences and how transferable they are.
Sheila Burke 61 Lawyer, Academic and public policy background. On Boards of associations such as Cancer Society and Association of Medical Colleges. she too would be relating to an operating hospital guy.
George Schaeffer 66 is a member of medical school advisory board of University of Cincinnati and Board member of University of Cincinnati Healthcare System. Positive bonding with hospital administrators is more than probable.
Warren Jobe 71 sits on board of Georgia Council on Substance Abuse. Again generating contact with hospitals and administrators.
Susan Bayh 52 has a pharma background. Her DNA is to sell and influence hospitals on various drugs.
Julie Hall 65 is a real estate developer. She is on University of California Irvine School of Medicine Deans Advisory Board. so the hospital connection is come by honestly.
Ramino Peru 56 is from Phelps Dodge a mining concern. Jackie Ward 73 has a technology background and Robert Dixon Jr. 56 is from PepsiCo and Proctor & Gamble. Their biases would have been neutral.