Aetna-Humana Merger: CEO Would Take Home $40 Million If Deal Is Approved, SEC Documents Show

The federal government is scrutinizing a proposed merger between Aetna and Humana, two of the largest health insurers in the country, and Humana CEO Bruce Broussard could make more than $40 million if the deal goes through, a document filed with the Securities and Exchange Commission shows.

Aetna announced in July that it would purchase Humana for $37 billion, but the sale must first be approved by the Department of Justice's antitrust team. Consumer advocates have argued the merger would hurt patients.

Broussard's $40.2 million potential compensation package includes $6 million in a severance payout. The rest of the money would come largely from cashing out stock. The total package would be noticeably larger than some other so-called golden parachutes paid to executives in other health insurance mergers but on par with packages paid in deals in the healthcare industry more broadly.

In 2013, after Aetna purchased Coventry, CEO Allen Wise was paid $14.6 million, Modern Healthcare reported, while the year before, when insurer Cigna bought HealthSpring, the latter's CEO Herbert Fritch made $29.7 million. And when drug company Pfizer bought Hospira in September, CEO Michael Ball took home $43.9 million.

In 2015, Broussard, the Humana CEO, took home $10.3 million in compensation, including a salary of $1.24 million, millions in stock options and perks like use of the corporate airplane valued at $57,000. A document filed with the SEC Wednesday described the proposed merger with Aetna as forming "a company with an enhanced ability that we could not achieve on a standalone basis" to improve healthcare value and health.

"We believe that the proposed transaction also provides significant value for our stockholders," the document noted, pointing to an implied value of $230.11 per share, as of the date of the proposed merger, July 2, 2015. The Department of Justice — and as many as 15 state attorneys general — are examining the proposed merger, which is expected to be completed in the second half of 2016.

Humana currently faces allegations that it, along with a Florida doctor, fraudulently billed the government's Medicare Advantage program. A federal judge unsealed the file in February, and although Humana has acknowledged that the Department of Justice had requested information about its risk-adjustment practices for Medicare Advantage, it said that the request was "in connection with a wider review" of such risk-adjustment plans across several companies, rather than just Humana, WDRB reported.