A few news agencies report WLP hired a search firm and expect to take six months to replace the CEO. Leads me to suspect 3rd and 4th quarter earnings for 2012 will not be good and this timeline will provide cover for the new leader, providing an opportunity to reset expectations with investors by not being associated directly with the bad news. My impression of the past two years is CEO Braly had been too beholden to investors. Her decisions to outsource and cut administrative costs were short term solutions to hit Wall Street’s numbers, resulting in many deep cuts that have taken their toll on the company’s ability to operate effectively. On top of that, I have heard that the CFO pushed for higher pricing in certain business segments and now the accounts are moving their business to less costly carriers which are having a drastic impact on membership numbers. But, that may be one group looking to blame someone else for lost sales.
Hopefully they will find someone who can right this ship. Not sure where this stock will head in the near future (most likely down), but a possible long term investment if you are willing to let it play out. However, with the Exchanges around the corner and little time to react to government (state and federal) regulations, it will most likely be a bumpy 2013.
Maybe they should just put John Cannon in permanently. Everything I hear is that he is making good decsions and fixing a lot of the messes Braly made. Apparently is down to earth and well liked in and outside the company as well.
If the company wants to fix something they need to take a look at how work is done in professional ranks. The way work is managed is strange. Rewards go to those who don't produce, they are left alone, no one knows what they do.
It is more than the CEO that needs replacing -- the change in the Med Mgt area bringing in Herlen Lavene and his luetenants was bad, probably more of Braley's picks. The guy is another Dr who pontificates theory but can't manage the business. What about resource management at this company - where was Human Resouces during all these years of terrible talent managing?
The Indianapolis Business Journal reported that WellPoint is more likely than not looking externally to fill the CEO position and not until early 2013. The article suggested that investors are pushing for a new direction in leadership and that DeVedyt, having been very close with Braly, would signal staying the course. There are also some grumblings in the media that Braly was not a consensus builder on her leadership team. They made the suggestion that she was insecure to the point that she viewed her subordinates as threats to her position and did not respond well to alternative points of view resulting in very high turnover in the senior leadership. If this is true, it may explain the company’s difficulties in executing operations. They just fired the executive Angela brought in from Humana to run their Medicare business. I think he was there six months. The article stated there are only two executives that are still there that were on Angela’s original team. There are also some rumors that another round of cuts are coming due to loss of business to other carriers. Apparently they’ve had hiring and travel freezes already in place, so not sure where else they can reduce costs unless it is more outsourcing. If any of this is true, would provide strong support for the suggestion they will go external for the CEO position.