Another HMO ( CEO ) bites the dust.
" Overcharging as it tries to turn around ".
Certainly HRC will ask for part of that " overcharge ", GGG
TA
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November 1, 1999
Oxford Health's President Tenders
His Resignation Amid Turnaround
By RON WINSLOW
Staff Reporter of THE WALL STREET JOURNAL
Oxford Health Plans Inc. said William Sullivan resigned as president of the
managed-health-care company to pursue other interests.
The resignation, announced in a one-paragraph statement late Friday after
the close of stock-market trading, comes as the company's two-year
turnaround effort from a financial debacle appears to be taking hold. The
company is expected to report strong third-quarter results Tuesday, in line
with earlier statements it would return to profitability in this year's second
half.
The resignation also follows by a month a lawsuit filed by Travers O'keefe,
a New York insurance broker, that alleged Oxford substantially
overcharged some clients as it sought rate increases as part of its
turnaround program. Oxford said it plans to vigorously defend against the
suit.
There was no announcement of a successor, and the company indicated it
didn't plan to fill the post immediately. Oxford, which is moving its
headquarters to Trumbull, Conn., from Norwalk, said Kevin Hill, senior
vice president of sales, was promoted to executive vice president to
assume responsibility for sales and marketing operations, which were part
of Mr. Sullivan's duties.
"Bill made an enormous contribution through our turnaround, and we wish
him every success in his future endeavors," Norman C. Payson, chairman
and chief executive officer, said in a statement.
Mr. Sullivan, who was 35 years old when the company's proxy statement
for this year's annual meeting was published in April, joined Oxford in
1988, well before the company went public in the early 1990s to become
one of the decade's stock market success stories. Then, two years ago, it
was overtaken by computer problems, too much growth and management
lapses that led to its collapse.
Mr. Sullivan was named chief executive officer in August of 1997, just
before the company's troubles were disclosed. While most other
executives, including founder and then Chairman Stephen F. Wiggins
departed when new management came in to clean up the problems, Mr.
Sullivan remained to serve as Mr. Payson's top lieutenant.
"He's probably the last real player from the old team," said Henry Moyer,
of Moyer Group Inc., a New York insurance broker. He credits Mr.
Sullivan with building relations with insurance brokers that helped fuel the
company's early success.
According to the company's most recent proxy statement, Mr. Sullivan
was paid $600,000 in salary in 1998 as well as a $500,000 bonus. In
March, the company forgave both principal and interest on a $750,000
loan to Mr. Sullivan. The proxy says if Mr. Sullivan departs without
"cause" or for "good reason," he would receive a cash payment equal to
two times his target bonus for the year plus his base salary for the
12-month period before the date of termination.
The company didn't refer to any terms in the resignation announcement. |
