St. Petersburg Times
Special report
Video report
  • For their own good
    Fifty years ago, they were screwed-up kids sent to the Florida School for Boys to be straightened out. But now they are screwed-up men, scarred by the whippings they endured. Read the story and see a video and portrait gallery.
  • More video reports
Multimedia report
Print Email this storyEmail story Comment Email editor
Fill out this form to email this article to a friend
Your name Your email
Friend's name Friend's email
Your message
 

WellCare CEO is doing very well

Todd Farha, with a $90-million portfolio, nets $8-million is a stock sale.

By KRIS HUNDLEY
Published April 4, 2007


ADVERTISEMENT

Just call Todd Farha the $8-million man.

That's how much the president and chief executive of WellCare Health Plans Inc. has made just since January by selling shares in the Tampa managed care company.

And Farha's potential windfall is far from over. The Harvard MBA graduate, who assumed control at WellCare in July 2002 and took it public two years later, still holds about 1-million shares in the company. At Tuesday's closing price of $88.77 per share, Farha, 38, is sitting on a portfolio worth nearly $90-million.

WellCare's shares have risen more than 28 percent this year, the best among its peers.

WellCare spokesman, John Aberg, said his boss had no control over the timing of his first-quarter stock sales, which were part of a preset trading plan filed with the Securities and Exchange Commission in 2005. Under this arrangement, Farha has routinely sold off blocks of stock as "part of prudent financial diversification planning," Aberg said.

Farha's $8-million stock windfall in the first quarter pales in comparison to many other corporate honchos' payoffs.

Home Depot, for instance, gave chief executive Bob Nardelli a severance package worth $210-million when he departed in January. The difference is Farha, who gets about $1-million in salary and benefits as chief executive, isn't going anywhere.

WellCare's attraction for investors?

It has successfully tapped into the government's desire to turn Medicare and Medicaid plans over to private insurers, believing they can manage medical care more efficiently and cost-effectively than government bureaucracies.

WellCare, whose 2.3-million members are nearly equally divided between Medicare and Medicaid programs, posted $3.8-billion in revenue last year, the vast majority of that from state and federal government reimbursements. Profits were $139.2-million, nearly three times its net income after going public in 2004.

The boom in companies like WellCare has many wondering if the government isn't being a bit too generous in its reimbursements, particularly for the year-old Medicare Advantage drug plans.

While payments to insurers vary by county, they average about $800 per member per month in the Tampa Bay area. On Tuesday, Medicare said reimbursements to private insurers would rise 3.5 percent next year, a higher-than-expected increase.

The Congressional Budget Office has reported that current reimbursement levels for Medicare Advantage are already about 12 percent higher than traditional Medicare. Bringing them in line with Medicare costs could save the federal government $160-billion over 10 years, the budget office said.

Though Democrats are threatening to slash private insurers' reimbursement rates, Farha doubts that Congress will make serious cuts. Seniors, he said, are big fans of Medicare Advantage plans, which treat them to everything from free generic drugs to gym memberships.

Needless to say, Farha is a big fan as well.

Kris Hundley can be reached at hundley@sptimes.com or (727) 892-2996.

[Last modified April 3, 2007, 23:31:25]


Share your thoughts on this story

[an error occurred while processing this directive]
Subscribe to the Times
Click here for daily delivery
of the St. Petersburg Times.

Email Newsletters

ADVERTISEMENT