Stock shares of WellPoint Inc., the Indianapolis-based parent company of Anthem Blue Cross Blue Shield of Wisconsin, were up 7 percent this morning, one day after the company announced its chief executive officer, Angela Braly, had resigned.
WellPoint’s general counsel, John Cannon, will serve as interim CEO until Braly’s replacement is found.
“Our board continues to believe that time will prove the wisdom of potentially transformative actions taken under Angela’s leadership,” Jackie Ward, WellPoint’s lead director, said in a prepared statement. “But now is the right time for a leadership change. We believe the remaining executive team is dynamic and strong, with great potential to drive WellPoint’s future success.”
Analysts have complained that Minnesota-based UnitedHealth Group Inc., WellPoint’s top rival, has outperformed the Indianapolis company since the 2010 passage of the Affordable Care Act that will transform the health insurance business.
“I have spoken with our board and we have agreed this is the right action for WellPoint at this time,” Braly said in a memo to company employees. “The board and I feel, though, that the company will benefit from getting a fresh perspective on ways we can improve execution across the company.”
Braly came under heavy criticism in recent weeks from large stockholders since the company cut its full-year forecast last month after earnings missed analysts’ estimates for the second time in three quarters.
Investor Royal Capital Management LLC, a New York-based hedge fund that owns 837,800 shares of WellPoint, called for the Braly’s ouster in a letter to the health insurer, saying she has “failed miserably.”
Royal Capital wrote, “It is incumbent upon the board of directors to fulfill its fiduciary responsibility to shareholders by changing leadership.”