Molina extends CEO Joe Zubretsky’s contract by 2027

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Dive Temporary:

• Molina Healthcare has entered into a contract to maintain CEO Joe Zubretsky on the helm of the insurer by the top of 2027.
• Beneath the deal, Zubretsky acquired greater than 146,000 performance-based restricted inventory models that may vest if the corporate meets adjusted earnings per share targets in 2027, in accordance with a Tuesday securities filing. The shares could be price almost $51 million primarily based on Molina’s inventory value at market shut on Tuesday.
• His annual compensation is unchanged, Molina mentioned in a press launch. Zubretsky earned $21.5 million in complete compensation final 12 months, in accordance with a March proxy assertion. 

Dive Perception: 

Zubretsky took the reins at Molina in 2017. His appointment got here months after the payer abruptly eliminated former CEO Mario Molina and CFO John Molina, citing the corporate’s disappointing funds and the necessity to drive profitability. 

Since then, the insurer has considerably boosted its inventory efficiency. The corporate’s share value elevated more than 500% since early 2017. 

Molina has confronted some turbulence in Medicaid this 12 months, the safety-net insurance coverage program from which the corporate attracts most of its income.

Medicaid rolls swelled through the COVID-19 pandemic as states stored beneficiaries repeatedly enrolled in trade for elevated federal funding. 

However that pandemic-era coverage ended greater than a 12 months in the past, setting off the redeterminations course of — and states have since eliminated nearly 25 million Medicaid enrollees from this system, in accordance with Health coverage analysis agency KFF. 

Molina expects to lose 600,000 of its Medicaid members as soon as redeterminations are full, the insurer mentioned on a second-quarter earnings name final month. 

However the insurer nonetheless beat investor expectations on earnings and income within the second quarter, growing its topline almost 19% as IT scored new Medicaid contracts and grew its present companies. 

The corporate is taken with extra acquisitions too, Zubretsky mentioned on the earnings name. Final month, Molina entered into an settlement to purchase insurer ConnectiCare for $350 million, bringing the payer into Connecticut.

The corporate additionally closed a deal to purchase Brilliant Health’s Medicare Benefit plans in California early this 12 months.