CEO: Aetna’s Outlook ‘Solid’
By Diane Levick, The Hartford Courant, Conn.
May 31–Aetna chairman and chief executive Ronald A. Williams assured stockholders that the company’s future looks good despite its volatile stock price, and two shareholder proposals were defeated at the annual meeting in Chicago on Friday.
Williams said the company is “off to a good start” for 2008 but acknowledged that “like our competitors, Aetna’s stock price has been fluctuating. This represents a view of the sector’s future earnings potential.”
“Hopefully, that will change over time,” he added. “I want you to know that Aetna’s financial outlook remains solid and we have a winning strategy for the future.”
Aetna’s stock price this year hit a high of $59.19 a share on Jan. 10 and a low of $40.38 on April 22. It closed Friday at $47.16, up 65 cents a share.
Williams noted that since completing its financial turnaround in 2004, Aetna’s membership has grown back to its 2001 levels. As of March 31, health plan enrollment totaled about 17.5 million.
The company has also taken an active role in public policy issues and will continue to do so, Williams said.
“Aetna’s belief is that health insurers can promote health, improve quality and reduce costs, thereby creating the means to universal access to health care,” he said.
Meanwhile, shareholders rejected stockholder proposals that would have affected the makeup of the board and rules on voting for directors.
The Aetna Retirees Association had once again proposed that the board adopt a policy of annually nominating at least one person as a director who is a retired management employee of the company.
“We want to provide wisdom and perspective and expertise, not to advance special interests,” said Tolbert Chisholm, a member of the retirees association who spoke at the shareholder meeting.
The board, as in the past, opposed the proposal. Williams said the board believes its present process for picking nominees results in a broad range of expertise and perspective, able to represent the interests of retirees, among others.
About 6 percent of the shares that were voted on the proposal were cast in favor of it, and 94 percent of the shares were voted against it.
About 44 percent of the shares being voted were cast in favor of a perennial proposal by shareholder Evelyn Y. Davis for “cumulative voting” for directors, and 56 percent rejected it. Under the proposal, a stockholder’s number of votes would equal his or her number of shares, multiplied by the number of directors to be elected. The stockholder could cast all of his or her votes for a single candidate or stack votes for any two or more candidates.
Aetna’s board opposed the idea again, saying it may favor special interest groups, making it possible for such a group “to elect one or more directors beholden to the group’s narrow interests.”
Contact Diane Levick at dlevick@courant.com.
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