Phil Angelides, California state treasurer and a trustee of CalPERS and CalSTRS, testified today in opposition to the merger between WellPoint Health Networks Inc. and Anthem Inc. Mr. Angelides urged the California Department of Managed Health Care to reject the merger unless WellPoint's top executives relinquish what he called the "obscene" payouts they would receive if the merger goes through, according to a statement from Mr. Angelides. The merger requires the approval of regulators in 12 states, and California is the only one that hasn't endorsed it, according to a statement by the companies.
In his testimony, Mr. Angelides urged the department to "use its authority under the Knox-Keene Act to reject the deal. The act forbids health plans from expending 'excessive amounts' on administrative costs, including salaries and bonuses to plan officers." The pay package could total about $500 million, he testified.
The $165 billion California Public Employees' Retirement System and the $114 billion California State Teachers' Retirement System, both of Sacramento, voted their shares against the merger, which was approved by shareholders in a 97% vote June 28.
WellPoint is based in Thousand Oaks, Calif. Anthem is in Indianapolis.