Calling it quits can pay well for CEOs at big nonprofit groups in Minnesota — particularly for those at health insurance companies.
John Naylor, chief executive of Minnetonka-based Medica, received about $5.5 million in 2023 compensation when he stepped away in September of that year, powered by $3.1 million he got from a separation agreement.
The big haul puts Naylor at the top of this year’s Minnesota Star Tribune list of highest-paid nonprofit CEOs, but he’s not without peers when it comes to significant exit pay.
Blue Cross and Blue Shield of Minnesota disclosed to the Minnesota Star Tribune this month that former CEO Craig Samitt received about $5.6 million in compensation during 2021, though he retired in April of that year. Samitt had run the Eagan-based health insurer for about three years.
Executive compensation consultants say limited reporting requirements and a lack of precision with such terms as “severance” and “separation agreement” can make it hard for the public to know exactly what’s going on with compensation in situations like these.
In general, “they are reporting the financial conditions as required, but the details, I think, they would see as proprietary,” said Alexander Yaffe, managing director with the consulting firm Pearl Meyer.
A Star Tribune review of federal tax filings and documents on file with the state Commerce Department shows several nonprofit CEOs in Minnesota since 2018 have received additional compensation upon stepping down as chief executive, or even after the conclusion of their tenure, with only little explanation in regulatory filings.
In general, such payments are driven by contractual obligations, Yaffe said, and should not be considered compensation for doing no work.