Despite Massive Carnage From Rout, There Are Signs That Investors Aren’t Panicked About Health Care
Option prices for the $18.1 billion Health Care Select Sector SPDR Fund have increased over the past few days, diverging from those on the SPDR S&P 500 ETF Trust. But they’re not yet pricing in “an extreme level of fear that would be consistent with a capitulation in sentiment,” experts say. Meanwhile, despite all the volatility in the field, nearly all large health insurance companies gave their CEOs pay raises in 2018.
Goldman Says Health-Care Options Show Little Fear Amid Rout
Given the health-care rout that’s wiped out $234 billion of market value in April, you’d be forgiven for thinking investors are panicking. Options prices show they aren’t, according to Goldman Sachs & Co. The S&P 500 Health Care Index fell as much as 0.4 percent on Monday, pushing its decline in April to 6.8 percent. It’s the only major industry group that has fallen this year as concerns deepen about disruptive policy proposals in Congress, including “Medicare-for-All” legislation that would replace private medical insurance with a government-run system. (Darie and Calderone, 4/22)
Health Insurer CEOs Score Big Paychecks Despite Public Scrutiny
Nearly all of the largest publicly traded health insurance companies gave their CEOs a pay raise in 2018. That includes UnitedHealth Group, whose CEO David Wichmann's total compensation reached $18.1 million. That's an increase of 4.3% over Wichmann's 2017 total compensation. Based on stock options exercised and stock awards that vested in 2018, Wichmann's realized compensation totaled $21.5 million. The company—which includes the nation's No. 1 health insurer, UnitedHealthcare, and the fast-growing health services subsidiary Optum—said in its annual proxy statement that Wichmann makes about 316 times the company's median employee salary. (Livingston, 4/22)