Eight top executives at Louisville-based Humana cashed out 323,648 shares of company stock on Feb. 21, 2017, and pocketed a tidy $66.4 million.
Terry Lipshetz/Courier-Journal Media
Humana confirmed Monday that it’s offering voluntary early retirement packages to employees 55 and older in a bid to trim costs for next year.
Those who decide to retire will receive severance equal to two weeks per each year of service, up to a year of pay, “plus other elements.”
Word of the buyout offers began circulating last weekend after managers spoke with employees late last week about what was coming.
To be eligible, employees must be 55 years or older, have five years or more of service and have a combination of age and years of service that equals 65 or greater, according to a statement released to the Courier-Journal by Humana.
The move comes after the Louisville-based health insurance giant has been on a roll. In early August, the company reported that second-quarter net income surged to $650 million and that adjusted earnings per share for the quarter rose 20 cents, from $3.29 from $3.49 a year ago. Analysts had forecast about $3.08 per share.
The company also raised its guidance for 2017 on the strength of its individual Medicare Advantage business. Humana’s stock also has climbed significantly since February, when it and rival insurer Aetna agreed to end a $37 billion purchase deal. Aetna paid an estimated $947 million pre-tax breakup fee, which helped the bottom line.
At the same time, Humana announced this year that it will withdraw from providing coverage under the federal Affordable Care Act, or Obamacare, and in so doing will need to trim its workforce.
Even before Humana and Aetna decided to part ways, the company laid off 500 people from its At Home division and told all employees they’d need to apply for open jobs if they wanted to stay with the company. Dozens more from selected areas were let go in what executives described as a realignment to match with Humana’s strategy.
Those employees also were told that they had 60 days to apply for open positions, and if they didn’t make the cut for the alternative jobs, they’d be eligible for some severance and help to find a job elsewhere.
Humana said it would focus on people living with chronic conditions and employer group customers. Primary care clinics also are to be expanded, the company said.
Reporter Grace Schneider can be reached at 502-582-4082 or firstname.lastname@example.org.
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