EXCLUSIVE: Health care pay probe hits top Interior official

When members of Congress decided in November to start investigating the recipients of seven-figure pay packages in the health insurance industry, they may not have expected to find themselves probing a top Obama administration official.

Just months earlier, Interior Department Chief of Staff and Assistant Secretary Thomas L. Strickland had breezed through his Senate confirmation hearing without a mention of his $2 million bonus from one of the country’s biggest health care plans.

Altogether, the two-time Democratic U.S. Senate candidate in Colorado received more than $5 million in salary, bonus and stock compensation last year as the chief legal officer at UnitedHealth Group, a Minnesota-based health care plan, according to regulatory filings.

The package has come under much closer scrutiny since Sen. Tom Harkin, Iowa Democrat and chairman of the Health, Education, Labor and Pensions Committee, called on UnitedHealth and three other health care plans to provide details on executives who received more than $5 million in compensation.

The request, which did not mention Mr. Strickland by name, is part of an investigation into the industry’s rate-setting practices. A House committee is conducting a similar inquiry.

In response, UnitedHealth has turned over to Congress information about its executives’ pay, including details about Mr. Strickland’s compensation, company spokesman Don Nathan said.

Mr. Strickland was one of three top corporate officers who received more than $5 million from the company in 2008, according to the UnitedHealth’s proxy statement filed April 23 with the U.S. Securities and Exchange Commission (SEC).

He received a salary of $692,115, but his $2 million bonus, along with stock awards and other compensation, boosted his total pay for the year to $5,016,808, according to the SEC filing.

“Tom was named in the proxy so his information would have been included” in the response the company sent to Congress, Mr. Nathan said.

Mr. Strickland, through an Interior Department spokeswoman, said he hasn’t been contacted by any members of Congress who want to know more about his compensation or work for UnitedHealth.

“Interior has no regulatory or fiscal involvement with the managed care industry, including UnitedHealth. Tom has no involvement in the health care legislative debate,” Interior spokeswoman Kendra Barkoff said.

Mr. Strickland’s pay stands out among the company’s top executives. He was alone in getting a seven-figure bonus last year.

“The compensation committee awarded Mr. Strickland a bonus of $2 million because his departure date made him ineligible to receive any awards under the company’s executive incentive plan,” the company explained in its SEC filing.

David F. Larcker, director of the corporate governance research program at Stanford University, said that executives leaving companies generally forfeit claims to such unvested long-term compensation plans.

“In this case, it seems that the executive was paid in advance for what he would have received if he continued his employment. This seems unusual to me,” he said.

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