Hawaii's BCBS affiliate responds to executive pay criticisms

Executives at Hawaii Medical Service Association, the state's BCBS affiliate, are responding to internal criticism from employees following compensation boosts for the company's leaders and board of directors.

"To say we lowly employees are furious is an understatement," an anonymous HMSA employee told the Honolulu Star-Advertiser May 7.

An HMSA spokesperson told the Star-Advertiser that employee pay increase caps were lowered in 2020 from 5 percent to a range of 0 to 2.5 percent. In 2021, pay increases were capped at 1.5 percent with an average increase of 1 percent. The average raise in 2022 was 3 percent.

The Star-Advertiser reported that total compensation for the company's top five executives increased 48 percent from 2020 to 2022, mostly driven by large bonuses. Between 2020 and 2021, executive compensation increased 25 percent. HMSA President and CEO Mark Mugiishi Mugiishi's total compensation increased more than 18 percent to $3 million in 2022.

“Our competition is the United, Kaiser, and Centenes of the world who spend billions of dollars a year on IT and customer infrastructure, while paying their CEO’s ($20 million- plus) and other exec’s like CFO’s ($15 million-plus),” Mr. Mugiishi told the Star-Advertiser. "If we want to keep healthcare premium dollars in Hawaii for reinvestment in Hawaii’s communities and provider delivery system, we might never reach the nationals, but we sure have to try."

HMSA executives said compensation is determined by the company’s board of directors, along with external firms that compare executive pay at similar organizations. Mr. Mugiishi told Pacific Business News on May 26 that HMSA has launched an internal initiative to survey employee satisfaction with compensation and benefits

HMSA's board of directors also voted in 2021 to begin compensating board members, with its highest paid members receiving about $100,000 last year. The company's general counsel, Jennifer Walker, told PBN that compensating board members is a standard across all BCBS companies.

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