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Aetna CEO Huber resigns amid criticism, sagging stock performance
Aetna CEO Richard L. Huber, whose brash management style drew criticism from analysts and sparked lawsuits targeting his company, resigned from his post at a Feb. 25 board of directors meeting.
Huber, 63, will be replaced by William Donaldson, who has been a member of Aetna's board of directors since 1977. Donaldson is co-founder of the New York investment banking firm of Donaldson, Lufkin and Jenrette, and former chairman and CEO of the New York Stock Exchange.
Huber, who came to Aetna five years ago, had come under criticism for both his loose-cannon actions and the sagging performance of Aetna's stock. At least two fund managers who invested heavily in Aetna stock sent letters to the board of directors, seeking a change of management and direction, the Wall Street Journal reported Feb. 16.
Recently Huber drew bad press when he called the wife of a deceased Aetna patient who won a $120.5 million settlement against the company a "weeping widow." He later apologized for the remark, but John Schneider of Pimco Equity Advisors told the Journal, "He's a lightning rod. People hate him. His big mouth has cost the company millions of dollars in litigation."
Sharp criticisms of Huber also came at a time when the health care industry itself is under fire. Aetna disclosed recently that its medical costs have been higher than expected, and the company's stock has lost two-thirds of its value since August 1997.
Despite the criticisms, Huber left saying he was "proud of the work we have done. We have created the largest health care benefits company in America, doubled Aetna's revenues, and strategically positioned the company for the future." Huber made more than $1.7 billion in 1998 from his Aetna salary, bonuses, and other compensation.