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Aetna CEO Ron Williams To Retire; Bertolini Named Replacement

By MATTHEW STURDEVANT

October 20, 2010

Ronald A. Williams, Aetna's chairman and chief executive officer, will retire after almost a decade with the Hartford-based health insurer, and will be replaced by longtime heir apparent Mark T. Bertolini, Aetna's president.

Williams, 60, will step down Nov. 29 as CEO, and remain as executive chairman until his retirement in April, when Bertolini will add the chairmanship to his duties.

After Williams became CEO in February 2006, Aetna's revenues increased 54 percent, to $34.7 billion, from 2005 to last year and its membership increased 28 percent in that same period to 18.9 million. Williams, among the few African American CEOs running a Fortune 500 company, was named corporate executive of the year for 2006 by Black Enterprise magazine.

Williams and Bertolini, 54, generally are viewed as having steered Aetna deftly from corporate restructuring into the post health care reform era. The succession was widely expected, although Aetna had not announced a timetable.

"Overall, we expect this to be an orderly management succession for Aetna," said Scott Fidel, an analyst with Deutsche Bank Securities.

Bertolini is an industry veteran who has been closely involved in managing Aetna's business operations and in helping to develop strategy, Fidel said.

"My style of management will be different from Ron's; every manager is different," Bertolini wrote in an e-mail to The Courant. "However, I have been very involved in the development of the culture that has made Aetna a successful organization. Our organizational structure is something that supports how we operate our businesses. Those businesses change to meet the demands of the market, and as necessary, we adjust our structure to adapt to those needs."

The change comes as Aetna and other health insurers face uncertain times with a massive industry overhaul that got underway this year and will continue for years to come as federal health care reform takes effect.

Aetna employees packed a company auditorium, which holds about 900, for an all-employee meeting Wednesday to announce the change. Williams and Bertolini each received a standing ovation from employees.

Williams, formerly an executive with Wellpoint, became Aetna's No. 2 executive under former CEO Jack Rowe in March 2001. Williams, the lower-key personality of the two, was the main architect of Aetna's restructuring efforts, during which the company reduced unprofitable business and set the stage for growth.

"After nearly 10 years at Aetna and with the company performing well, it is time to step aside," Williams said in a prepared statement. "The passage of major health care reform legislation has underscored the need for market-based solutions to address quality and affordability challenges in health care, and the next few years will present another opportunity for Aetna to lead."

Williams earned $7.6 million in compensation and stocks vested in 2009, a fraction of his $40 million take-home pay for 2007.

The company's employment overall grew under Williams' watch, although the number of Connecticut workers is down by more than 400. Aetna had 30,156 employees companywide at the end of the first quarter in 2006 when Williams became CEO and it now has 34,300 employees. The number of employees in Connecticut decreased during that time from 7,604 in March 2006 to 7,168 this month.

Asked about whether employment in Connecticut will change under his watch, Bertolini said by e-mail, "We've been part of the fabric of Hartford for 157 years. We have strongly supported the community. We anticipate that our traditionally strong relationship with the city and state will continue as long as the state maintains an attractive business climate."

Williams and Bertolini, committed to health reform, met personally with state and federal officials around the nation. Bertolini, who joined Aetna in 2003, brings personal experience to the health care debate. He nearly died in a skiing accident in 2004, and he donated a kidney to his son three years later — the year he became the Aetna president.

"I am proud to be given the opportunity to lead Aetna, a company with extraordinary strengths in brand, values and people," Bertolini said in a prepared statement. "I have had the great fortune to work alongside Ron Williams, whom I greatly admire and who made Aetna a leader in customer-driven innovation and Health Information Technology."

Aetna's shares were up 43 cents, to $31.33, Wednesday at the close of the New York Stock Exchange, an increase of 1.39 percent on a day when the Dow Jones Industrial Average rose 1.18 percent.