Gail Boudreaux
About Gail Boudreaux
Gail K. Boudreaux is President and CEO of Elevance Health (ELV) and a director since 2017; she is 64 and holds an MBA from Columbia Business School and a BA from Dartmouth College . Elevance uses a pay-for-performance model emphasizing Adjusted Net Income and Operating Revenue in annual incentives, with long-term PSUs focused on multi-year cumulative Adjusted Net Income and Operating Revenue; in 2024, Operating Revenue exceeded target ($173.35B vs $170.20B) while Adjusted Net Income missed threshold ($7.68B vs $8.64B) . Pay-versus-performance shows Company TSR of $130 on a $100 12/31/2019 base versus peer group TSR of $147 in 2024; Compensation Actually Paid to the CEO was negative in 2024 due to mark-to-market equity valuation, reinforcing equity sensitivity to stock performance .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Elevance Health, Inc. | President & CEO | Since 2017 | Led growth and portfolio expansion; pay design tied to Adjusted Net Income and Operating Revenue; 2024 Operating Revenue beat target . |
| GKB Global Health, LLC | Founder & CEO | 2015–2017 | Healthcare consulting leadership; industry/regulatory expertise . |
| UnitedHealth Group / UnitedHealthcare | EVP (UHG); President & CEO (UHC) | 2008–2015 (UHG); 2011–2014 (UHC CEO); 2008–2011 (UHC President) | P&L and regulated market execution at scale . |
| Health Care Service Corporation / BCBS IL | President, BCBS IL; EVP External Ops | 2002–2005 (President BCBS IL); 2005–2008 (EVP) | Commercial/operations leadership in Blues system . |
| Aetna Inc. | Various leadership positions | 1983–2002 | Early-career payer experience across roles . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Target Corporation | Director | Since 2021 | Retail consumer oversight; board governance . |
| Zimmer Biomet Holdings, Inc. | Director | 2012–2021 | Medical device; audit/technology operations committee experience . |
| Novavax, Inc. | Director | 2015–2017 | Biotechnology; oversight in regulated sector . |
| Xcel Energy, Inc. | Director | 2012–2017 | Utility; financial/technology governance . |
| Director/member roles | BCBSA; NIHCM; Central Indiana Corporate Partnership; Business Roundtable; Chair of the Business Council | Various | Industry, policy, and ESG leadership exposure . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $1,600,000 | $1,600,000 | $1,600,000 |
| Director pay (employee director) | Not eligible for non-employee director compensation | Not eligible | Not eligible |
Performance Compensation
| Metric | Weighting | Target | Actual | Payout/Outcome | Vesting/Notes |
|---|---|---|---|---|---|
| Annual Incentive Plan (AIP) – Adjusted Net Income | 50% | $8,644 million | $7,677 million (missed threshold) | Contributed to CEO AIP = 35.7% of target ($1,142,400) | Annual cash; AIP can be modified by peer-relative growth (modifier set to 92.5%) . |
| AIP – Operating Revenue | 20% | $170,200 million | $173,349 million (exceeded target) | As above | Annual cash; peer modifier applied . |
| AIP – Improving the Health of Humanity | 10% | Multi-metric targets (provider affinity, engagement, maternal outcomes) | Overall above target; 2/3 metrics exceeded, 1 declined | As above | Committee qualitative assessment informs payout . |
| AIP – Star Ratings | 10% | +33.5 pp improvement vs 2023 | Missed threshold (−2.0 pp) | As above | Annual cash. |
| AIP – Consumer Effort | 10% | +2.0 pp improvement vs 2023 | +1.9 pp (missed target) | As above | Annual cash. |
| PSUs (2024–2026 grant) | 60% Adjusted Net Income; 40% Operating Revenue | Target payout 100%; range 0–200% | In-flight (specific targets confidential) | Earned shares vest on 3rd anniversary of grant date | Dividend equivalents accrue but pay only on vest; 3-year performance period . |
| PSUs payout (2022–2024 cycle) | 60% ANI; 40% Op Rev | Targets disclosed ex post | ANI actual $22,620m; Op Rev actual $501b | Total payout 95.1% of target | Committee approved payout Feb 2025 . |
| Stock Options (2024 grant) | ~25% of LTIP mix | Exercise price $499.11/sh | Market-driven | Grant-date fair value $4,199,989 | 10-year term; vest 1/3 per year starting 1st anniversary . |
| RSUs (2024 grant) | Retention/time-based | N/A | N/A | Grant-date fair value $4,200,011 | Vest 1/3 per year starting 1st anniversary; dividends accrue and pay on vest . |
AIP payout detail for 2024:
| Name | Target AIP % | Target Award ($) | Final Award ($) | Final Payout % of Target |
|---|---|---|---|---|
| Gail Boudreaux | 200% | $3,200,000 | $1,142,400 | 35.7% |
2024 LTIP grant composition (grant date: March 1, 2024):
| Award Type | #/Value | Vesting/Terms |
|---|---|---|
| PSUs (target) | 16,830 units; $8,400,021 grant-date fair value | 3-year performance; vest at 3rd anniversary; 0–200% payout range . |
| RSUs | 8,415 units; $4,200,011 grant-date fair value | Time-based; 1/3 per year beginning 3/1/2025 . |
| Options | 32,480 options; $499.11 strike; $4,199,989 fair value | 10-year term; 1/3 per year beginning 3/1/2025 . |
Equity Ownership & Alignment
| Item | Amount/Status |
|---|---|
| Total beneficial ownership (as of Feb 1, 2025) | 389,716 shares (365,785 “Shares Owned” + 23,931 “Supplementally Owned”) . |
| “Shares Owned” notes | Includes 255,778 options currently exercisable or within 60 days . |
| Unvested but vesting within 60 days (Feb 1, 2025) | 8,344 RSUs; 15,587 PSUs . |
| Shares outstanding reference | 238,430,367 shares outstanding (as of Feb 1, 2025); none of directors/NEOs >1% . |
| Ownership guidelines (executives) | CEO must hold ≥6× base salary; 5-year compliance window; must hold 100% of after-tax profits until guideline met; all NEOs in compliance . |
| Hedging/pledging | Prohibited; no margin accounts; short sales and publicly traded options disallowed; trading windows restricted absent pre-approved 10b5-1 plan . |
| Director stock requirements | Non-employee directors must own ≥$625,000 within 5 years; annual $210,000 deferred shares grant; employee CEO receives no director pay . |
Employment Terms
| Provision | Key Terms |
|---|---|
| Non-compete / Non-solicit | Restrictive covenants for 24 months post-separation; repayment and cancellation of equity if breached . |
| Severance (no change-in-control) | Cash severance = 200% of base + target AIP; health and life coverage for 2 years; for CEO also 200% of DEC annual value; eligible AIP payout if terminated after Oct 1 . |
| Severance (double-trigger change-in-control) | Cash severance = 300% of base + target AIP (CEO); +5% for plan match; AIP = greater of target or actual; 300% of DEC value; 3-year health and life coverage; immediate vest on death/LTD and under CIC per award terms; PSUs paid at 100% target under CIC . |
| Clawback | Recoupment policy covers erroneously awarded incentive comp for certain restatements and misconduct, including reputational harm; restrictive covenant violations trigger repayment/cancellation . |
| Perquisites | Directed Executive Compensation (DEC): CEO max $54,000 annually; corporate aircraft personal use allowed up to 50 flight hours with $199,000 incremental cost cap; executive security program; comprehensive exams . |
| Tax gross-ups | No excise tax gross-ups on CIC severance; relocation assistance may include tax gross-ups; non-resident tax equalization as needed . |
| Equity grant timing | Annual grants on first business day of March; options weighted at ~25% of LTIP value; formal grant-date practice; off-cycle grants restricted . |
Potential payments (as of a hypothetical 12/31/2024 termination):
| Scenario | Total ($) | Components (selected) |
|---|---|---|
| CIC termination (CEO) | $43,180,757 | Cash severance $15,120,000; AIP $3,200,000; equity acceleration/continuation $24,651,743; benefits continuation . |
| Without cause/Good Reason (CEO) | $27,995,384 | Cash severance $9,600,000; AIP $1,142,400; equity $17,111,058; benefits continuation . |
| Death or LTD (CEO) | $25,794,143 | AIP $1,142,400; equity $24,651,743 . |
Board Governance
- Structure and independence: Elevance maintains a separate CEO and independent Board Chair; 10 of 11 directors are independent; committees (Audit; Compensation & Talent; Finance; Governance) are fully independent; independent directors hold executive sessions .
- Boudreaux’s board role: Director since 2017; not assigned to any board committee; employee director receives no director compensation .
- Director compensation framework: Non-employee directors receive $125,000 cash retainer, $210,000 in deferred stock, $30,000 committee chair retainers, and $260,000 non-executive Chair retainer; deferred shares vest on a minimum five-year deferral schedule with dividends paid in cash at distribution .
- Governance safeguards: Majority voting in uncontested elections; proxy access; clawback policy; prohibitions on short sales, hedging, pledging; double-trigger CIC provisions; no option repricing or excise tax gross-ups; pre-established executive equity grant dates .
Director Compensation (Boudreaux-specific)
- As an employee director, Boudreaux receives no board fees or director equity; all compensation is via NEO pay programs disclosed in the Summary Compensation Table .
Compensation Structure Analysis
- Mix and risk: CEO target pay ~78% long-term equity; shift toward RSUs and PSUs alongside stock options supports retention and long-term performance sensitivity; options remain 25% of LTIP value, preserving stock price upside linkage .
- Performance metric design: AIP balances profitability (Adjusted Net Income, 50%) and growth (Operating Revenue, 20%) with operational measures (30% total) and a peer-relative modifier (80–120%); 2025 AIP retains financial measures and replaces non-financial items with Strategic Initiatives, sharpening transformation focus .
- LTIP evolution: For 2025 grants, the Committee replaces cumulative Adjusted Net Income with cumulative Adjusted Diluted EPS to better align with shareholder priorities and external EPS growth commitments, a positive alignment change for investors focused on per-share economics .
- Say-on-Pay: 2024 approval ~92%, indicating broad shareholder support for program design and outcomes .
Risk Indicators & Red Flags
- Hedging/pledging: Prohibited for directors and NEOs; mitigates misalignment from risk-transfer strategies .
- Option repricing: Prohibited without shareholder approval; reduces pay inflation risk .
- CIC tax gross-ups: Not provided; shareholder-friendly .
- Related party transactions: Governance Committee policy requires review/approval; 2024 transactions were arm’s length/pre-approved; no material issues disclosed .
- Section 16 compliance: One late Form 4 for a former officer due to administrative error; not involving Boudreaux .
Equity Ownership & Compensation Tables
Summary Compensation (CEO)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $1,600,000 | $1,600,000 | $1,600,000 |
| Stock Awards ($) | $11,100,128 | $11,850,043 | $12,600,032 |
| Option Awards ($) | $3,699,929 | $3,950,036 | $4,199,989 |
| Non-Equity Incentive ($) | $3,840,000 | $3,648,000 | $1,142,400 |
| All Other Compensation ($) | $691,024 | $840,960 | $929,555 |
| Total ($) | $20,931,081 | $21,889,039 | $20,471,976 |
CEO 2024 Grants and Vesting
| Award | Grant Date | Units/Options | Exercise Price | Grant-Date FV ($) | Vesting Schedule |
|---|---|---|---|---|---|
| PSUs (2024–2026) | 03/01/2024 | 16,830 | N/A | $8,400,021 | Vest at 3rd anniversary; 0–200% payout range . |
| RSUs | 03/01/2024 | 8,415 | N/A | $4,200,011 | 1/3 per year beginning 03/01/2025 . |
| Stock Options | 03/01/2024 | 32,480 | $499.11 | $4,199,989 | 10-year term; 1/3 per year beginning 03/01/2025 . |
CEO Ownership Detail (as of Feb 1, 2025)
| Item | Amount |
|---|---|
| Shares Owned (incl. options exercisable ≤60 days) | 365,785; includes 255,778 options . |
| Supplementally Owned (incl. near-term vesting RSUs/PSUs) | 23,931; includes 8,344 RSUs and 15,587 PSUs vesting within 60 days . |
| Total Beneficial Ownership | 389,716 . |
| Shares Outstanding | 238,430,367 . |
| Ownership as % of Outstanding | ≈0.16% (derived from 389,716 and 238,430,367) . |
| Pledging/Hedging | Prohibited . |
| Ownership Guideline Compliance | CEO meets 6× salary guideline . |
Compensation Committee Analysis
- Compensation & Talent Committee members: Ramiro G. Peru (Chair), Susan D. DeVore, Robert L. Dixon, Jr., Bahija Jallal, Elizabeth E. Tallett; reviewed CD&A and recommended inclusion in proxy .
- Independent consultant usage: Governance Committee directly engaged CAP for director compensation; assessed consultant independence (no conflicts) .
- Risk assessment: Committee annually reviews compensation risk; concludes programs unlikely to create material adverse risk; strong ownership, clawbacks, capped payouts, and balanced metrics reduce excessive risk-taking .
Investment Implications
- Alignment: High equity mix (~78% of CEO target), rigorous clawbacks covering reputational harm, strict hedging/pledging prohibitions, and ownership/holding requirements support long-term alignment with shareholders .
- Near-term selling pressure: Upcoming vesting (RSUs 8,344; PSUs 15,587 within 60 days of Feb 1, 2025) and annual 3/1 grant cycles create periodic liquidity windows, but trading is constrained by blackout windows and 10b5-1 plan rules; pledging disallowed .
- Pay-for-performance sensitivity: 2024 AIP paid 35.7% of target to CEO on mixed results (Operating Revenue beat; Adjusted Net Income miss), and 2022–2024 PSUs paid 95.1%—payout variability tied to financial performance and stock price should continue, especially with 2025 LTIP’s pivot to Adjusted Diluted EPS .
- Retention and CIC economics: Double-trigger CIC at 300% of salary+target AIP (CEO) and full equity vest/continuation under specified scenarios provide strong protection; restrictive covenants and clawbacks mitigate post-exit risk .
- Governance mitigants: Separate Chair/CEO, independent committees, and no option repricing or CIC excise tax gross-ups indicate strong governance quality; say-on-pay support (~92%) reduces event risk from shareholder dissent .