WellPoint Said to Hire Spencer Stuart to Lead CEO Search

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Former WellPoint CEO Angela Braly
Angela Braly, former chief executive officer of WellPoint Inc. Photographer: Andrew Harrer/Bloomberg

WellPoint Inc., the second-biggest U.S. health insurer, has chosen recruiting firm Spencer Stuart & Associates Ltd. to lead its search for a new chief executive officer, according to a person familiar with the decision.

The search firm was picked over candidates including Chicago-based Heidrick & Struggles International Inc., which already has a contract with WellPoint for other recruiting work, according to the person, who wasn’t authorized to speak publicly about the decision.

Former CEO Angela Braly resigned Aug. 28 after weeks of investor unrest over the Indianapolis-based insurer’s sliding profit forecasts and falling enrollment. The company has said it expects the replacement search to take three to six months.

The choice of Spencer Stuart over Heidrick & Struggles “could be viewed as a signal the focus of the search will likely be an external candidate,” Brian Wright, a New York-based insurance analyst at Monness Crespi Hardt & Co., said in a telephone interview.

WellPoint fell less than 1 percent to $58.48 at the close of trading in New York. The shares have gained 1.9 percent since Braly’s resignation.

Even before the CEO’s departure, investors had suggested James Carlson, CEO at insurer Amerigroup Corp.; David Snow Jr., the former chief of Medco Health Solutions Inc.; and Gail Boudreaux, the head of the health plan division at UnitedHealth, as possible replacements, said Jason Gurda, of Leerink Swann & Co. in New York, and Thomas Carroll, of Stifel Nicolaus & Co. in Baltimore.

Replacement Touted

Names touted from within the company include Kenneth Goulet, an executive vice president, the analysts said in telephone interviews last month.

“As we have previously disclosed, the board has established a search committee, and will retain an outside executive search firm to help manage the process of selecting WellPoint’s next chief executive,” said Kristin Binns, a company spokeswoman, said in an e-mail yesterday.

Spencer Stuart previously has led executive and board director hunts for companies including Facebook Inc., Comcast Corp. and Talbots Inc. The firm also was hired by Hewlett-Packard Co., the world’s largest personal-computer maker, in August 2010 for the search that installed Leo Apotheker as CEO, before he was pushed out 11 months later amid declining sales.

James Horton, a spokesman for Spencer Stuart, said in an e-mail that client confidentiality agreements bar the recruiter from confirming or denying any contracts.

UnitedHealth Group Inc., based in Minnetonka, Minnesota, is the biggest U.S. health insurer.

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