So, lots of griping and complaining on here but for those of us who lived through the previous incompetent regime, project nickel, and near bankruptcy, there is much to be grateful for as an employee of Molina. No one is made to stay at a job at Molina against their will. But for those who participated in turning the company around, we know what new leadership has done and it’s been a great ride since May 2017. If you don’t believe me, see a note from Gordon Haskett Wall Street Analysts from 8/21/2024:
“Three More Years, Three More Years!”
“Four More Years” is a well-known political slogan that fans of incumbents have been chanting since the 1972 Republican National Convention in Miami. A lesser known slogan -- “Three More Years” -- has been slower to catch on but apparently it has been heard outside of Molina Healthcare (MOH) recently and the board responded yesterday by handing CEO Joe Zubretsky an incentive package that is designed to keep him around until (at least) the end of 2027. The 67-year-old Zubretsky got to this Medicaid insurer in the fall of 2017 and all MOH's stock has done since then is move from the $60s to the $350s. None of MOH's peers have returns that are anywhere close to these and Zubretsky now has until the end of 2027 to squeeze a little more outperformance from a tube that has so far been bountiful. Some longer-term health insurance observers will remember that Zubretsky was hired to fix an engine that had been sputtering badly under Mario and John Molina. The brothers had been tossed in May of 2017 and given Zubretsky's age at the time, we figured he'd been hired to sell the company after he nursed it back to health. It's a good thing we were wrong because MOH's returns as a standalone have been outstanding and to keep the ball rolling, Zubretsky has received a grant of 146K PSUs that could swell to 219K shares. As we mentioned above, MOH is a $350 stock so we're talking about the possibility of this growing into a nine-figure package.
*Zubretsky is a former Aetna executive who once served as that company's CFO and though he is on the older side, it did occur to us yesterday that MOH's board may have decided to lock him down before CVS tried any funny business. CVS has been sputtering recently and has had particular trouble of late in its health insurance business. So much trouble, in fact, that it tossed the head of that business overboard earlier this month and it did occur to us yesterday that CVS could be setting up to be another Starbucks, with Zubretsky playing the role of Brian Niccol. If you want to take this one step further, consider that Sachem Head bought a new 2.5m share CVS position during Q2 that was disclosed last week.