U.S. Securities and Exchange Commission
Washington, DC 20549
NOTICE OF EXEMPT SOLICITATION
1. Name of the Registrant:
WELLPOINT, INC.
___________________________________________________________________________
2. Name of the person relying on exemption:
CTW INVESTMENT GROUP
___________________________________________________________________________
3. Address of the person relying on exemption:
1900 L STREET, NW, SUITE 900 WASHINGTON,DC 20036
___________________________________________________________________________
4. Written materials. Attach written materials required to be submitted
pursuant to Rule 14a6(g)(1):
April 18, 2012
Dear fellow WellPoint shareholders:
We are urging WellPoint Inc. shareholders to VOTE NO ON THE RE-ELECTION OF
SUSAN BAYH AND JULIE HILL at the May 16th annual meeting. These directors,
we believe, must be held accountable for WellPoint's refusal to a) disclose
the details of its high risk political spending, b) adequately address
long-standing investor concerns over political spending, and c) remedy a
flawed governance framework for approving political spending.
Co-operative Asset Management, CtW Investment Group, Marco Consulting Group,
Mercy Investment Services, and the Nathan Cummings Foundation represent
long-term investments in WellPoint. As long-term investors, we believe that
political activity, pursued for good reasons and in an appropriate manner,
and undertaken with a robust governance structure and clear disclosure, can
be positive and value-enhancing for shareholders. Unfortunately, WellPoint's
activities, in our opinion, embody the other extreme: political spending that
lacks adequate governance oversight and potentially places shareholder value
and corporate reputation at risk. Although our immediate concern is with the
company's handling of health care reform, recent controversy surrounding the
activities of the American Legislative Exchange Council, or "ALEC," and its
corporate funders, which includes WellPoint, is a timely reminder of the
reputational risks from corporate spending./1/
We collectively share two core concerns:
--WELLPOINT'S REFUSAL TO DISCLOSE DETAILS OF ITS POLITICAL SPENDING AND
FAITHFULLY ADDRESS INVESTOR CONCERNS. WellPoint is among the largest
members of America's Health Insurance Plans (AHIP), the national trade
association for the health insurance industry, and its Chairman/CEO is on
AHIP's Board of Directors. Bloomberg reported that AHIP provided $86
million to fund the U.S. Chamber of Commerce's (USCoC) highly-divisive
ad campaign attacking health care reform proposals, including specific
proposals which WellPoint explicitly endorsed. WellPoint has ignored
repeated queries to clarify its involvement in AHIP's $86 million
contribution and to reconcile the USCoC ad campaign against healthcare
reform with WellPoint's support for key provisions included in the
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/1/ The Washington Post reports in an April 12, 2012 article "Trayvon Martin
shooting spurs protests against companies with ties to legislative group,"
that there are growing protests against ALEC donors in the wake of the Trayvon
Martin shooting and ALEC's advocacy for the "stand your ground law." According
to National Public Radio (April 13, 2012) seven corporations Coca-Cola,
Pepsi, Mars, Kraft Foods, McDonalds, Wendy's and the software maker Intuit
have since dropped their memberships in ALEC. WellPoint is listed by
sourcewatch.org as a "Director Level sponsor" of ALEC's 2011 annual conference
a(http://www.sourcewatch.org/index.php?title=WellPoint).
/2/ "Insurers Gave U.S. Chamber $86 Million Used to Oppose Obama's Health Law,"
Bloomberg, Nov. 17, 2010. In a Jan. 13, 2010 article "Health Insurers Funded
Chamber Attack Ads," The National Journal, citing people familiar with the
situation, reported that WellPoint was among the contributors. The article was
written, however, prior to the release of tax records used by Bloomberg, and
estimates the total industry contribution at between $10 million and $20
million.
THIS IS NOT A SOLICITATION OF AUTHORITY TO VOTE YOUR PROXY. PLEASE DO NOT SEND
US YOUR PROXY CARD AS IT WILL NOT BE ACCEPTED.
health reform overhaul and its opportunities for growth going forward under
the new law./3/ Unfortunately, the board's opposition statement to a
shareholder proposal requesting further disclosure, Item 4 on the ballot,
is just the latest in a line of smoke and mirror tactics in which it has
repeatedly asserted to shareholders that it is committed "to participating
in the political process in a responsible way," and that "ample information
about our contributions" is already available. Yet, despite claiming to
provide significant, detailed disclosures of political contributions,
WellPoint refuses to disclose "special assessments" (any payments made in
addition to regular dues) to trade associations, which would cover
contributions like AHIP's $86 million to the USCoC. MOST ALARMING: THIS
APPEARS TO VIOLATE THE SPIRIT OF AN AGREEMENT WELLPOINT STRUCK IN 2007 WITH
ONE OF THE SIGNATORIES TO THIS LETTER TO PROVIDE CLEARER DISCLOSURE OF ITS
INDIRECT SPENBDING THROUGH TRADDE ASSOCIATIONS./4/
--WELLPOINT'S WEAK GOVERNANCE FRAMEWORK. WellPoint's board does not have a
standing committee to oversee its political spending and approves
contributions only to the extent that it endorses the total fiscal budget
for the year, of which political spending is a part. During the health care
reform debate, the board's duty to exercise objective, independent
oversight of management in the best interests of shareholders was severely
compromised by having four directors with close connections to lobbying
groups or political actors, which included entities active in the health
care reform debate./5/ WellPoint did not disclose those key relationships.
Two of those directors, Donald Riegle and William Bush are no longer on the
board due to WellPoint's mandatory retirement age policy. The other two,
Susan Bayh and Shelia Burke, remain on board, with the former subject to
re-election this year.
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/3/ Key provisions, such as the universal mandate and health insurance
exchanges, closely mirror the proposals for which WellPoint repeatedly expressed
support in investor presentations during 2009 and 2010 even as they were being
put at risk by the USCoC's war on reform. In fact, WellPoint stands to realize
significant top-line growth from the expansion of coverage to more than 30
million presently uninsured, a point CEO Angela Braly stressed at BMO Capital
Markets Focus on Healthcare Conference, Aug.5, 2010.
/4/ The Center for Political Accountability (CPA), in a report issued April 9,
2012, highlights that in 2007 WellPoint agreed to disclose "any portion of dues
or similar payments made by WellPoint to any national trade association that are
identified by the trade association as being used for non-deductible political
expenditures, if such portion is $50,000 or more in a calendar year." The CPA
concludes, however, that current disclosure, by not including special
assessments, "leaves significant room for misrepresentation of the company's
political spending . . . and undermines the ability of shareholders to assess
risks." CPA report available http://politicalaccountability.net/index.php?ht=
a/GetDocumentAction/i/6297
/5/ Donald Riegle is Chairman of APCO Government Affairs, a prominent lobbying
firm that did extensive work relating to health care reform and received $17.4
million from the USCoC in 2009 and over $5 million from AHIP between 2007 and
2009; Sheila Burke is Senior Policy Advisor on health care at Baker, Donelson,
Bearman, Caldwell & Berkowitz, a law and lobbying firm specializing in, among
other things, health care policy; Susan Bayh is married to Evan Bayh, a former
U.S. Senator whose vote during the reform debate was viewed as key by many and
whose father, former U.S. Senator Birch Bayh, actively lobbied on health care
during the reform debate; Evan Bayh now consults for the USCoC and is a partner
at prominent law and obbying firm, McGuire Woods LLP; and William Bush, who has
important political ties as the brother of former President G.H.W. Bush, uncle
to former President G.W. Bush and former Florida Gov. J. Bush.
THIS IS NOT A SOLICITATION OF AUTHORITY TO VOTE YOUR PROXY. PLEASE DO NOT SEND
US YOUR PROXY CARD AS IT WILL NOT BE ACCEPTED.
RESTORING ACCOUNTABILITY BEGINS WITH VOTING AGAINST SUSAN BAYH AND JULIE HILL
Ultimately, the persistence of serious gaps in disclosure, despite repeated
claims by the company to the contrary, and the board's blindness to the
potential conflict of interest that certain directors represent, opens a serious
credibility gap that demands directors be held directly responsible. We believe
Ms. Bayh, along with Shelia Burke (not up for re-election this year) embody the
profound conflicts of interest that continue to jeopardize the board's oversight
process. Ms. Hill, as the sole long-standing member of the Governance Committee
who is seeking re-election, must bear some responsibility for that committee's
failure to insist on a robust governance and disclosure regime for political
spending./6/
Voting against directors will also send a strong message to the board to uphold
the highest standards of political governance and disclosure, such as those
outlined recently by the International Corporate Governance Network (ICGN) in
its Statement and Guidance on Political Lobbying and Donations.
The signatories intend to make further information detailing these concerns
available upon request and in discussions with fellow shareholders. For more
information, please contact Michael Pryce-Jones, CtW Investment Group at
michael.pryce-jones@changetowin.org.
Sincerely,
Abigail Herron
/s/ Abigail Herron
Corporate Governance Manager
The Co-Operative Asset Management
$30 billion in assets under management.
Richard Clayton
/s/ Richard Chayton
Director of Research
The CtW Investment Group
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/6/ According to the 2012 proxy, Julie Hill recently stepped down from the
Governance Committee. However, she served on the committee throughout the
period of concern. Bayh appears to have just been re-appointed to the
committee, having served in 2009.
/7/ Available at http://www.responsible-investor.com/images/uploads/advertising/
ICGN_PLD.pdf
THIS IS NOT A SOLICITATION OF AUTHORITY TO VOTE YOUR PROXY. PLEASE DO NOT SEND
US YOUR PROXY CARD AS IT WILL NOT BE ACCEPTED.
The CtW Investment Group works with the pension funds of unions affiliated with
Change to Win that which hold approximately $200 billion in assets.
Jack Marco
/s/ Jack Marco
Chairman/CEO
The Marco Consulting Group
$120 billion aggregate value of client assets
Valerie Heinonen, o.s.u.
/s/ Valerie Heinonen, o.s.u.
Director, Shareholder Advocacy
Mercy Investment Services, Inc.
Assets under management include $400,000 in WellPoint shares
Laura Campos
/s/ Laura Campos
Director of Shareholder Activities
The Nathan Cummings Foundation
$415 million in assets
THIS IS NOT A SOLICITATION OF AUTHORITY TO VOTE YOUR PROXY. PLEASE DO NOT SEND
US YOUR PROXY CARD AS IT WILL NOT BE ACCEPTED.