Blues fire Unhjem in attempt to restore trust
FARGO - The ouster of longtime executive Mike Unhjem from his job at Blue Cross Blue Shield of North Dakota is among the first of several moves the insurer hopes will help rebuild trust among its policyholders, said Dennis Elbert, chairman of the company's board of directors.
Elbert said Tuesday that the board's decision Monday to replace Unhjem as president and chief executive officer was based on a number of factors, but he said public outcry over a Grand Cayman Islands resort getaway attended by more than 30 employees, including Unhjem, played a role.
"Obviously, this has gotten the public's attention. It's one element, it's one component," Elbert said.
Unhjem did not return a message left on his cell phone Tuesday seeking comment. In a written statement released through Blue Cross Blue Shield, Unhjem said he felt privileged to have worked for "the best company in North Dakota for nearly 23 years.
"I wish the company and my former co-workers nothing but the best as the future unfolds," Unhjem said in his written statement.
When news of the resort getaway began to spread, Unhjem cut short his trip and returned to Fargo to answer questions.
He said he would pay for his expenses to remove any questions in the public mind about the appropriateness of his presence at the retreat, which the company said was planned in 2007 as a way to reward sales staff.
After defending the trip as a common industry practice, Blue Cross Blue Shield has since announced it will stop using trips to reward employees.
North Dakota Insurance Commissioner Adam Hamm said Tuesday he planned to move forward with an investigation into the company's compensation and bonus structure, a move he announced after outcry grew over the Cayman Islands trip.
"The wheels are in motion," said Hamm, who added that Elbert informed him Tuesday morning of the board's decision to replace Unhjem with Tim Huckle, Blue Cross Blue Shield executive vice president of health operations. Huckle will serve as interim president and CEO of the company.
Hamm said the Cayman Islands trip has sparked more calls and e-mails to his office, 70 and 52, respectively, as of Monday night, than any other issue since he took office in 2007.
Elbert declined to discuss whether Unhjem, whose total compensation in 2008 was $664,431, will receive a severance package, stating he could not talk about the details of the "confidential, legal employment agreement" the company has with Unhjem.
Hamm, whose agency has locked horns with Blue Cross Blue Shield over the company's effort to increase premiums, said he was not familiar with details of Unhjem's employment agreement But Hamm said it was likely his office would be made aware of any severance payments "sooner rather than later."
Pressed for details about the board's decision, Elbert said it did not hinge on a single reason.
"There were a number of issues, a number of challenges over the past few years," he said. "I really don't want to get into a laundry list of items, but the challenges of the past few years came to a point where the board felt it was apparent and a right decision to look for a change in leadership."
Elbert said he and another board member met with Unhjem after Monday's meeting and told him of the outcome.
In 2006, the public spotlight fell on Unhjem when he pleaded guilty in Clay County District Court to a DWI charge.
He was fined $500 and a 90-day jail sentence was stayed.
Attempts to reach Huckle for comment on Tuesday were not successful.
Denise Kolpack, vice president of corporate communications for Blue Cross Blue Shield, said Huckle was dealing with a number of issues Tuesday and it was decided Elbert would speak for the company.
Elbert said the board was relying on Huckle and his executive team to rebuild public trust.
He said a number of additional changes could be expected in the near future, though he declined to discuss details.