UPDATE 3-Aetna CEO Williams to retire, president elevated

* Bertolini to take over as CEO, chairman

* Williams to hand over CEO post Nov. 29

* Aetna shares rise 1.7 percent, as HMO stocks rise
(Adds analyst comment, compensation details)

By Lewis Krauskopf

NEW YORK, Oct 20 (BestGrowthStock) – Aetna Inc (AET.N: ), the No. 3
U.S. health insurer, said Chief Executive and Chairman Ron
Williams is retiring and will be succeeded in those roles by
its president, Mark Bertolini.

Williams, 60, will hand over the CEO job to Bertolini, 54,
effective Nov. 29. Williams will then become executive chairman
until April 2011, when he will retire from the company and
Bertolini is expected to be elected chairman.

“After nearly 10 years at Aetna and with the company
performing well, it is time to step aside,” Williams said in a
press release.

Bertolini joined Aetna in 2003 from Cigna Corp (CI.N: ) and
was named president in 2007.

While he has gained exposure to Wall Street through regular
appearances on quarterly conference calls, Bertolini also has
been integral in various company strategic initiatives,
including issues related to healthcare reform and Aetna’s
expansion into Medicaid and to international markets, company
spokesman Fred Laberge said.

“This is really a carefully planned succession … Ron and
Mark have worked very closely together,” Laberge said.

Analysts said the leadership change was not surprising.

“I don’t think investors will view it as leading to any
kind of major changes in strategy or operational focus,”
Collins Stewart analyst Brian Wright said.

Aetna shares were up 1.7 percent at $31.41 in afternoon
trading on the New York Stock Exchange, on a strong day for
health insurance stocks ahead of a closely watched
recommendation on insurer spending rules. [ID:nN20212411]

Williams joined Aetna from rival WellPoint Inc (WLP.N: ) in
early 2001, and quickly rose to president under former CEO and
Chairman John Rowe, who was widely credited with turning the
company around after a series of financial mishaps in the late
1990s.

The unflappable Williams quickly grew into the role of the
face of the company after being named CEO in February 2006,
including offering frequent public commentary during the health
reform debate.

He was one of about a dozen CEOs who met with President
Barack Obama just after his inauguration in January 2009 to
discuss the U.S. economy.

Aetna’s shares have lost more than a third of their value
since Williams took over as CEO, slightly lagging the industry,
as measured by the the S&P Managed Health Care index (.GSPHMO: )
of large health insurers.

Wells Fargo analyst Peter Costa said Williams has been one
of the industry’s strongest CEOs, citing his operational
skills, although he noted that Williams has had some mixed
reviews on Wall Street.

Williams has pension benefits valued at about $7.4 million,
according to the company’s latest proxy filing. He also is owed
deferred compensation totaling about $25.8 million, according
to the proxy.

Williams has agreed to be a consultant to Aetna on public
policy, regulatory strategy and other matters through February
2012, and will be paid $20,000 per month, the company said.

Bertolini’s salary will be $1 million, up from $932,000,
and he will be eligible for an annual bonus of at least $3
million, should he achieve various goals.
(Reporting by Lewis Krauskopf; Editing by Gerald E. McCormick,
Maureen Bavdek and Steve Orlofsky)

UPDATE 3-Aetna CEO Williams to retire, president elevated