Exhibit 10.16

 

CERTAIN COMPENSATION ARRANGEMENTS

WITH HEALTH NET, INC.’S EXECUTIVE OFFICERS

 

Base Salaries

 

The annual base salaries for the Company’s executive officers as of February 24,
2005 are as set forth below.

 

NAME AND POSITION

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   BASE SALARY

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Jay M. Gellert

President and Chief Executive Officer

   $ 900,000  

Jeffrey M. Folick

Executive Vice President, Regional Health Plans and Specialty Companies

   $ 540,000  

Stephen D. Lynch

President, Regional Health Plans

   $ 450,000 (1)

Karin D. Mayhew

Senior Vice President of Organization Effectiveness

   $ 375,000  

Steven H. Nelson

President of Health Net of the Northeast

   $ 400,000 (2)

Anthony S. Piszel

Executive Vice President, Chief Financial Officer

   $ 500,000  

Marvin P. Rich

Executive Vice President, Operations

   $ 525,000  

Jonathan Scheff, M.D.

Senior Vice President and Chief Medical Officer

   $ 341,550 (3)

B. Curtis Westen, Esq.

Senior Vice President, General Counsel and Secretary

   $ 500,000  

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NAME AND POSITION

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   BASE SALARY

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Christopher P. Wing

Executive Vice President, Regional Health Plans and Specialty Companies

   $ 525,000

James E. Woys

President of Health Net Federal Services

   $ 475,000

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(1) As reported in the Company’s Form 8-K filed with the Securities and Exchange
Commission (the “SEC”) on February 9, 2005, Mr. Lynch’s salary was increased in
January 2005 in conjunction with his appointment to President, Regional Health
Plans for the Company.

(2) As reported in the Company’s Form 8-K filed with the SEC on March 10, 2005,
Mr. Nelson was designated, on March 4, 2005, as a Section 16 reporting officer.
Mr. Nelson’s salary was increased in January 2005 in conjunction with his
appointment to President of Health Net of the Northeast.

(3) Reflects the $11,550 increase in Mr. Scheff’s annual base salary for 2005
approved by the Compensation Committee on February 24, 2005.

 

Annual Incentive Compensation to Be Earned in 2005

 

On February 24, 2005, the Compensation Committee established the 2005
performance goals for the eligibility of the Company’s executive officers for
bonus awards under the Plan. The Compensation Committee designated the executive
officers eligible to participate in the Plan for 2005. The 2005 performance
goals were set in a manner consistent with the 2004 goals, and include
pre-established corporate, business unit and individual performance goals.
Specifically, for 2005, the Plan is to be funded based on the Company attaining
its earnings per share goals as approved by the Compensation Committee. Actual
incentive awards for 2005 are to be paid on performance against pre-established
corporate, business unit and individual performance goals. Corporate goals for
2005 are based upon earnings per-share, commercial membership and employee
satisfaction improvement. Business unit goals vary, but are based on financial
and operating performance and employee satisfaction improvement. The
Compensation Committee established individual target bonuses so that a
participant under the Plan would be entitled to receive from 50% to 125% of his
or her base salary as a target bonus, with a payout ranging from 0% to 125% of
target bonus depending upon the attainment of total performance goals. The
Compensation Committee has the discretion to reduce but not increase the amount
of a participant’s bonus under the Plan.