Along with information about proposed pay, the department also asked the companies to provide outside experts who could discuss the appropriateness of their compensation.

Whether the proposed future pay will become public remains to be seen. The Insurance Department says the information will be disclosed - unless the firms make a convincing case otherwise.

Asked whether Highmark would commit to revealing the proposed future compensation packages, spokesman Michael Weinstein replied, "I don't know. I can't answer that question."

Independence spokeswoman Williams also said the issue of disclosure was unresolved.

Along with pay, regulators must consider many other important issues, ranging from the merger's impact on customers' bills to the ongoing controversy over the plans' massive surpluses. Highmark had a reserve to pay potential future claims of $3.6 billion last year. Independence Blue Cross' surplus was $1.7 billion.

In past years, Blue Cross, unlike Highmark, has refused to make public the entire pay of its chief executive. In response to questions from The Inquirer, it has changed that policy and disclosed his $1.6 million in compensation.

The firm is not required to disclose the total; it did so voluntarily. Since they pay federal taxes, Highmark and Independence Blue Cross do not face federal disclosure rules that apply to most nonprofit organizations. Moreover, Frick draws portions of his pay from a dozen Blue Cross entities, many of which are profit-making firms not subject to disclosure under Pennsylvania law.

Melani was paid twice Frick's amount - even though the two Blues are similar in size. Of Melani's compensation, $2 million was a bonus.

The Highmark chief's compensation has doubled in the last two years. The company said the surge rewarded a big boom in net income in recent years.

For-profit subsidiaries

For example, Independence Blue Cross, as a nonprofit parent company, owns two key for-profit subsidiaries, AmeriHealth HMO Inc. and QCC Insurance Co., which operates its Personal Choice plans.

Because of the hybrid nonprofit/for-profit nature of their organizations, Highmark's and Independence Blue Cross' executive compensation does not follow trends in either sector.

Both Frick and Melani earn more than their CEO colleagues at even the biggest charities, except for large nonprofit health organizations, according to an annual survey of executive compensation by the Chronicle of Philanthropy.

To provide perspective, consider that the two Blues have annual revenue of about $10.7 billion each.

The chief executive of the $9.5 billion Lutheran Services in America earns $158,000, one-tenth of what Frick earns and one-twentieth of Melani's pay.

On the other hand, the president of Catholic Healthcare West, a big nonprofit health system in San Francisco, earned $4 million last year. The hospital system had about half the revenue of each Pennsylvania Blue.

Frick and Melani also earn less than the chief executives of two of their major for-profit competitors.

Aetna Inc. and UnitedHealth Group Inc., two insurance companies that sell health policies in Pennsylvania, pay each of their top executives more than $15 million. However, their annual revenue is also much higher.

Salary criticism