Hey, Big Spender: Insurance Company CEO Salaries - BodyShop Business
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Hey, Big Spender: Insurance Company CEO Salaries

Before you start believing that billion-dollar judgments against State Farm and other insurance companies will bleed them dry (fat chance) and necessitate premium hikes, check out the exorbitant CEO salaries these companies pay. With paychecks and stock options like these, insurers obviously have a money tree planted somewhere.

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Since the recent class-action verdict against insurance giant State Farm, we’ve heard again and again how premiums will have to rise to offset the cost of no longer using aftermarket (A/M) crash parts.

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In fact, if you listened to the insurance side of the story, you’d think the $1.19 billion judgment (which is in appeal and hasn’t been paid yet) had bankrupted the once prosperous company. But based on the following CEO salaries — dug up by investigators at insure.com — it’s obvious that State Farm and many other property and casualty insurers aren’t exactly eating out of trashcans.

In 1998, CEOs at the country’s top property and casualty insurance companies took home an average of $2.8 million. You heard right — $2.8 million. In addition to regular compensation, those salaries included bonuses and stock options, which can dramatically inflate a corporate leader’s earnings.

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How does that compare to, say, the average American or the average shop owner? According to the Bureau of Labor Statistics survey of full-time wage and salary workers in the third quarter of 1999, the average American earns $28,392 annually. And according to industry statistics, the average shop makes a $35,000 profit annually. (That’s quite a difference in the number of zeros on an insurance CEO’s paycheck.)

Salary information for upper-level management at many insurance companies is publicly available through filings at the Securities and Exchange Commission (SEC). But SEC filings can be hard to compile. Lucky for us, some state insurance departments require companies doing business in their state to file compensation information. The salaries listed in the chart were acquired from the Nebraska Department of Insurance, which requires insurers to disclose the total compensation paid to the top 10 employees if their compensation package equals more than $100,000.

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If you’re not already sitting down, you might want to grab a seat. Some of these totals are pretty unbelievable — others are just plain unfathomable.

1998 Insurer CEO Salaries

INSURANCE OFFICER

REGULAR SALARY

BONUS

OTHER COMPENSATION

GRAND TOTAL

Edward Rust, Jr.
CEO, State Farm

$1,526,094

n/a

n/a

$1,526,904

Jerry Choate
CEO, Allstate Insurance Co.

$657,008

$2,306,014

$6,005,120

$8,968,142

Martin Feinstein
Pres. & CEO, Farmers Insurance Co.

$900,000

$569,500

$188,110

$1.657,610

Olza Nicaly
CEO, GEICO
General Insurance

$694,232

$3,497,000

n/a

$4,191,232

Michael Carpenter
CEO, The Travelers Insurance Co.

$579,840

$1,072,736

$7,224,475

$8,877,051

Edmund Kelly
CEO, Liberty Mutual Insurance

$521,300

$952,200

$408,634

$1,882,134

Dale Mathwich
CEO, American Family Mutual Insurance Co.

$727,807

$63,600

$125,062

$916,469

Roger H. Eigsti
Chairman & CEO, Safeco Insurance Co.

n/a

n/a

n/a

$1,064,455

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