After Gov. Rick Scott blasted Citizens Property Insurance Corp. for handing out huge raises to top employees, the company’s board responded Friday by highlighting how underpaid the company’s execs are compared to their counterparts at private insurance companies.
Scott said last month that the raises—which were as large as $31,000 and went to some of the same executives who had abused the company credit card last year—were “ridiculous” should be paid back.
Citizens—the government-run insurer of 1.3 million—thinks differently.
The company said its low compensation—and negative press about executive overspending, corporate misconduct, poor contracting and unpopular rate hikes for homeowners—have made it difficult to keep and hire talent.
For example, Citizens was recently looking to hire a new vice president of underwriting—a position that has seen two resignations in the last three years, including one that followed allegations of drunken sexual harassment at a company event (the charges were not substantiated). One candidate decided against joining Citizens because of the cloud of controversy surrounding the company.
“I was aware that Citizens had some challenges this past year, however; I did not realize the extent of those challenges and the scrutiny of which its leadership has come under,” the candidate told Citizens in February. “While I appreciate a challenge this does not seem to be a good fit for me.”
Another current employee said they would have difficulty finding another job with Citizens on their resume, “due to all the negative press.”
Citizens executives said that turnover has been increasing at the company, with many employees jumping ship to the private insurance market where they can make more money and face less public scrutiny. According to the company’s “Compensation Update,” Citizens’ execs are still underpaid, even after receiving double-digit raises last year.
More raises are on the way, as Citizens approved a 3-percent company-wide merit increase for this year. The merit increase is coupled with higher contributions for healthcare coverage.
Meanwhile, state employees have not received a raise in more than six years.
But some austerity is coming Citizens’ way, as the company has agreed to reduce daily maximums for employee meals. The company’s new policy will more closely track caps for state workers, who are bound by law to no more than $36 in food costs per day.
Some board members grumbled at the new policy (which does not apply to the board), saying that such low caps would make it hard to attract and retain talent.
Carlos Lacasa, chairman of the board, said he believed the tougher rules were a result of political pressure and media coverage, not sound policy.
John Rollins, a board member appointed by Scott, took issue with the $6 cap on breakfast meals (which is currently in effect for thousands of state workers).
Rollins said he bought a bagel before the meeting and the bill came out at $16.
“We should not allow the peanut gallery to run this company,” said Rollins. “And we can’t.”
Board members—who came under scrutiny last year for expensive dinners after board meetings--continue to operate without any official caps on travel and meal spending.
See the company’s “Compensation Update” here.