Wednesday, June 8, 2016

No. 165: Executive Compensation in the Insurance Industry—2015 Data Filed with the Nebraska Department of Insurance

In Nos. 163 and 164 (posted May 23 and May 31, 2016), I showed tabulations of 2015 executive compensation in the insurance industry from filings with the Securities and Exchange Commission (SEC) and the New York Department of Financial Services (DFS). They were my first major tabulations of executive compensation data since I ended publication of The Insurance Forum after the December 2013 issue.

Another Tabulation
Here I present another tabulation of 2015 data, this time from filings with the Nebraska Department of Insurance. In the final seven years of the Forum, I listed individuals who received $1 million or more each year. In No. 163, I listed individuals who received $5 million or more in 2015 according to SEC data. In No. 164, I listed individuals who received $3 million or more in 2015 according to DFS data. Here I list individuals who received $3 million or more in 2015 according to Nebraska data. The tabulation is at the bottom of this blog post.

The Supplemental Compensation Exhibit
The Nebraska data are from a "Supplemental Compensation Exhibit" developed in 1984 by the National Association of Insurance Commissioners (NAIC). The exhibit is used in a few states that require executive compensation data from their domestic companies; in some of those states the data are confidential. Nebraska has an insurance company executive compensation disclosure statute that was enacted in 1913 as part of the reforms that grew out of the Hughes-Armstrong investigation in New York in 1905. The statute requires all insurance companies doing business in Nebraska to file executive compensation data with the Department.

The exhibit has ten columns: name and principal position, year, salary, bonus, stock awards, option awards, sign-on payments, severance payments, all other compensation, and totals. Data are shown for the current year and the two preceding years, and include data for the ten highest compensated individuals. Instructions for completing the exhibit were prepared by the NAIC. I used the "totals" column to prepare this tabulation. Where more than one individual is shown for a company, they are listed in descending order of compensation.

How To Obtain the Nebraska Data
For many years I obtained copies of the exhibits through a public records request filed with the Department. In recent years the Department prepared a CD containing the exhibits. Anyone desiring exhibits for one or a few companies should indicate the name or names. The CD containing all the exhibits may be obtained from the Nebraska Department of Insurance, 941 "O" Street, Suite 400, Lincoln, NE 68508. The cost is $80.

A Major Problem with the Exhibit
I have long been troubled by a major problem with the exhibit. In the case of a group of related companies, the exhibit allows a company to use either of two methods of disclosure: (1) the aggregate amount paid to each individual by all companies in the group, or (2) only the amount allocated to the company named on the exhibit. Most companies show the aggregate figures. However, companies who allocate create a serious problem for persons assembling the data.

For example, consider the Progressive group, which allocates. Glenn Renwick is the principal executive officer. I found exhibits for nine Progressive companies showing these amounts of compensation for him adding up to $3,909,234, the figure shown in my tabulation:

Progressive Direct Ins Co $1,132,773
Progressive Casualty Ins Co 601,629
Progressive Specialty Ins Co 552,281
Progressive Advanced Ins Co 511,239
Progressive Universal Ins Co 350,755
Progressive Preferred Ins Co 326,123
Progressive Northwestern Ins Co 226,439
Progressive Classic Ins Co 115,528
Progressive Max Ins Co 92,467

There are two serious problems in addition to the effort needed to assemble the data. First, in addition to the companies listed above, the group may have other companies that are licensed in Nebraska. Second, in addition to the companies listed above, the group may have other companies that are not licensed in Nebraska. Therefore, when a company allocates, some individuals' total compensation may be understated.

In assembling the data below, I did not make what would have been a Herculean effort to identify all the companies in each group that allocates. For that reason, some data in the tabulation may understate an individual's total compensation. Also, some individuals who received more than $3 million of total compensation may be omitted from the tabulation.

Consider another dimension of the problem. The Liberty Mutual group allocates, but indicates the percentage allocated to the company whose data are in the exhibit. For example, Liberty Mutual Insurance Company's exhibit says: "Effective January 1, 2014, allocation to the reporting insurer is 50% consistent with its governing intercompany pooling arrangements." Therefore, I doubled each total in the exhibit to calculate each individual's total compensation from all companies in the group.

There are two simple solutions to the problem. One is for the Department to instruct companies to show the total compensation paid to each individual by all companies in the group. Another solution is for the Department to add one more column to the exhibit to show the total compensation paid to each individual by all companies in the group.

My Recent Correspondence with the Department
I have written to the Department previously on this matter, but my concern has not been addressed. On May 16, 2016, I wrote to the Department again. On May 31, the Department denied my request. On June 3, I wrote to the Department accepting the decision, albeit with disappointment, and requesting a revision of the CD next year to address the problems associated with company groups that allocate.

Available Material
I am offering a 27-page complimentary PDF consisting of the NAIC's instructions for completing the supplementary compensation exhibit, six sample exhibits (Guardian Life, Liberty Mutual, Massachusetts Mutual, New York Life, Northwestern Mutual, and Progressive Direct), and three letters (my May 16 letter, the Department's May 31 letter, and my June 3 letter). Email and ask for the June 2016 package relating to executive compensation disclosure in Nebraska.

Compensation Data for 2015 from Nebraska
Ace Property & Casualty Ins Co
John J Lupica $5,500,000
Acuity, A Mutual Ins Co
Benjamin M Salzmann 7,966,944
Aetna Life Ins Co
Mark T Bertolini 17,261,900
Gary W Loveman PhD 8,005,714
Karen S Lynch 7,758,787
Shawn M Guertin 6,414,029
Francis S Soistman Jr 5,219,831
Margaret M McCarthy 4,286,948
William J Casazza 3,391,462
Steven B Kelmar 3,044,200
Allianz Global Risks US Ins Co
Arthur Moossmann 3,261,660
Allied World Ins Co
John R Bender 3,157,833
Allied World National Assurance Co
Scott A Carmilani 16,096,208
Wesley D Dupont 5,785,271
W Gordon Knight 3,203,374
Allstate Ins Group
Thomas J Wilson 27,020,510
Don Civgin 16,571,629
Matthew E Winter 8,523,727
James DeVries 8,433,799
Judith P Greffin 8,133,223
Katherine A Mabe 5,850,830
Steven P Sorenson 5,627,705
Sanjay Gupta 5,205,825
Michael Roche 4,851,690
Suren Gupta 4,669,552
Steven E Shebik 4,435,082
Alterra America Ins Co
Francis Michael Crowley 3,674,828
Richard R Whitt III 3,130,512
Ambac Assurance Corp
Diana Newman Adams 3,461,184
American Bankers Ins Co of Florida
Gene Edward Mergelmeyer 4,297,746
Steven Craig Lemasters 3,232,383
American Family Ins Co
Jack C Salzwedel 7,677,663
American Family Life Assurance Co
Daniel P Amos 11,302,436
Kriss Cloninger III 6,317,098
John S Amos 5,954,082
Paul S Amos II 4,355,478
Eric M Kirsch 3,696,963
American Fidelity Assurance Co
David R Carpenter 4,311,128
American General Life Ins Co
Jay S Wintrob 4,120,000
Jana W Greer 3,193,854
American National Ins Co
Robert Lee Moody 8,266,699
American United Life Ins Co
James S Davison 3,017,501
Ameritrust Ins Corp
Robert Samuel Cubbin 3,205,159
Aspen American Ins Co
Mario Vitale 3,708,036
Assured Guaranty Corp
Dominic Frederico 12,172,263
James Michener 4,293,430
Robert Bailenson 3,368,468
Russell Brewer 3,068,032
Atlantic Specialty Ins Co
Timothy M Miller 4,773,465
Austin Mutual Ins Co
T Van Berkel 3,169,874
Auto Club Ins Assn Group
Charles Podowski 9,068,320
Steven Monahan 4,411,337
AXA Equitable Life Group
Mark Pearson 5,083,187
Chicago Title Ins Group
Raymond Randall Quirk 14,378,793
Peter Tadeusz Sadowski 8,422,950
Michael Louis Gravelle 5,828,544
Roger Scott Jewkes 3,262,636
Michael Joseph Nolan 3,103,853
Anthony John Park 3,094,933
Erika Meinhardt 3,091,795
Richard Lynn Cox 3,046,482
Cigna Health & Life Ins Co
Matthew Glenn Manders 3,978,547
CNA Financial Group
Thomas F Motamed 10,175,047
D Craig Mense 4,299,991
Jonathan D Kantor 3,716,504
Doctors Co an Interinsurance Exchange
Richard Elliott Anderson MD 8,745,532
Esurance Ins Co of NJ
Gary C Tolman 3,147,125
Everest Reinsurance Group
Dominic James Addesso 8,165,830
Barry Howland Smith 6,356,174
Frank Nicholas Lopapa 3,580,850
John Paul Doucette 3,444,096
Mark Stuart de Saram 3,165,446
Ronald David Diaz 3,162,513
Factory Mutual Ins Co
Thomas A Lawson 5,058,398
Jonathan W Hall 3,891,769
Farmers Ins Exchange
Jeffrey J Dailey 4,156,791
Federated Mutual Ins Co Group
Jeffrey E Fetters 4,971,881
Fidelity & Guaranty Life Ins Co
Christopher J Littlefield 3,010,770
First American Title Ins Co
Dennis J Gilmore 4,903,136
Stephen R Farber 3,778,697
James W McIntosh 3,512,360
Philip Salomon 3,297,063
Jeffrey S Mitzner 3,158,422
GEICO Ins Group
Olza Minor Nicely 14,641,954
William Evan Roberts 4,326,350
General Reinsurance Corp
Franklin Montross IV 6,411,286
Genworth Mortgage Ins Corp
Kevin Douglas Schneider 5,334,224
Daniel Joseph Sheehan IV 5,027,680
Great American Ins Group
Carl H Lindner III 7,844,281
S Craig Lindner 7,365,218
Stephen R Rosenthal 4,162,282
Great-West Life Assurance Co
Robert L Reynolds 3,424,039
Guardian Life Ins Co of America
Deanna Mulligan 5,508,527
Douglas Dolfi 3,090,653
Hanover Ins Co
Frederick Eppinger 5,014,308
Hartford Financial Services Group
Douglas G Elliot 4,442,211
Jonathan R Bennett 3,067,133
Health Care Service Corp
Patricia A Hemingway Hall 16,572,097
Colleen Foley Reitan 7,880,513
Paula A Steiner 5,654,068
Kenneth S Avner 4,652,391
Deborah Dorman-Rodriguez 4,538,952
John Cannon III 4,424,919
Austin J Waldron 3,471,211
Karen M Atwood 3,419,406
Bert E Marshall 3,078,084
Jimmy D Rodgers 3,009,492
Homesite Ins Co
Fabian John Fondriest 3,653,512
Humana Ins Co
Bruce D Broussard 6,263,682
Brian P LeClaire 3,417,341
James E Murray 3,327,387
Insurance Co of the West
Ernest Rady 7,956,444
Kevin Prior 4,454,879
Jackson National Life Ins Co
Michael A Wells 10,304,656
James R Sopha 8,097,116
Paul C Myers 6,964,194
Clifford J Jack 5,775,378
Kenneth H Stewart 4,352,581
Thomas J Meyer 3,431,363
Gregory P Cicotte 3,404,357
John Hancock Life Ins Co (USA)
Craig Bromley 4,088,568
Liberty Mutual Ins Group
David H Long 16,632,928
Timothy Sweeney 6,295,032
A Alexander Fontanes 6,200,578
J Paul Condrin III 6,047,350
Christopher L Peirce 4,035,076
Dennis J Langwell 3,919,476
Luis Bonell Goytisolo 3,011,310
Liberty National Life Ins Co
Michael W Pressley 6,843,502
Roger C Smith 6,666,032
Lincoln National Life Ins Co
Dennis R Glass 41,665,850
Mark E Konen 8,206,770
Randal J Freitag 6,980,528
Wilford H Fuller 6,762,676
Ellen G Cooper 5,201,295
Charles C Cornelio 5,120,505
Massachusetts Mutual Life Ins Co
Roger Crandall 12,056,510
Elaine Sarsynski 4,968,484
Michael Fanning 4,724,503
Michael Rollings 3,771,586
Melvin Corbett 3,532,761
Elizabeth Chicares 3,258,039
Andrew Moore 3,196,694
MBIA Ins Corp
Joseph W Brown 7,837,078
C Edward Chaplin 4,562,875
William Fallon 4,562,875
Medical Protective Co
Timothy Kenesey 6,403,446
Metropolitan Life Ins Group
Steven A Kandarian 13,986,781
John C Hele 4,939,644
Maria R Morris 4,225,396
Martin J Lippert 3,970,838
Paul Blanco 3,343,419
Steven J Goulart 3,296,913
Mortgage Guaranty Ins Corp
Curt Culver 10,707,386
Patrick Sinks 5,336,067
Jeffrey H Lane 3,138,079
Mount Vernon Specialty Ins Co
Thomas P Nerney 13,099,236
Munich Reinsurance America Inc
Anthony J Kuczinski 4,263,158
Mutual of America Life Ins Co
Thomas J Moran 5,005,453
Mutual of Omaha Group
Daniel P Neary 31,656,942
National Fire & Marine Ins Co
David N Fields 3,330,885
National Indemnity Co
Ajit Jain 11,785,006
National Life Ins Co (VT)
Mehran Assadi 4,620,347
National Western Life Ins Co
Robert L Moody 5,697,364
Nationwide Ins Group
Steve Rasmussen 7,976,240
Navigators Ins Co
Stanley A Galanski 3,086,067
New York Life Ins Co
Theodore A Mathas 19,723,078
John Y Kim 9,670,600
Christopher O Blunt 6,670,600
Mark W Pfaff 5,290,450
Sheila K Davidson 4,396,353
Peter J McAvinn 3,941,692
John P Curry 3,392,886
John T Fleurant 3,309,062
Northwestern Mutual Life Ins Co
John E Schlifske 13,359,233
Gregory C Oberland 4,932,626
Ronald P Joelson 3,443,932
Odyssey Reinsurance Co
Brian D Young 5,234,282
Philippe E Mallier 3,026,305
Pacific Life Ins Co Group
James T Morris 8,274,893
Khanh T Tran 3,910,035
Pan-American Life Ins Co
Jose Suarez Suquet 5,914,688
Carlos Fernando Mickan 3,107,233
Partner Reinsurance Co of the US
Theodore Walker 3,066,875
Penn Mutual Life Ins Co
Eileen McDonnell 4,820,694
Pennsylvania Ins Co
Sidney Ferenc 9,026,258
Steven Menzies 8,993,837
Pennsylvania Natl Mut Cas Ins Co
Kenneth R Shutts 5,433,541
Permanent General Assurance Corp
Randy P Parker 4,470,243
Primerica Life Ins Co
Richard D Williams 5,147,906
John A Addison 5,146,545
Principal Life Ins Co
Larry D Zimpleman 7,953,746
James P McCaughan 6,348,503
Terrance J Lillis 3,888,109
Daniel J Houston 3,826,609
Proassurance Casualty Co
William Stancil Starnes 3,859,482
Progressive Ins Group
Glenn M Renwick 3,909,234
Protective Life Ins Co
John Dixon Johns 42,529,073
Carl Sitter Thigpen 9,074,528
Richard Joseph Bielen 8,190,998
Deborah Joyce Long 6,371,658
David Adams 5,234,714
Michael Gus Temple 4,340,230
Steven Glen Walker 3,867,768
John Robert Sawyer 3,715,538
Prudential Ins Group 
John Robert Strangfeld Jr 19,849,598
Mark Brown Grier 16,461,512
James J Sullivan 12,432,146
Charles Frederick Lowrey 12,329,632
Stephen Pelletier 8,603,581
Michael K Lillard 8,321,172
David A Hunt 7,434,483
Robert Michael Falzon 6,977,184
Garrett Sleyster 4,866,710
David H Bessey 4,618,476
Lori Dickerson Fouche 3,764,038
Christine Cannon Marcks 3,701,503
QCC Ins Co
I Steven Udvarhelyi MD 8,067,070
Daniel J Hilferty 4,361,976
Radian Guaranty Inc
Sanford A Ibrahim  6,309,913
Renaissance Reinsurance US Inc
H Elizabeth Mitchell 6,630,756
RGA Reinsurance Co
Albert Greig Woodring 7,215,798
Melville Jay Young 5,958,744
Jack Brien Lay 4,518,348
Paul Arthur Schuster 3,337,106
RiverSource Life Ins Co
Lynn Ann Hopton 14,795,047
Yvonne E Stevens 11,875,348
Steven B Staver 5,331,621
Bridget M Sperl 4,900,623
John R Woerner 4,543,077
Gumer C Alvero 4,324,124
RLI Ins Co
Jonathan E Michael 13,533,411
Michael J Stone 4,688,557
Craig W Kliethermes 4,558,001
RSUI Indemnity Co
David Leonard 3,361,193
Phillip McCrorie 3,016,926
Scor Reinsurance Co
Mark Kociancic 3,699,727
Selective Ins Co of America
Gregory E Murphy 4,518,164
John J Marchioni 3,119,570
Sentry Ins Group
Peter McPartland 5,812,178
Standard Ins Co (OR)
Floyd Fitz-Hubert Chadee 6,854,960
John Gregory Ness 4,241,832
Daniel J McMillan 4,036,026
State Farm Group
Edward Barry Rust Jr 13,339,940
Michael Leon Tipsord 7,069,474
Symetra Life Ins Co
Thomas M Marra 5,098,099
Teachers Ins & Annuity Assn
Roger Ferguson 17,850,547
William Riegel 6,112,266
Edward Van Dolsen 5,978,219
Thomas Garbutt 4,920,950
Edward Grzybowski 4,824,808
Ronald Pressman 4,711,739
Thomas Franks 4,678,149
Saira Malik 4,662,672
Stephen Gruppo 4,121,869
Thrivent Financial for Lutherans
Bradford L Hewitt 3,666,541
TIG Ins Co
Nicholas Bentley 3,192,746
Transamerica Life Ins Co
Mark W Mullin 3,467,017
Transatlantic Reinsurance Co
Michael C Sapnar 9,949,629
Steven S Skalicky 8,331,494
Paul A Bonny 3,406,126
Kenneth Apfel 3,018,387
Travelers Ins Group
Jay S Fishman 19,596,443
Brian W MacLean 8,176,212
William H Heyman 6,881,003
Jay S Benet 6,581,003
Alan D Schnitzer 6,507,322
Doreen Spadorcia 6,387,231
Gregory C Toczydlowski 3,834,757
Maria Olivo 3,236,213
Michael F Klein 3,039,299
Trustgard Ins Co
Thomas Howard Welch 3,681,323
Union Security Ins Co
John Steven Roberts 7,077,456
United Automobile Ins Co
Richard P Parrillo Sr 3,000,000
United States Fire Ins Co
Douglas Mendel Libby 13,615,153
Marc James Adee 5,074,145
Unum Group
Richard Paul McKenney 3,081,910
USAA Group
Steven A Bennett 5,470,340
Wesco Ins Co Group
Barry Zyskind 5,524,034
West Bend Mutual Ins Co
Kevin Alan Steiner 3,546,809
Western & Southern Life Ins Co
John Barrett 6,252,420
Wilton Reassurance Co
Chris Stroup 3,788,845
XL Life Ins & Annuity Co
Sarah Elizabeth Street 3,607,538
Zenith Ins Co
Kari L Van Gundy 3,633,988
Zurich American Ins Co
Michael Thomas Foley 4,352,109