After Gov. Rick Scott blasted Citizens Property Insurance Corp. for handing out huge raises to top employees, the companys board responded Friday by highlighting how underpaid the companys execs are compared to their counterparts at private insurance companies.
Scott said last month that the raiseswhich were as large as $31,000 and went to some of the same executives who had abused the company credit card last yearwere ridiculous should be paid back.
Citizensthe government-run insurer of 1.3 millionthinks differently.
The company said its low compensationand negative press about executive overspending, corporate misconduct, poor contracting and unpopular rate hikes for homeownershave made it difficult to keep and hire talent.
For example, Citizens was recently looking to hire a new vice president of underwritingafter the previous one resigned during an investigation into 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 companys 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 companys 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 cant.
Board memberswho came under scrutiny last year for expensive dinners after board meetings--continue to operate without any official caps on travel and meal spending.