Insurance Commissioner Jim Donelon on Friday rejected a $50,000 raise for the head of the state’s property insurer of last resort, saying it’s not the right time for a pay increase.
The board of Louisiana Citizens Property Insurance Corp. voted Thursday to raise Chief Executive Officer Richard Robertson’s pay from $240,000 to $290,000 a year.
Donelon said he will tell the board to rescind that decision at Citizen’s next regularly scheduled meeting.
“I don’t do that because I don’t think he’s deserving of it. In fact, I think he is deserving of it,” Donelon said.
Robertson’s pay falls in the lower-middle range of pay for the heads of other state-run property insurers, Donelon said.
“But the timing in light of our state employees not having gotten a raise in three years, now is just not the right time,” Donelon said.
Donelon said two of Robertson’s subordinates, Chief Information Officer Dan Laffey and Chief Financial Officer Steve Cottrell, are paid more than their boss.
Laffey is paid about $246,000 a year, and Cottrell about $243,000, Donelon said.
State Treasurer John Kennedy, who left Thursday’s meeting before the pay raise was added to the agenda, applauded Donelon’s action.
“Jim is doing the right thing here,” Kennedy said Friday in a prepared statement. “This was a huge mistake by the Citizens Insurance board and I’m very glad he’s corrected it.”
Kennedy had criticized the raise and called on Donelon to veto the board’s action.
Earlier in the meeting, the board learned Citizens had $56 million more in liabilities than assets.
Citizens’ problems come from $165 million to settle two class-action lawsuits involving policyholder complaints from hurricanes Katrina and Rita, and the payment of up to $75 million in Hurricane Isaac claims.
Citizens board members had to vote to add the pay raise to the agenda and unanimously praised Robertson’s work during the board meeting Thursday.
At the time, board member Eugene Montgomery, who offered the motion to add the pay issue, said the timing was bad, but the raise would still leave Robertson at a lower salary than his peers in similar-sized companies.
Board member Eric Berger said the reality is that Citizens has to pay the going rate to keep good talent.