ICBC CEO Jon Schubert resigning

[Energy]

VICTORIA – Insurance Corporation of British Columbia CEO Jon Schubert will step down this November the corporation announced Thursday after a government audit revealed runaway costs for senior management at the organization.

The audit determined that the number of people earning over $200,000 has increased by 315 per cent in just the last five years.

It also found the corporation has handed out lavish signing bonuses of up to $40,000, has handed out up to $18,500 in annual perks for senior managers and paid one manager $4,500 per month in temporary accommodation when moving.

“There has been a significant increase in both the number of management staff and also the compensation since 2007,” Finance Minister Kevin Falcon said Thursday, adding this covered the time of an unprecedented global economic meltdown.

“That is something – the combination of more people and higher wages – that is both unacceptable and something that is going to change, and change very quickly.”

Falcon added that despite the troubling findings, ICBC has kept rate increases low, at an average of about 0.8 per cent over the last 10 years.

“I am pleased that ICBC has done a good job in keeping rates for drivers down overall,” he said.

In response, ICBC announced Thursday it will get rid of almost 200 employees over the next two years, the majority of which will be managers.

It said it hopes to return operating costs to 2008 levels, which it said would save about $50 million by the end of 2013.

The corporation added that while Schubert will leave the corporation in November, he will continue to collect his full salary as a paid consultant until June 2013.

In 2011, Schubert made $486,541 in total compensation.

Read more: ICBC CEO Jon Schubert resigning

Rates have increased by a small amount but maybe after firing all those managers rates can actually decrease? Or is that just a dream?

[MR_BIGGS]

I get the argument that you need competitive wages to retain the best and brightest, but a 315 per cent increase in the number of people earning over $200,000 in just the last five years seems a bit surprising. I wonder if these positions were closed competitions for internal staff or if they were open...

[320icar]

so thats why everyones premiums went up 11% this year... hmm..

[Tapioca]

Management salaries are definitely a bit excessive, but they alone represent a small drop in the bucket.

I reckon that fraudulent injury claims are more to blame for rising premiums than the inflated salaries of a few managers.

[supafamous]

I can't do the math in my head but what does a 315% increase mean in actual headcount? What's ICBC's total headcount?

Knowing what people get paid in the higher ends of management in the private sector the figures may or may not be high. Granted, this is a public institution so you'd expect slightly lower salaries compared to private sector.

This sounds like it's just for show like when David Hahn at BC Ferries was forced out.

[Yodamaster]

Not a surprise that ICBC is full of crooks, hopefully the cut will bring the goods so to speak.

[GGnoRE]

This is why ICBC shouldn't have monopoly on basic insurance.
In the competitive free market, companies like this wouldn't be able to survive.

[Gridlock]

So this week we single out ICBC...last month it was BC Ferries, and BC Hydro before that.

Let's go out on a limb here, and say the following:

Crown Corporations in BC are heavily bloated in a sense of entitlement and overspending on salaries and everything in between.

Do I have any doubt that you could look through Pavco, liquor or any other crown corp and find the same thing? No.

All this at the same time that there has been a net zero mandate operating for all the people that are actually out there DOING the work.

Now, don't get me wrong, I'm no lover of unions, gov't unions especially, but at the same time we are padding the management level with positions and pay, we're sticking it at the bottom end citing "current economic decisions"

FUCK!

The first thing they do is cite "we need decent pay to attract talent". Great. Show me the companies that you are competing with, pay wise, because here's the real deal. I can think of companies that laid people off, froze salaries and even rolled salaries back in 2008 just to be able to weather the recession. It would be nice if someone in gov't was willing to do the same. Fuck, I'd like to see the MLAs take a little 10% slice off the top just to show solidarity with the current program. Hell...make it 5%. Even better, maybe buy your own fucking coffee Christy, and leave it off the province credit card.

How dare this party make me actually want to vote for the NDP?

[dark0821]

It doesnt surprise me one bit, if anything $48x,xxx/yr is less than what I expected.

As for insurance premiums, I would like to see the car ownership population over the last 10 years compared to the premium increases.

That aside, reducing spending is just going to go towards more fraudulent injury claims...
So I am pretty sure we are not going to see a premium reduction

/end rant

[Tapioca]

Originally Posted by GGnoRE

This is why ICBC shouldn't have monopoly on basic insurance.
In the competitive free market, companies like this wouldn't be able to survive.

Insurance companies are in the business of making money and not paying out claims. Be careful what you wish for (unless of course you're a perfect driver and you never ever get into accidents.)

ICBC sucks if you have more than 2-3 cars and over 10 years of accident-free driving, but you know what? At least you can pick up the phone to file a claim 7 days a week and claim centres are available all over the province.

[Tapioca]

Originally Posted by Gridlock

The first thing they do is cite "we need decent pay to attract talent". Great. Show me the companies that you are competing with, pay wise, because here's the real deal. I can think of companies that laid people off, froze salaries and even rolled salaries back in 2008 just to be able to weather the recession. It would be nice if someone in gov't was willing to do the same. Fuck, I'd like to see the MLAs take a little 10% slice off the top just to show solidarity with the current program. Hell...make it 5%. Even better, maybe buy your own fucking coffee Christy, and leave it off the province credit card.

How dare this party make me actually want to vote for the NDP?

Are any of these businesses and organizations that laid off workers, and cut salaries prominent businesses in the province? Do they appear in BC Business' Top 100 companies in the province? These businesses and organizations on such lists are what Crown corporations have to compete with. But, on the other hand, there's the view that Crown corporations are useless and they should all be gutted, privatized, or sold like BC Ferries and BC Rail. Oh wait a minute...

Speaking of MLAs, their compensation is quite reasonable in my opinion. MLAs make a base salary of just over $101K, while the premier tops out at just over $191K. Sure, you have your idiots who get elected only because of their party affiliation, but some of the brighter politicians could easily make 2-3 times in the private sector. You know what Vancouver City Councillors make? Around 60K. 50% of RS makes that money at the age of 25. Why would anyone leave a job with decent security for a job in which you're lucky to survive 1 term and you're subjected to constant abuse from members of the public and media?

[Meowjin]

The issue wasn't with the fact that ICBC employees people, its that they were audited and are laying off 200 managers.

Why the fuck does ICBC have that many managers to lay off?

[BaoTurbo]

^because they probably promoted some to managers themselves LOL

It's about fricken time there's some dirt on found by the government about ICBC. Maybe they'll lose their reputation or something even though theirs is already bad

[Meowjin]

http://www.fin.gov.bc.ca/ocg/ias/pdf...eview_2012.pdf

holy fucking shit. This is fucking silly!

The media sugar coated this

Prior to 2011, at least 90% of management received 100% or more
(from the 150% available) of the eligible bonus. For 2011, ICBC
adjusted their bonus structure, but still saw over 85% receive at
least 75% of their eligible bonus.

Bonus32  Review of the Insurance Corporation of British Columbia
Although ICBC introduced a financial trigger for the bonus plan
commencing in 2011, the target is unreasonably low. The trigger
requires ICBC to first achieve a corporate net income of $35 million
before allowing any bonus payments; ICBC has not had a net
income below $140M in any of the last five years

WHAT THE FUCK

[BaoTurbo]

Seriously this is why I don't like the idea about having a private owned automobile insurance company dominate a whole entire market for the province. It's like yes, there are benefits so that there's is at least some order in the insurance market, but this company is just asking for fraud sooner or later.

Unless the government controls and regulates and monitors this company extensively, it's going to be a greed trap in just a matter of time. And of course, someone to reveal them, but I mean even the government can create fraud or make some salary boosts and make it seem legit. I guess opening the insurance market might be a good thing about now or soon. Opinions?

[Energy]

Well a free and open market is usually better for consumers.

[supafamous]

Originally Posted by Energy

Well a free and open market is usually better for consumers.

The US health care market called and wants you to be a spokesperson. Seriously, sometimes it's better to be private, sometimes it's better to be public.

In this case I'm firmly in the "car insurance should be public" camp. Example reason: ICBC spends millions each year in upgrading intersections (left turn bays, better signaling etc) that no private insurance company has an incentive to spend on (witness most American cities - their road safety is rubbish compared to us). ICBC's investment in road safety reduces insurance costs for all of us.

With ICBC you get a lot of public sector inefficiencies but you also get a lot of public sector benefits. (My friend from Ottawa was stunned at how little I pay for car insurance - $900/yr for my TSX)

Re: Salaries - $100k/yr is not a lot of money. Middle managers make that kind of money in the private sector and you could easily argue that a MLA has at least a similar level of responsibility.

[Tapioca]

The insurance market is already half open - you just need to buy basic liability insurance from ICBC.

But, this thread needs someone to chime in about how Alberta under a fully private system has cheaper premiums. And I would like to know if these people receive the same level of service from their smaller, but cheaper insurer that ICBC provides.

[RE-Jo]

First of all, I don't work for ICBC and I don't like ICBC one bit, but the line

"The audit determined that the number of people earning over $200,000 has increased by 315 per cent in just the last five years."

Can be a bit misleading.
For example, "IF" 5 years ago, ICBC only had 1 person making over $200,000, now they have 4 people making over $200,000, that would mean a 300% increase. Plus, if those 3 people were making $199,999 5 years ago, you see how the newspaper can play with these numbers to stirr up some heat in the general public?

My point is, we need to see some actual numbers (i.e. how much money were the top 50 people making 5 years ago, and how much are they making now) before we all take our pitchforks and march to the nearest ICBC office.

[optiblue]

why does anyone at ICBC need to make over 200k... what do these guys do?

[RE-Jo]

^^^ Same can be said for a lot of companies :P

[Energy]

Originally Posted by supafamous

The US health care market called and wants you to be a spokesperson. Seriously, sometimes it's better to be private, sometimes it's better to be public.

I did say usually. US healthcare is another can of worms altogether.

[supafamous]

Originally Posted by Energy

I did say usually. US healthcare is another can of worms altogether.

Yeah, sorry. I should have been clearer that I was just joking.

[godwin]

Legal counsel? (you will get more than a few at ICBC) Privacy Officers? Basically all positions that require a law degree would pay that much. That's common among crown corporations eg Lottery etc etc.

I am not sure about sense of entitlement because lawyers in those fields are few, they can easily earn the same amount at other corporations.

Originally Posted by optiblue

why does anyone at ICBC need to make over 200k... what do these guys do?

[Zordon]

Originally Posted by 320icar

so thats why everyones premiums went up 11% this year... hmm..

I don't believe your premiums increase is a direct result of ICBC manager raises. There are more factors than that, for one, increase in claims. There are more drivers on the road resulting in more claims that require material damage payouts and bodily injury payouts. The second factor is more fraudulent claims that result in investigations, lawsuits, and waste of tax payer dollars.

The way I see it is, if you have a buddy who got in a fender bender, feels fine but has an ICBC claim and is now trying to get more money just cause. They are basically the ones who are putting stress on the system, raising our rates, and commiting fraud by lying about their extent of their injuries.

If ICBC was to increase raises rates for the pure purpose of increasing their salary, heads would roll left and right. I definitely think it's unfair that managers make so much more money compared to the unionized staff who are the front line workers keeping the company afloat. I also find it unfair that their bonuses and raises are not implemented to reduce premiums instead.

As some people have already said, ICBC puts tons of money into the community trying to improve streets, awareness, and overall safety. I agree that some ads may seem like a waste of money compared to other campaigns but they do try to put the money back where it belongs.

Being an ICBC employee and a tax payer, it sucks that our rates go up but what can you do? Everything around us, prices are going up (hydro, carbon tax, property tax, gas) and hopefully in the future our rates can be lowered as a result of a better economy and cost cutting measures.

**Disclaimer**
The contents of this post reflect the views of the author and do not necessarily reflect the official views or policy of ICBC.