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FLASH REPORT!

WCIRB Kept Salaries Secret From Legislature and Board

The fact that five executives at the Workers Compensation Insurance Rating Bureau of California are receiving some $1.7M in salaries – some 6% of the total annual budget, and more than 11% of the organization’s total salaries is shocking to some.  So is the $500,000 that President Bob Mike receives. But even more shocking are these facts: WCIRB has refused to release the salary information to the Legislature, and the public members of the governing board have been kept unaware of these “extravagant” executive salaries.

The revelation that Workers’ Compensation Insurance Rating Bureau president Bob Mike is making nearly a $500,000 annual salary and the other four executives are receiving nearly $1.2M between them, is getting more than an eye-opening response from legislative staff, stakeholders, employers and lobbyists.

Add to those saleries, expensive food and pricey bottles of wine put on expense accounts, plus other perks and there is the beginning of some questions that may need to be asked.

The WCIRB’s budget is funded directly by the employers of California who pay workers’ comp premiums to carriers, Mike once explained in testimony to the Legislature.

The executive salaries were hidden by inclusion with other staff salaries in the WCIRB’s annual report which showed just under $15M in salaries in total for 200 employees.  A little math indicates that those five executives receive 11% of the aggregate salaries.

Workers’ Comp Executive obtained and revealed the outgoing president’s salary and the pay of the other WCIRB executives in a Flash Report (see WCIRB Sets Up Inside Job… ) yesterday.   Such a high salary for a position like this is quite a stunner, some say. 

Most people had no idea Mike and the other executives are making so much. “Wow,” says one legislative  staffer, adding that this is information that would definitely interest his boss. “It just kind of drives us up the wall.”

Other legislative staff say they wanted to withhold comment, until they speak with their members.

Yet other staffers tell Workers’ Comp Executive that when they inquired about salary information they were told by the WCIRB that it “is proprietary.” This is not the first time WCIRB executives have been shown to be hiding information. WCIRB executives have a proven history of excluding public members from important information and deliberations ( Workers’ Comp Executive exposed that in practice the Bureau Disciplines but Doesn’t Disclose…). In addition, last year the WCIRB filed a report with the Legislature saying the industry lost some $1.5B dollars. A study by Compline, a sister company of Workers’ Comp Executive, found that in reality the industry made profits of some $600M. Read Compline’s testimony before the Insurance Commissioner’s workers’ comp rate hearing here: ( http://compline.org/Compline-Reports-Rate-Hearing-10-12-2010.pdf). 

Looks Like City of Bell Scandal

“It’s pretty shocking,” says Barry Hinden, president of the California Applicants’ Attorneys Association.

He adds that with all the stories surrounding the lucrative payouts in the City of Bell, salaries are coming under a lot more scrutiny. “Obviously, they don’t pay me enough as CAAA president,” he adds jokingly.

Angie Wei, a former public member of the WCIRB’s Governing Committee and acting chief of staff and legislative director for the California Labor Federation, expressed “amazement” at the salary revelation having just read the story.  She says she forwarded it on to the other public members.  “We’re still looking at it,” say says.

Mitch Seaman, a legislative advocate for the Labor Federation, currently represents labor on the Bureau’s governing committee.

Bruce Wick, an employer public member who sits on the Bureau’s governing committee, says he plans to meet with Department of Insurance Senior Staff Counsel Chris Citko before the next governing committee meeting to discuss what Commissioner Jones considers reasonable regarding the position. He also wants to find out if there is anything else the public members should know.

 “I’d like to see what the commissioner thinks,” Wick says. Of the salary he said “That’s not an area we get into.” 

The WCIRB did not return calls asking for further information and comment.

The Department of Insurance had no official comment.  Department staff was not available to talk to Workers’ Comp Executive.  “You’re asking us to comment on something we have no control over.  It’s their deal not our deal,” says one Department source familiar with the WCIRB. 

But it is the California Department’s responsibility to oversee and regulate the WCIRB, which performs many governmental functions, even issuing the occasional fine to a carrier, on the Department’s behalf.

And as for the public members, two questions remain:  What shouldn’t they know, what do they have the responsibility not to know? And how can the WCIRB executives – many of whom are lawyers – find ways to interpret the Insurance Code to hide some – to hide any – information from duly appointed governing board members?

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