Deval Patrick says Liberty Mutual pay ‘breathtaking,’ but not his business
Governor Deval Patrick today labeled the multimillion-dollar pay given to former Liberty Mutual chief executive Edmund “Ted’’ Kelly and other top officials at the insurance company “breathtaking,’’ but the former corporate executive also declared he believes in capitalism and government should not intervene to control such large compensation packages.
“When it comes to a private company, those issues are between the employees, the board, the policyholders, and the like,’’ Patrick said during his monthly appearance on WTKK-FM, typically the venue for his most expansive comments on public issues.
While Liberty Mutual is a mutual company owned by its policyholders and regulated by the state insurance commissioner, Patrick said the government’s authority extends only to ensuring that the premiums charged are reasonable.
He also lauded Kelly, who he branded “a friend of mine,’’ for his work helping the Patrick administration expand competition in the auto insurance arena.
“He has been very helpful to us when we were working through how to do insurance reform – auto insurance reform – which has saved tens of millions of dollars here in the Commonwealth,’’ the governor said.
The Globe has reported that Kelly was paid an average of $50 million annually for the past past four years, nearly $24,000 an hour. The company’s top 10 executives received $68 million in compensation in 2010. The packages are approved by board members being paid $200,000 annually.
Liberty Mutual also maintains a fleet of five aircraft, estimated to be worth about $150 million, in a 30,000-square-foot hanger at Hanscom Field. Flight plans show they frequently flew between airports near Kelly’s homes.
Meanwhile, the insurer sought $46.5 million in city and state tax breaks to build its new headquarters in Boston.
The governor was not asked about the propriety of providing tax breaks to a company providing such large compensation packages and amenities, but he was asked if he was concerned about such high pay for a company owned not by more inquisitive investors and stockholders but more passive policyholders.
“It was breathtaking,’’ said Patrick.
“I guess I would say, I hope the board is paying as much attention to the bottom 10 as they are to the top 10,’’ he added.
But Patrick also said, “The insurance commissioner’s job, government’s role, is to make sure that the consumers are getting the very best in competitive deals. And as I say, managed (auto insurance) competition has saved a whole lot of money for a whole lot of people in the commonwealth in the last few years.’’
Patrick held the top corporate legal jobs at Texaco and Coca-Cola, and served as a corporate board member, before running for governor in 2006. He also has said he will not seek reelection when his term ends in January 2015, and that he is looking forward to returning to the higher pay of the corporate world.
Among his likely opportunities: leadership roles like Kelly’s, or seats on boards such as that which approved the former CEO’s pay.
“I’m a progressive Democrat; I’m a capitalist, too. And I do think there limits on what government can and should do,’’ said Patrick.
The governor also repeated his past irritation about being asked to comment on issues not directly related to his job.
“I am not the pundit-in-chief, so I don’t go popping off just because people want to know, or ask me what my opinion is,’’ he said.
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