For the company’s execs, that has meant large pay raises, luxury hotel stays, international plane tickets, limousine rides and wine-fueled dinners — all paid with the corporate credit card.
A Citizens spokesperson said the company’s expenses are not responsible for pushing up rates, but did not elaborate.
Gilway, who earns $350,000, announced $2.1 million in salary increases for employees shortly after taking the reins of the company last year. (He also raised employee healthcare contributions. Company executives previously did not have to contribute to their healthcare premiums.) Gilway said Citizens needed to raise salaries to remain competitive with the private market, where he had worked for four decades.
Aside from the $2.1 million in 3 percent merit raises, Gilway rewarded his top execs with raises in excess of 10 percent. Doling out more than $150,000 to Citizens’ top brass was one of Gilway’s first decisions after taking over the state-run insurer of 1.4 million last summer.
Struggling homeowners and government watchdogs see the expenditures and worry that the company has been mismanaging its surplus during the seven years of hurricane-free seasons.
From booze-filled company outings to $2.5 million Citizens accidentally gave to another company, there’s growing evidence that those years have been marred by waste and profligacy.
Now, let’s eat
The sun was beginning to set after a company meeting in Orlando last June, and Citizens’ board had just chosen to appoint Gilway as its new president. He secured the gig after answering a number of pointed questions from the board, including how he would shrink Citizens. His answer: Raise rates.
“The attraction has to be rates and getting them at an appropriate level so that we can attract private industry,” he said.
Satisfied with that answer, the board hired Gilway, ended the meeting and then set about making dinner plans.
The spot: Ocean Prime, an upscale seafood and steak restaurant that boasts “an award-winning wine list.”
The tab: $918.34 for seven or eight officials, who dined on gourmet fare and gulped down $369 worth of Grey Goose vodka and red wine. Board Chairman Carlos Lacasa later reimbursed the company for most of the alcohol.
Although two or three of the executives had rented cars for the board meeting, the company paid $160 for car service to chauffeur them to the restaurant and back.
State law caps the amount of money government employees can spend on food and travel, and discourages government employees from expensing the purchase of alcohol.
Not Citizens executives. They have stated that those rules do not apply to the state-run company, ignoring auditors who said the company should comply with government spending limits.
Operating in a legal gray-area, Citizens’ employees have taken advantage of the company’s loosely written travel policy and its prevalence of corporate credit cards. Some of the executives who were most liberal with corporate credit cards were rewarded with hefty pay hikes after news of the spending issues broke.
The company spent more than $1.3 million on travel and meals in the first eight months of 2012. Citizens offered explanations for some of the spending on Friday, saying execs were operating under company policy. The company recently moved to crack down on travel expenses, implementing stricter new policies.