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CEO’s salary soared as Citizens shed homeowners insurance policies

Barry Gilway, (center left in gray suit) the CEO of Citizens Property Insurance, listens to a speaker at a public hearing about Citizens rate increases, at the Miami Dade College Wolfson Campus,Thursday, September 20, 2012.
Barry Gilway, (center left in gray suit) the CEO of Citizens Property Insurance, listens to a speaker at a public hearing about Citizens rate increases, at the Miami Dade College Wolfson Campus,Thursday, September 20, 2012. Miami Herald file photo

Even as Florida’s state-run property insurer shed hundreds of thousands of policies in recent years, its chief executive’s pay soared to $550,000, more than four times as much as the governor’s salary.

Barry Gilway, CEO of Citizens Property Insurance Corp., says he earns a lot less money than private insurance executives with similar responsibilities.

“It just seems like Citizens is not being a very good steward of our public funds whatsoever,” said Sen. Gary Farmer, D-Lighthouse Point, a member of the Senate Banking & Insurance Committee and a trial attorney who has clashed with Citizens in the courtroom in addition to the Capitol.

Gilway also has an unusual employment agreement in which one man, a political appointee who chairs Citizens’ volunteer board, sets his salary with no public discussion or vote.

“The fact that this is done behind closed doors is ridiculous. It’s an affront to the Sunshine Law,” said Rep. Evan Jenne, D-Dania Beach.

Gilway had more than four decades of experience as a senior insurance executive when he joined Citizens in June 2012 at a base salary of $350,000 that included a 25 percent bonus incentive program and other perks. His pay was $550,000 in 2015, meaning it rose by nearly 60 percent in three years.

Gilway noted he has not had a pay raise in two years.

Gilway emphasized that his original salary also included built-in annual pay raises of 5 percent and a potential 25 percent bonus increase that he’s no longer eligible to receive as an at-will employee.

The governor’s salary, set by the Legislature, is $130,273 a year. Gov. Rick Scott has not taken any salary since he was elected in 2010.

In Clearwater Tuesday, Scott did not directly say whether Gilway’s salary is excessive.

“That’s a decision by the board,” Scott said. “What’s been my focus with regard to Citizens is to make sure they’re financially stable but also to make sure they’re the insurance company of last resort.”

Created in 2002, Citizens is Florida’s state-run insurer for home and business owners who can’t get coverage in the private market. It’s a government program financed by the premiums of nearly 500,000 policyholders, down from a peak of about 1.5 million.

Citizens currently writes the second highest number of residential policies in Florida, behind private insurer Universal Property and Casualty Co.

Nearly half of those policies are in the state’s two most populous counties of Miami-Dade and Broward, where rates are rising in large part because of a steep increase in lawsuits arising out of water damage claims.

Gilway last year became an at-will employee of Citizens, with no job security, and he also forfeited perks that included cash bonuses and an apartment in Tallahassee.

In an email Gilway sent to Citizens board chairman Chris Gardner on March 1, 2016, he wrote: “As discussed, the benefit would be we would not have to go to the board in March to vote on an extension of my contract that would provide unnecessary visibility to my current employment agreement.”

Gilway said he proposed that change in his employment status after consultations with Citizens’ counsel, and that he did not feel comfortable publicly negotiating for perks that weren’t also available to senior staff members.

Farmer noted that the Legislature is finalizing a budget that is expected to include a $1,400 raise for state workers earning less than $40,000 a year, their first across-the-board raises in more than a decade.

“None of them make over half a million dollars,” Farmer said, referring to Gilway. “He’s better compensated than anybody in state government.”

By comparison, the Senate has decided that the secretary of the Department of Transportation, who oversees a $10 billion road building effort, is underpaid at $136,000 a year. A Senate bill would raise the DOT secretary’s salary to at least $180,000.

Gilway has received praise from Scott and the three Cabinet members who oversee Citizens, including for prompt handling of claims following two major storms last fall.

Gilway is not Citizens’ only highly salaried employee.

Three of his senior assistants each earn $300,000 or more a year and 14 others each earn more than $200,000, according to a salary list of high-level employees marked “confidential” and obtained by the Herald/Times.

Citizens’ chief of underwriting services, Steve Bitar, and chief financial officer Jennifer Montero are each paid about $336,000 a year, and Kelly Booten, chief of systems and operations, earns $300,000, according to the February 2017 document.

Gilway said that when he arrived at Citizens five years ago, the insurer was struggling with a high staff turnover rate. A study by KPMG recommended significant salary increases as a way to retain top employees, he said.

Gilway said Citizens’ staffers are not state employees, so they can’t join the state retirement system. He said all are earning “below market compensation” compared to what similar people earn for private insurance companies.

“If we’re going to provide a level of service that Floridians demand and deserve in the market, I’ve got to compensate my people at an appropriate level to maintain a professional staff,” Gilway said.

He said three independent firms evaluate salary ranges for all positions.

Gilway said all employee salary information has been shared with Scott and Cabinet members.

Citizens is not a state agency and its sole source of money is from insurance premiums paid by policyholders .

It’s a public-private entity run by a board of nine political appointees.

Citizens spokesman Michael Peltier said the agency has a surplus of $7.4 billion, enough money to weather a catastrophic hurricane.

Peltier also rejected the idea that the salaries of Gilway or his senior staff members are in any way responsible for premium increases.

Peltier said that at the start of 2016, Citizens’ total salaries and benefits represented 6.5 percent of premiums collected.

Losses from water claims, including a dramatic surge in lawsuits, account for about 46 percent of every premium dollar collected statewide. In Miami-Dade, where such cases have increased dramatically, they account for 74 cents of every premium dollar collected, the agency said.

Contact Steve Bousquet at bousquet@tampabay.com and follow @stevebousquet.

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