The sales talk against stock insurance companies has always been, "those companies have shareholders to satisfy, profit goes to shareholders but in a mutual the profit goes to policy holders." Truth but is it only in theory. Shareholders at stock companies can and do punish the stock price if a stock company is doing egregious stuff. History shows a lack of policyholder involvement in getting involved when they (policy holders) are sent something that requires a vote.
Is mutual profit compared to non-profits? Anyone in the know understands that non-profit doesn't mean that the non-profit isn't making some large sums of money. They just have IRS rules that demand no profits shown at the end of the year. (Wife once worked for one of the big 8 CPA firms). Still like the CPA joke, "what does 2 plus 2 equal" --- CPA answer "what do you want it to equal."
So without any regulations, without shareholder punishment, is a mutual still what it professes to be, for the benefit of policyholders?
"Lawmakers target big pay deals at mutual companies
Shocked that Liberty Mutual paid its former chief executive roughly $50 million a year, three Massachusetts senators have proposed budget amendments to discourage other mutual companies from awarding outsized pay packages in the future.
Senator Senator Brian A. Joyce, Democrat of Milton, would require mutual companies, both insurers and banks, to publicly disclose compensation for top executives, just as publicly traded companies are required to do. Senator Mark C. Montigny, a New Bedford Democrat, would give policyholders at mutual insurers a chance to vote on executive compensation, similar to the “say on pay” votes by stockholders of public companies, which was mandated by the Dodd-Frank financial overhaul bill.
Mutual insurance companies and banks are collectively owned for the benefit of their policyholders and depositors. While the Securities and Exchange Commission is explicitly charged with protecting shareholders in publicly traded companies, there is no similar agency to protect the ownership interests of policyholders or depositors.
Concerns about oversight of mutual companies were spurred earlier this year when the Globe reported that former Liberty Mutual Holding Co. chief executive Edmund F. “Ted” Kelly collected roughly $200 million in his last four years as chief executive. Kelly stepped down as CEO in June 2011, but still serves as chairman of the board of directors.
The Boston mutual insurance giant said the pay was inflated because Kelly cashed in performance incentives that he collected over nearly two decades with the company."
- See more at: Lawmakers target big pay deals at mutual companies - The Boston Globe
Is mutual profit compared to non-profits? Anyone in the know understands that non-profit doesn't mean that the non-profit isn't making some large sums of money. They just have IRS rules that demand no profits shown at the end of the year. (Wife once worked for one of the big 8 CPA firms). Still like the CPA joke, "what does 2 plus 2 equal" --- CPA answer "what do you want it to equal."
So without any regulations, without shareholder punishment, is a mutual still what it professes to be, for the benefit of policyholders?
"Lawmakers target big pay deals at mutual companies
Shocked that Liberty Mutual paid its former chief executive roughly $50 million a year, three Massachusetts senators have proposed budget amendments to discourage other mutual companies from awarding outsized pay packages in the future.
Senator Senator Brian A. Joyce, Democrat of Milton, would require mutual companies, both insurers and banks, to publicly disclose compensation for top executives, just as publicly traded companies are required to do. Senator Mark C. Montigny, a New Bedford Democrat, would give policyholders at mutual insurers a chance to vote on executive compensation, similar to the “say on pay” votes by stockholders of public companies, which was mandated by the Dodd-Frank financial overhaul bill.
Mutual insurance companies and banks are collectively owned for the benefit of their policyholders and depositors. While the Securities and Exchange Commission is explicitly charged with protecting shareholders in publicly traded companies, there is no similar agency to protect the ownership interests of policyholders or depositors.
Concerns about oversight of mutual companies were spurred earlier this year when the Globe reported that former Liberty Mutual Holding Co. chief executive Edmund F. “Ted” Kelly collected roughly $200 million in his last four years as chief executive. Kelly stepped down as CEO in June 2011, but still serves as chairman of the board of directors.
The Boston mutual insurance giant said the pay was inflated because Kelly cashed in performance incentives that he collected over nearly two decades with the company."
- See more at: Lawmakers target big pay deals at mutual companies - The Boston Globe