A recent story in the Guardian reveals the statistics on how CEO pay at the largest US corporations has skyrocketed over the last few decades. The Guardian story says in 1965, CEO pay was 20 times that of workers. That would mean if a worker made $30,000.00 per year, the CEO would be making about $600,000.00. However, today CEO pay has risen to an average of 312 times that of the average worker. Therefore, if a worker is making $30,000.00, the CEO would be making $9,360,000.00.
The Guardian story gives a couple of specific examples, including the McDonald’s CEO making 3,101 times the average McDonald’s worker and the Wal-Mart CEO making 1,188 times the average Wal-Mart worker. These numbers are shocking, but it goes further. The CEO’s of the top 350 companies earn 5.5 times the amount earned by the average earner in the top one-tenth of one percent of earners.
Putting aside the politics of these statistics, it makes one wonder: have CEO’s gotten this much better since 1965?
I believe this phenomenon is directly relevant to the way in which big companies treat their customers, and this includes the way insurance companies treat their policyholders. When the people at the top of a company stand to become mega-wealthy if the company is more and more profitable, then those people (who are the ultimate decision makers on company direction and culture) will seek company profits at all costs.
To be sure, insurance companies are in business to make money. And the insurance industry, in theory, serves an important societal purpose. But if the insurance industry is nothing more than a profit-at-all costs behemoth, and the industry’s duty of good faith and fair dealing to its policyholders/customers is subjugated to the chase of the almighty dollar, the important societal purpose served by the insurance industry goes unfulfilled. Insurance company CEO’s are making millions and millions of dollars every year, much of it in profit-based bonuses, stock options, etc. Are insurance companies keeping their mission of providing security and peace of mind to their policyholders at the top of their priority lists?