Insurance Commissioner Jim Donelon will reject a $50,000 pay increase for Louisiana Citizens Property Insurance Corp. CEO Richard Robert that was authorized by the board of the state-run insurer of last resort on Thursday. Though Donelon said Robertson had done an "exemplary" job in his three years at the company, he argued now is not the time for a pay increase.
Board members will be asked to vote again on the issue at their next meeting, he said.
"Is he deserving, the answer clearly is yes," Donelon said. "Is now the right time? The answer I come to there, in collaboration with board members who were not there, is no."
Citizens' board members approved increasing Robertson's pay from $240,000 to $290,000 late in a five-hour meeting Thursday. Earlier in the meeting, the board had been told that the insurer was $56 million in the red and approved a 45-percent increase to its rates for commercial customers.
The pay issue was not on the agenda printed prior to the meeting and the issue came up after both Donelon's representative on the board and state Treasurer John Kennedy had left the meeting.
Kennedy's representative to the board, James Napper, was the only one to oppose the pay increase.
Donelon said it wasn't appropriate to increase his salary now, particularly since state employees have not gotten a raise in three years. However, he praised Robertson's work with Citizens and said he took it from "a dysfunctional entity to an exemplary company."
In addition, Donelon noted that Robertson is currently paid less than many chief executives of similar companies and makes less than two of his employees. The company's Chief Financial Officer, Steve Cottrell, is paid $244,000 and Chief Information Officer Dan Laffy is paid $246,000.
The board members who decided to take up the pay increase were not trying to do anything underhanded or keep the issue from becoming public, Donelon said.
"I think they wish it had been on the agenda as of today," he said.
Kennedy, who blasted the pay increase as a "Great Dane-sized whiz on the legs of taxpayers and policyholders" Thursday, praised Donelon's decision.
"Jim is doing the right thing here," Kennedy said in an emailed statement Friday. "This was a huge mistake by the Citizens Insurance board and I'm very glad he's corrected it."
The issue of Robertson's pay may not be entirely off the table.
Donelon said he would ask the board to take up the issue again at their next meeting so that board members who were absent, including members of the Legislature, could vote on the issue. Asked what he would do if the board voted again for a pay increase, Donelon said, "I'll cross that bridge when I come to it."