CEO pay gap widens at most large US insurers in 2023

The gap between CEO and median employee compensation at most of the largest US insurers widened in 2023.

CEO-to-employee pay ratios at 14 of the 20 largest US-listed insurers by market capitalization increased on a year-over-year basis, according to an S&P Global Market Intelligence analysis. The median CEO pay ratio for the 20 insurers was up 6.6% year over year at 226 times the median employee compensation of $78,388.

Chubb Ltd. posted the largest CEO-to-employee pay ratio last year. CEO Evan Greenberg was paid 452 times the median employee compensation of $61,188, thanks in part to a 10% increase in his pay year over year. Chubb's position represents a shift in executive compensation that began in 2021, when several P&C and multiline insurers entered the previously managed care-dominated top six.

The CEO pay ratio at Chubb jumped significantly from 346 times the median employee pay in 2022 as the latter fell from $72,640, according to an analysis. The number of employees also grew during this period, rising from 34,000 in 2022 to 40,000 in 2023.

Chubb did not respond to a request for comment regarding the widening gap between the compensation received by Greenberg and a median employee.

The largest jump in executive compensation was seen at Markel Group Inc. CEO Thomas Gayner received 147 times as much as the median employee, an increase of 98.6% from 2022.

Among the 20 largest US-listed insurers, managed care providers featured prominently in terms of having the largest CEO-to-employee pay ratios. Elevance Health Inc. CEO Gail Boudreaux was paid 389 times the median employee compensation of $56,229, the second highest in the analysis, which coincided with a 4.6% year-over-year growth in Boudreaux's salary to $21.9 million.

Fellow managed care insurer UnitedHealth Group Inc. filled the third-place position, with CEO Andrew Witty receiving 352 times the median employee compensation of $66,821. Witty benefited from a 12.8% pay bump to finish 2023 as the highest-paid CEO among US-listed health insurers, receiving $23.5 million in total compensation.

Aflac Inc. had the fourth-largest pay gap, with CEO Dan Amos being paid 324 times the median employee compensation of $63,898.

The fifth-largest pay gap was at The Cigna Group, whose CEO David Cordani received compensation of $21.0 million in 2023, 280 times that of a median employee.

Movement at AIG

American International Group Inc.'s Peter Zaffino, the highest-paid CEO in a 2022 analysis of US-listed property and casualty or multiline insurers, had the sixth-largest pay gap.

Zaffino was paid 278 times the median employee compensation of $88,585, with a total compensation of at $24.6 million, a 67.3% decrease from $75.3 million in the prior year. The executive's compensation package consisted of $1.8 million in cash, $10.4 million in stock, $3.5 million in options and $9.0 million in nonequity incentive plan compensation.

The large change for AIG was influenced by Zaffino's 2022 compensation package, which was augmented by $62.4 million in stock grants that included $50 million in restricted stock as part of an employment agreement for Zaffino to remain CEO until 2027.

Insurers with smallest pay gaps

The narrowest pay gap of 2023 was seen at Berkshire Hathaway Inc., where CEO Warren Buffett received comparably small compensation of $413,595, five times the median employee figure. Press reports place Buffett's net worth at $147 billion.

Ajit Jain, the vice chair of insurance operations for Berkshire Hathaway, received approximately $20 million last year.

The second-smallest pay gap was at Arch Capital Group Ltd., where Marc Grandisson received $12.7 million in compensation, or 86 times that of the median employee. Arch Capital's median employee compensation of $147,294 was the highest in the analysis.