ICBC reforms management bonus system

Incentive payouts to be reduced if profit falls short at insurance corporation

ICBC reforms management bonus system

ICBC is tapping the brakes on its controversial system of paying out bonuses to management.

The incentive pay program – which saw $17 million handed out in 2010 – will be reduced or eliminated starting this year if the public auto insurer falls short of its annual profit targets.

The move was disclosed as ICBC comes under greater financial pressure and just weeks after it announced plans to raise basic auto insurance premiums 11 per cent, resulting in a net increase of $27 to most motorists after a partly offsetting cut to optional rates.

“We feel it’s quite a proactive step,” ICBC spokesman Adam Grossman said. “We’re creating a financial trigger that creates a stronger tie between our financial performance and our performance-related pay.”

The full bonus pay package will continue as it did last year if the corporation’s net income for 2011 is at least $217 million – 75 per cent of its 2011 profit target of $290 million.

Payouts will be reduced for the CEO, other executives and remaining management if net income is between $35 million and $217 million.

That’s the most likely scenario this year, since ICBC reported net income of just $52 million for the first nine months of 2011.

If net income levels are between zero and $35 million in this or future years, Grossman said, there will be no payouts for the CEO or other executives and payouts for remaining management will be significantly less.

Performance pay is scrapped altogether if ICBC records a net loss.

“We thought this was important,” Grossman said, citing volatile financial markets and an uncertain economy.

“It’s been a difficult financial year. We’re seeing increased pressure from bodily injury claims.”

Consumers Association of Canada president Bruce Cran takes little issue with the bonus pay system.

“I think they do a great job and they earn their bonuses,” he said.

The part of ICBC Cran wants reformed is the province’s directive that the corporation hand over about $145 million a year as an annual dividend to government.

“Making profits was never the intention of this corporation,” Cran said, adding that the BC Liberal government should allow ICBC to return all excess cash to motorists.

“They’ve virtually stolen our money,” he said.

The dividend to government fluctuates based on surplus capital from the optional side of ICBC’s business, Grossman said, adding it is also likely to be lower than in recent years.

Just Posted

Image by Free-Photos from Pixabay
Webinar looks at sexual abuse prevention among adolescents

Vancouver/Fraser Valley CoSA hosts free online session on June 15

Emergency services were on the scene of an apparent stabbing Friday afternoon (June 11) in the 2400 block of Countess Street in Abbotsford. (Photo: Kaytlin Harrison)
Two suspects arrested after apparent stabbing in Abbotsford

Incident occurs Friday afternoon in 2400 block of Countess Street

June is Brain Injury Awareness Month in Canada. (ADOBE STOCK IMAGE)
Shining a light on brain injury in Canada

June is Brain Injury Awareness Month

submitted
City of Mission hosting a virtual and in-person open house to explore Silverdale plan

It’s the first neighbourhood planning area of the larger Silverdale Comprehensive Planning Area

Hutch Hotels Ltd., which owned the former Alder Inn (which was demolished in November 2020), is among the defendants in a lawsuit related to an alleged impaired-driving crash in January 2017. The civil suit also names S & L Kitchen and Bar in Abbotsford. (Black Press file photo)
Two Fraser Valley bars named in lawsuit related to alleged impaired-driving crash

S & L Abbotsford and Alder Inn being sued by passenger in 2017 rollover collision

At an outdoor drive-in convocation ceremony, Mount Royal University bestows an honorary Doctor of Laws on Blackfoot Elder and residential school survivor Clarence Wolfleg in Calgary on Tuesday, June 8, 2021. THE CANADIAN PRESS/Jeff McIntosh
‘You didn’t get the best of me’: Residential school survivor gets honorary doctorate

Clarence Wolfleg receives honorary doctorate from Mount Royal University, the highest honour the school gives out

The Queen Victoria statue at the B.C. legislature was splattered with what looks like red paint on Friday. (Nicole Crescenzi/News Staff)
UPDATE: Queen Victoria statue at B.C. legislature vandalized Friday

Statue base splattered with what looks to be red paint, old-growth logging protest held in afternoon

Police cars are seen parked outside Vancouver Police Department headquarters on Saturday, January 9, 2021. THE CANADIAN PRESS/Darryl Dyck
Vancouver police officer charged with assault during an arrest in 2019

The service has released no other details about the allegations

Denmark’s Christian Eriksen receives medical attention after collapsing during the Euro 2020 soccer championship group B match between Denmark and Finland at Parken stadium in Copenhagen, Saturday, June 12, 2021. (AP Photo/Martin Meissner, Pool)
Denmark soccer player Christian Eriksen collapses during game against Finland

Eriksen was given chest compressions after collapsing on the field during a European Championship

Members of the Department of Fisheries and Oceans’ Marine Mammal Response Program rescued an adult humpback what that was entangled in commercial fishing gear in the waters off of Entrance Island on Thursday, June 10. (Photo courtesy Marine Mammal Response Program)
Rescuers free humpback ‘anchored’ down by prawn traps off Vancouver Island

Department of Fisheries and Oceans responders spend hours untangling whale

As stories of the horrors of residential schools circulate after the Tk’emlups te Secwepemc First Nation announced it had located what are believed to be the remains of 215 children, Grand Chief Stewart Phillip of the Union of B.C. Indian Chiefs said he feels a connection with the former students. THE CANADIAN PRESS/Darryl Dyck
2 sides of the same coin: Ex-foster kids identify with residential school survivors

Grand Chief Stewart Phillip says the child welfare system takes Indigenous children from their families

Nathan Watts, a member of the Tseshaht First Nation near Port Alberni, shares his story of substance use, a perspective he said isn’t seen enough. (Photo courtesy of Nathan Watts)
Public shaming, hate perpetuates further substance use: UVic researcher

Longtime addict Nathan Watts offers a user’s perspective on substance use

57-year-old Kathleen Richardson was discovered deceased in her home Wednesday, June 9, 2021. Her death is considered a homicide and connected to the slain brothers found on a Naramata forest road. (Submitted)
Condolences pour in for Kathy Richardson, Naramata’s 3rd homicide victim in recent weeks

Richardson was well liked in the community, a volunteer firefighter with a home-based salon

Most Read