ICBC president Jon Schubert has said he will step down in November.

ICBC president Jon Schubert has said he will step down in November.

Spiralling pay for ICBC brass rapped

Cost-cutting reforms pledged at B.C.'s public auto insurer, president to resign

ICBC president Jon Schubert will step down and the public auto insurer is pledging reforms after a provincial audit found executive pay had soared far too high.

The finance ministry review found ICBC was “not aligned” with the province’s cost-containment priorities and recommended ICBC reduce the number of managers and their pay to levels more consistent with what existed in 2008.

“A culture of cost-containment and financial discipline has been lacking in recent years,” it said, adding expense policies were “generous.”

ICBC had 13 top managers paid more than $200,000 a year in 2007, but that had more than quadrupled to 54 by 2011.

The report also noted there are more than 1,291 other managers and employees earning $75,000 to $200,000 – up 52 per cent from 848 in that bracket in 2007.

Despite a 2011 policy change denying bonuses if ICBC profits fail to top $35 million, more than 85 per cent of management still got at least three-quarters of their eligible bonus that year.

The review said the profit target for allowing bonuses is “unreasonably low” because ICBC hasn’t earned less than $140 million in the past five years.

It also detailed signing bonuses of up to $40,000 to attract new staff and annual allowances for cars and other spending of about $17,000 for each senior executive.

ICBC responded by announcing a management pay freeze, a hiring freeze and said it will cut 135 management positions by 2014.

The corporation has a president, 10 senior vice-presidents who each oversee a division and 13 other vice-presidents.

ICBC also said it will cut its operating budget by $50 million by the end of next year.

Schubert will step down in November but work several more months as a paid consultant.

The changes came as the B.C. Utilities Commission gave final approval to an 11.2  per cent hike in basic insurance premiums that had been provisionally in effect since February.

ICBC says its six per cent cut in optional rates this year offsets most of the impact of the basic coverage increase, and overall auto insurance increases have averaged 0.8 per cent a year for the last decade.

It competes with private insurers on optional coverage but has a monopoly on basic rates.

BC Conservative leader John Cummins accused the Liberals of “profound managerial incompetence” in allowing ICBC executive pay to escalate unchecked for years.

Canadian Taxpayers Federation spokesman Jordan Bateman said a management wage freeze isn’t good enough and called for current managers to take a 15 per cent pay cut.

ICBC takes in more than $3.7 billion a year in insurance premiums and earns another $440 million from investment income.

The review makes little mention of the government’s controversial policy of withdrawing a “dividend” from the Crown corporation to help balance B.C.’s budget.

ICBC increased its reserves from $314 million in 2002 to $3.8 billion in 2010, after which the province ordered it to start handing over surplus cash from the optional side – $576 million in 2010 and $101 million in 2011.

Critics argue motorists should instead get the dividends – in the form of lower rates.

Just Posted

FVRD surveyed public opinion on cannabis production and processing in the electoral areas. Odour and distance from residential areas were the top concerns. (Black Press file)
Cannabis production and processing rules being drafted by Fraser Valley Regional District

Data from public opinion survey will be used to guide cannabis-related land use

Robert Nelson, 35, died after being stabbed at a homeless camp in Abbotsford on April 7 of this year.
Mom pleads for information about son’s killing at Abbotsford homeless camp

Robert Nelson, 35, described as ‘man who stood for justice, honour, respect’

Police arrest the suspect in an attempted armed bank robbery on June 2 at the Scotiabank at Gladwin Road and South Fraser Way in Abbotsford. (Photo by Garry Amyot)
Abbotsford bank robbery suspect who was stopped by customers faces more charges

Neil Simpson now faces total of eight charges, up from the initial two

poster
Drop-in Covid vaccine clinic in Mission June 17-18

Neighbourhood clinics complement appointment-based clinics currently operating in Mission

Logo
Canadian Blood Service is adding additional donor clinics in Mission

New Sunday clinics begin June 20, donors can register online

Canadian Prime Minister Justin Trudeau participates in a plenary session at the G7 Summit in Carbis Bay, England on Friday June 11, 2021. THE CANADIAN PRESS/Adrian Wyld
Canada donating 13M surplus COVID-19 vaccine doses to poor countries

Trudeau says the government will pay for 87 million shots to be distributed to poor countries

Montreal Canadiens goaltender Carey Price (31) is scored on by Vegas Golden Knights defenseman Alec Martinez, not pictured, during the second period in Game 1 of an NHL hockey Stanley Cup semifinal playoff series Monday, June 14, 2021, in Las Vegas. (AP Photo/John Locher)
Habs fall 4-1 to Vegas Golden Knights in Game 1 of NHL semifinal series

Match was Montreal’s first game outside of Canada in 2021

Kelowna-Lake Country MLA Norm Letnick, assistant deputy speaker at the B.C. legislature, presides over committee discussions. The legislature is completing its delayed spring session this week, with most MLAs participating by video conference. (Hansard TV)
B.C.’s daily COVID-19 infections dip below 100 over weekend

Only 68 new cases recorded Monday, four additional deaths

The BC Ferries website went down for a short while Monday morning following a provincial announcement that recreational travel between health authorities can resume Tuesday. (Black Press Media file photo)
BC Ferries’ website crashes in wake of provincial reopening announcement

Website back up now, recreational travel between health regions to resume as of Tuesday

The Kamloops Indian Residential School is photographed using a drone in Kamloops, B.C., Monday, June, 14, 2021. The remains of 215 children were discovered buried near the former school earlier this month. THE CANADIAN PRESS/Jonathan Hayward
Communities grapple with what to do with former residential and day schools

Some tear them down as a tool to help healing, others repurpose them as tools for moving forward

FILE – Provincial health officer Dr. Bonnie Henry talks about B.C.’s plan to restart the province during a press conference at Legislature in Victoria, Tuesday, May 25, 2021. THE CANADIAN PRESS/Chad Hipolito
B.C. watching U.K.’s COVID struggles but don’t think province will see similar pitfalls

Studies show that one dose of vaccine is only 33 per cent effective in preventing B.1.617.2 spread

RCMP Const. Shelby Patton is shown in this undated handout photo. RCMP say that Patton was hit by an allegedly stolen truck that he had pulled over on Saturday morning in Wolseley, east of Regina. THE CANADIAN PRESS/HO, RCMP
Pair charged in Saskatchewan Mountie’s death make first court appearance

Const. Shelby Patton was hit by an allegedly stolen truck that he had pulled over Saturday morning

David and Collet Stephan leave for a break during an appeal hearing in Calgary on Thursday, March 9, 2017. THE CANADIAN PRESS/Todd Korol
Appeal Court rejects stay for Alberta couple facing third trial in son’s death

Pair accused in their earlier trials of not seeking medical attention for their son sooner

Highway notices like this come down effective June 14. Public health restrictions on non-essential travel and commercial operation have hit local businesses in every corner of B.C. (B.C. government)
Province-wide travel back on in B.C.’s COVID-19 restart plan

Gathering changes include up to 50 people for outdoor events

Most Read