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.

Surrey North Delta Leader

Just Posted

Surrey Fire Service battled a dock fire along the Fraser River late Friday night (June 18). It was on Musqueam Drive, near Industrial Road, around 10:45 p.m. (Photo: Shane MacKichan)
Fire engulfs pier on Surrey side of the Fraser River

Dock has reportedly been unused for a long time

Launched in January, Uplift Canada was founded by Tsawwassen resident Maggie Larocque. (submitted photo)
Surrey shelters get clothing collected June 26 by Uplift Canada

Book a pickup on website of the new non-profit, founded by Delta resident

A small pod of Pacific white-sided dolphins pass by close to shore in Campbell River June 16, 2021. Still capture from video courtesy of Kimberly Hart
VIDEO: Dolphin sunset captured from Vancouver Island shore

Spectacular setting for view of travelling pod of Pacific white-sided dolphins

Kalyn Head, seen here on June 4, 2021, will be running 100 kilometres for her “birthday marathon” fundraiser on July 23. (Jenna Hauck/ Chilliwack Progress)
Woman’s 100-km birthday marathon from Chilliwack to Abbotsford will benefit Special Olympics B.C.

Kalyn Head hopes run raises awareness, advocates for inclusion of people with intellectual disabilities

Bruce Springsteen performs at the 13th annual Stand Up For Heroes benefit concert in support of the Bob Woodruff Foundation in New York on Nov. 4, 2019. (Greg Allen/Invision/AP)
Canadians who got AstraZeneca shot can now see ‘Springsteen on Broadway’

B.C. mayor David Screech who received his second AstraZeneca dose last week can now attend the show

New research suggests wolves can be steered away from the endangered caribou herds they prey on by making the man-made trails they use to hunt harder to move along. THE CANADIAN PRESS/Nathan Denette
Culling cutlines, not B.C. wolves, key to preserving caribou herds: researcher

The government has turned to killing hundreds of wolves in an effort to keep caribou around

Gary Abbott (left) and Louis De Jaeger were two of the organizers for the 2014 Spirit of the People Powwow in Chilliwack. Monday, June 21, 2021 is Indigenous Peoples Day. (Jenna Hauck/ Chilliwack Progress file)
Unofficial holidays: Here’s what people are celebrating for the week of June 20 to 26

Indigenous Peoples Day, Take Your Dog to Work Day, Onion Rings Day all coming up this week

Gwen Spencer Hethey with her uncle and mentor Major Frederick Richardson. (Courtesy of Greater Victoria Sports Hall of Fame)
‘She was a killer’: The B.C. woman who pioneered female sharpshooting

Gwen Spencer Hethey made military men ‘look like turkeys’ says her son

Central Okanagan Grade 12 grads are set to get $500 each after a more than $1 million donation from a Kelowna couple. (File photo)
B.C. couple donating $500 to every Grade 12 student in the Okanagan

Anonymous donors identified as Kelowna entrepreneurs Lance and Tammy Torgerson

Rita Coolidge played the main stage at Vancouver Island Musicfest in 2017. (Black Press file photo)
This year’s Vancouver Island MusicFest to virtually showcase beauty of Comox Valley

Returning July 9 through 11 with more than 25 hours of music performances

Most Read