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However, with more than 95% of their as reported total compensation made up of stock awards, their presence near the very top of this ranking could be short-lived.
With total pay around the $20mn mark, Wininger and Schreiber were paid comparable amounts to executives who have been perennial fixtures in the top 10 of this publication’s annual rankings – the likes of Marsh McLennan’s Dan Glaser, AIG’s Peter Zaffino and Chubb’s Evan Greenberg.
At more than $40mn in annual compensation, however, Metromile’s Preston is way out in front for 2021.
The company, whose planned merger with fellow InsurTech Lemonade is now expected to close in Q3 2022, granted Preston time- and performance-restricted stock units worth $40.6mn during the year on top of a base salary of just $439k.
Preston also received an award of stock options worth $2.5mn in 2021, with his total as-reported compensation of $43.6mn making him comfortably the highest-paid executive in the P&C insurance industry last year.
While such grants of equity often come with vesting conditions attached and are not fully “earned” for a number of years, US companies report their full value at the date they are granted within their disclosures of annual executive pay to the SEC.
For consistency, in this year’s Insurance Insider rankings the single figures for total executive pay reported by European and UK companies and collated by this publication have been adjusted to align with this approach to equity-based compensation.
Today’s piece – laying out the overall rankings for 2021 – is the first in a three-part series exploring the data on how the industry’s biggest names were compensated last year.
Ranked second on the list is former Root chief technology officer Anirban Kundu. Kundu was awarded equity instruments with a reported grant-date value of $23.1mn upon his appointment in June 2021, but these units were forfeited when he resigned in October.
(Throughout, listed roles for each executive are applicable to the 2021 financial year, and do not reflect any changes since 1 January.)
Lemonade co-CEOs Wininger and Schreiber were the other InsurTech executives to make the 2021 top 10, having each been granted tranches of 600,000 stock options in April worth $21.0mn.
However, it is worth noting that Lemonade’s share price has dropped considerably since these options were awarded – highlighting the inherent risk assumed by executives whose compensation plans are heavily skewed towards equity.
On 21 April 2021 – the date on which the stock options were granted to Schreiber and Wininger – the InsurTech’s closing share price was $89.75. By market close on 7 July 2022, it had fallen to just $22.07 – a loss of three-quarters of the value of the company’s underlying equity in less than 15 months.
Regardless, each one of the executives in this year’s top 10 – all of whom were based in the US – were compensated more in equity than in cash.
Rounding out the list were carrier CEOs Evan Greenberg (Chubb), Peter Zaffino (AIG) and Alan Schnitzer (Travelers), along with the leaders of the "big three" brokers: Dan Glaser (Marsh McLennan), John Haley (WTW) and Greg Case (Aon).
Total annual pay for these six established industry figures ranged from $20mn to $23mn in 2021, and all received at least 60% of their compensation in equity according to the filings collated by S&P.
This trend was consistent with the ratio of cash to non-cash compensation paid to executives at North American insurers and brokers throughout the top 100 of this year’s rankings. The 92 US- or Canada-based executives who made this list received just 45% of their combined 2021 pay of $933mn in cash.
Marsh’s Glaser best-remunerated broker
Focusing specifically on executives at listed North American brokers, Glaser, Haley and Case are trailed by Aon CFO Christa Davies (annual reported pay of $15mn) and Pat Gallagher ($14mn) in the top five.
A number of Ryan Specialty employees were also among the 10 best-paid executives in this category. During its first year in the public markets, the company reported total compensation of $13.8mn for CFO Dianne Aigotti (who retired during the year), $10.2mn for her replacement Jeremiah Bickham and $9.3mn for General Counsel Mark Katz.
Marsh CEO John Doyle ($9.4mn) and Brown & Brown CEO J. Powell Brown ($9.2mn) round out the broker top 10.
Greenberg tops list of executives North American carriers
At carriers based in the US and Canada, Allstate CEO Tom Wilson ($19.1mn) and Berkshire Hathaway’s insurance chief Ajit Jain ($19.0mn) followed close behind Schnitzer ($19.9mn).
Jain’s counterpart overseeing non-insurance operations Greg Abel received equivalent compensation, with both men paid 100% in cash.
Making up the rest of the top 10 are CEOs Chris Swift (The Hartford), Charles Brindamour (Intact) and Tricia Griffith (Progressive), as well as former AIG chief investment officer Douglas Dachille.
Shares make Generali’s Donnet highest paid in Europe
Generali group CEO Philippe Donnet was the highest-paid executive on the other side of the Atlantic in 2021 – and one of six executives from continental European carriers who made the overall top 100.
(Information on non-cash compensation comparable to that disclosed by American firms was not disclosed by a number of large European insurers – Mapfre and Zurich, as well as London-listed Randall & Quilter – and so their executives have been excluded from this year’s analysis.)
On top of his basic remuneration, Donnet has received considerable sums in Generali equity in each of the last two years. He was awarded almost $12mn worth of shares in 2020, and over $4mn in 2021.
Allianz CEO Oliver Bäte, Swiss Re CEO and Christian Mumenthaler and Axa CEO Thomas Buberl follow the Generali leader on the list, with Allianz management board member Klaus-Peter Röhler also making the top five in this category.
Despite having no stock option plans or similar schemes in place for their executives, a number of Munich Re leaders make the top 10: management board member Markus Riess – who oversees the group’s primary insurance business – and CEO Joachim Wenning.
Instead of option plans, Munich Re imposes a shareholding obligation on their management board which requires executives to hold shares equal in value to their annual basic remuneration for the duration of their board membership.
Among executives at UK-listed carriers, only Aviva CEO Amanda Blanc and Lancashire CEO Alex Maloney made the overall top 100 of Insurance Insider’s rankings this year.
On top of basic compensation of approximately $2.5mn, Blanc was awarded equity in Aviva worth $4.6mn during 2021 – while Maloney was awarded non-cash compensation worth $3.2mn.
Former CEO of Hiscox Bronek Masojada ranked third in this category after being awarded equity worth $2.2mn during his final year in charge of the carrier.
His colleagues Joanne Musselle and Aki Hussain – the latter of which has now replaced Masojada as CEO – also made the UK top 10, while Conduit Re CEO Trevor Carvey also qualified during his company’s first full year listed on the London Stock Exchange.
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