After all these years of living the life of luxury, Ed Rust, CEO of State Farm Insurance Co., will now be lucky to eat at McDonald's. According to a recent story in the St Petersburg Times, State Farm, the largest property and auto insurer in Florida, posted a $777 million profit in 2009. I know this sounds like good news for any State Farm board members but it was devastating news for Rust.
His compensation was negatively affected by the financial results of 2008 so in 2009 he made $9.4 million, down from $13.7 million in 2008. Yes, sad to say, he lost over $4 million in pay. And you thought you were having a rough time trying to make ends meet with your family.
Here's a man used to living a high life-style and now he may not be able to afford another jet this year or that house he was eye-balling on the coast of France. He has to feel the embarrassment and the snickering behind his back as he has to drive his own cart as he starts 9-holes at St Andrews.
The company has been fighting with the state of Florida, among others, trying to increase their rates and dropping homeowner policies. Their Florida unit struck a deal with regulators to raise its homeowners insurance revenue as a condition for not pulling out of the state. The company, which is dropping 125,000 homeowners policies statewide, received approval to raise rates for its remaining homeowners 14.8 percent.
Plus, it has filed for an average 9.2 percent rate hike for its 2.7 million auto policies in Florida.
So.... who's your insurance company?
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