The decision by the local insurance giant Liberty Mutual to reduce its maximum contributions to the 401(k) accounts of its 38,000 employees wasn’t out of line with industry norms; Liberty Mutual workers still get solid benefits. Likewise, the company’s request for special tax breaks in exchange for constructing a new office in Boston was fair enough; Liberty Mutual can’t be faulted for seeking a good deal.
Rather, each of those nods to corporate frugality only underscore the outrageousness of the $200 million Liberty Mutual gave its former CEO Ted Kelly over four years, and the company’s incredible executive perks, from a $4.5 million renovation of new CEO David H. Long’s office suite to a fleet of aircraft to take Kelly to his vacation home in Florida, among other trips.
Such gross excesses are not in line with industry norms, as Liberty Mutual has tried to claim. The state’s other insurance giant, Mass. Mutual, paid its CEO a tiny fraction of Kelly’s take. Liberty Mutual’s profligacy is all the more troubling because it is owned by policyholders, not shareholders, and thus requires greater state oversight — which has been lacking.
Liberty Mutual’s workers have reason to be disappointed by the cuts to their retirement accounts, and taxpayers in Boston and statewide have reason to feel chafed by the firm’s tax breaks. But neither move is as out of sync with reality as the gifts to Kelly and others in the executive suite.