Liberty Mutual’s Ted Kelly stepping down as chairman
Edmund F. “Ted” Kelly, who led Liberty Mutual Group to a threefold revenue increase while earning some $200 million in his last four years as chief executive, will step down as chairman this summer and end more than two decades with the company, the Boston insurer said Wednesday.
Kelly, 67, of Weston, joined the company as president in 1993, became chief executive in 1998, and added the title of chairman in 2000. He retired as chief executive in 2011, succeeded by David Long, who will also replace Kelly as chairman of the board of directors. The change takes effect June 28.
“Ted set the organization on the healthy path it travels today,” Long said. “He had the vision to move Liberty from being a workers’ compensation writer in the US to a global insurer.”
Kelly could not be reached for comment.
Kelly became the source of controversy last year when state insurance filings revealed he received nearly $50 million a year from 2008 to 2010.
The company defended the pay, saying that it reflected Kelly’s success in transforming Liberty Mutual from a struggling insurer to a Fortune 100 company. Liberty Mutual officials also said regulatory filings skewed Kelly’s pay because they included long-term incentives that Kelly earned over the course of his career but cashed in near the end of his tenure.
Liberty Mutual is a mutual company, owned by its policyholders, and Attorney General Martha Coakley questioned why a company would increase rates on its policyholders at the same time it boosted a top executive’s pay to roughly $200 million in four years. The pay also sparked criticism from government watchdogs, irked that Liberty Mutual received $46.5 million in state and local tax incentives in 2010 to build a tower near its Back Bay headquarters and create 600 jobs.
The uproar over Kelly’s pay led the Legislature last year to require mutual insurers based in Massachusetts to either post executive pay details on their public website or mail the information to policyholders.
Kelly earned roughly $400,000 a year as chairman. Company spokesman John Cusolito said Kelly will relinquish access to company jets and other perks when he steps down.
The Irish native graduated from Queen’s University in Belfast, Northern Ireland, and earned a PhD in mathematics at MIT. He worked with Aetna Life and Casualty Co. for 18 years before joining Liberty Mutual, then a struggling firm that depended heavily on workers’ compensation business. Kelly diversified the business and expanded primarily through acquisitions, more than doubling its workforce and number of offices. Liberty Mutual had more than $34 billion in annual sales in 2011, Kelly’s last year as chief executive, up from $11 billion in 1998, his first year as CEO.
Kelly’s most contentious move came more than a decade ago, when he created a holding company for Liberty Mutual, which allowed the company to sell a minority stake in subsidiaries to outside investors without compensating policyholders. The change also made it more difficult to track the pay of Liberty Mutual executives.