Colorado Gov. John Hickenlooper and the new chairman of Pinnacol Assurance are looking into changing terms of a $4.3 million severance package for top executives of the state-chartered insurer.
Hickenlooper and chairman Blair Richardson confirmed attorneys are looking at the severance package, which the Pinnacol board approved in 2009, KMGH-TV reported Thursday. The package covers 12 senior executives.
The workers’ compensation insurer came under scrutiny last year after KMGH reported executives and board members hosted a pricey agent incentive trip to Pebble Beach, Calif. The trip cost more than $300,000 and included rooms at $1,400 a night for CEO Ken Ross and three board members.
The board approved the severance package in what some lawmakers saw as a reaction to possible legislative action on how Pinnacol operates, or a bid by legislators to take Pinnacol’s surplus to help balance the state budget.
Hickenlooper said attorneys hired by Pinnacol’s board are investigating whether any severance payments would be legal.
“That type of parachute is unusual certainly at this level,” said Hickenlooper, who has appointed three new members to Pinnacol’s board. “I think it’s disproportional. It’s troubling.”
Richardson said he has two law firms looking at the agreement.
“Well, I personally don’t like golden parachutes whether they’re at Pinnacol or at IBM,” Richardson said.
Ross defended the package in the past but said he was open to revisiting it with the board.
The governor appoints Pinnacol’s board, but it operates largely like a private insurer. It is required to cover employers that private insurers won’t cover and is exempt from paying state taxes.
Pinnacol previously has defended its executive pay and incentive trips as modest compared to its competitors.
In May, Hickenlooper signed a bill that limits travel expenditures by state employees and state-chartered entities. The law is a response to Pinnacol’s Pebble Beach trip.
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