The total compensation for State Farm’s top executive is lower than his predecessor’s and several of his peers in the insurance industry.
State Farm Chairman, President and CEO Michael Tipsord’s total compensation in 2017 was $8.5 million, according to documents filed with the Illinois Department of Insurance. That includes a $1.6 million base salary and a $6.9 million incentive-based bonus.
That’s less than what his predecessor, Ed Rust Jr., made in the latter part of his tenure. Rust’s total compensation hovered between $9.4 million and $13.6 million between 2007-2015. Tipsord was named president and CEO in 2015 and chairman in 2016.
“State Farm maintains a competitive, market-based compensation structure for all associates within the organization. This structure links performance and compensation,” company spokesperson Jim Camoriano said in an email.
Tipsord’s at-risk incentive compensation is “based on our financial results, growth, customer retention, and employee satisfaction for the three years prior to the year of compensation,” said Camoriano.
Tipsord joined State Farm in 1988. He was named vice president and assistant treasurer in 1998, vice president and treasurer in 2001, and senior vice president in 2002. He was named chief financial officer in 2004, chief operating officer in 2011.
Tipsord also makes less than several of his CEO peers in the insurance industry, according to public records and financial documents reviewed by GLT.
Progressive President and CEO Tricia Griffith’s total compensation in 2017 was $9.3 million, according to SEC filings. Liberty Mutual Chairman and CEO David Long’s total compensation in 2017 was $19.7 million, according to a filing with the Massachusetts Division of Insurance. Allstate Chairman, President, and CEO Tom Wilson’s total compensation in 2017 was $17 million, SEC filings show. Those compensation packages vary in structure but generally include a base salary, bonuses or performance-based incentives, and sometimes stock awards.
In March, State Farm reported its second-straight year of operating losses for its property-casualty insurance businesses, as the company pledged to get leaner and make significant internal changes. The company has announced job cuts in information technology (IT) and State Farm Bank.
The Bloomington-based insurer also announced in January that it was giving $1,000 one-time bonuses to some of its employees, despite the cost-cutting elsewhere.
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