IWIF gives its top employees bonuses again, despite losses

Investment income offsets problems, officials say

April 22, 1999|By Walter F. Roche Jr. | Walter F. Roche Jr.,SUN STAFF

Despite posting a hefty net operating loss in 1998, the state Injured Workers Insurance Fund has handed out a new round of bonuses for last year's performance to dozens of its top employees ranging to more than 14 percent.

The bonuses, according to records in the state Office of the Comptroller, include a $20,962, or 14.3 percent payment, to IWIF president Paul M. Rose, whose annual salary is $147,000.

Other executives at IWIF got bonus payments ranging from 7.67 percent for vice presidents including Donna C. Wilson to 10.78 percent for the chief operating officer, Doreen Horvath. Horvath's annual salary is $114,600 while Wilson's is $100,000.

Officials of the agency noted that the $14 million net operating loss was offset by substantial investment income from the booming stock market and allowed IWIF to end 1998 with a net gain of $5.6 million. The IWIF board also voted to reduce its reserves by $5 million to offset operating losses.

The IWIF, created by the legislature more than 75 years ago, is run by a board appointed by the governor. The board meets monthly, and members draw salaries ranging from $12,360 to $14,420. With headquarters on Lock Raven Boulevard near Towson, the agency competes directly with private insurance companies providing workers compensation insurance coverage to Maryland companies.

Responding to critical reports on IWIF, Gov. Parris N. Glendening announced plans in March to appoint a task force to look in to the agency's operations. He has yet to name members to that panel.

The new bonuses are in addition to similar payments made by the agency to its top employees a year ago. Last year, Rose was paid a bonus of $28,400 while other IWIF employees got extra payments ranging from $3,300 to $13,500.

Daniel McKew, chairman of the IWIF board, said the bonuses were the result of a board-approved annual incentive plan.

"We evaluated the criteria, and they met the criteria," said McKew, adding that the performance was "lower than the middle of the scale."

He also noted that IWIF's net operating loss could have been reduced further by drawing additional funds from reserves, but board members chose to take "a conservative approach."

Records made public recently by IWIF under the state Public Records Law show that top IWIF officials, including some past and current board members, have made dozens of trips to attend conferences in Maryland and across the country over the past three years. The payments for 1996, 1997 and 1998 totaled $138,755.

In 1996, Rose attended conferences in New Orleans, Portland, Maine, Las Vegas, Orlando, Fla., and Chicago. In 1997, he visited Newport, R.I., Orlando and Vail, Colo., and in 1998 he attended events in Orlando, San Antonio, and Park City, Utah.

This year, Rose attended another conference in Las Vegas, where his hotel and other expenses totaled slightly less than $1,000. He went to another conference in Orlando in early February. Total IWIF travel expenses for conferences and meetings this year total $13,292.68.

IWIF also has paid for a series of annual board retreats for top staffers and board members. The latest, held Oct. 25 to 27 at Rocky Gap Lodge and Golf Resort in Western Maryland, carried a tab of $5,928.94.

McKew said that he asked Rose recently to regularly provide the board with more details of the travel budget and to report back to the members on the results of meetings and conferences.

He noted that the locations for the meetings were not determined by Rose or other IWIF officials.

Pub Date: 4/22/99

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