USAA CEO Compensation Rose Dramatically in 2023 — Along With Customer Premiums

USAA President and CEO Wayne Peacock was paid at least $8.1 million in 2023, an increase of more than two-thirds of his 2022 compensation of $4.8 million.

That year, USAA reported its first-ever annual loss, a net loss of $1.3 billion, which it blamed on inflation, rising interest rates, supply chain woes and payouts totaling more than $2.5 billion.

Peacock, who became CEO of the financial services giant in 2020, earned $1.9 million in 2021. All of his compensation amounts come from the Nebraska Department of Insurance.

The five USAA insurance companies that reported executive compensation for 2023 included USAA Life Insurance, USAA General Indemnity, USAA Casualty Insurance, United Services Automobile Association and Garrison Property and Casualty Insurance.

In addition to insurance, USAA provides insurance, banking and investment services to more than 13 million members of the U.S. military, veterans and their families, according to its 2022 annual report.

Executives’ compensation, which was first reported in the San Antonio Express News, rose alongside customer premiums. On an annual basis, auto insurance costs rose 17.4% in 2023, according to the Bureau of Labor Statistics, the biggest jump since 1976. A spokesman for AAA told Yahoo Finance that higher and more expensive claims are driving the increase.

Home insurance rates rose an average of 11.3% last year, according to S&P Global Market Intelligence, with USAA rates up 14.7%. Texas homeowners saw the steepest increase in rates last year, at more than 23.3%. Companies are reporting inflation and high reinsurance rates as culprits.

In an October press release, the Consumer Federation of America, an association of non-profit consumer organizations, criticized rising insurance executive compensation at the same time consumers are paying higher premiums.

“Insurers are telling regulators that ordinary consumers have to pay much more for auto and home insurance because the companies are struggling with inflation and climate change,” said Michael DeLong, CFA’s research and advocacy associate, in the statement.

“But they are quietly handing CEOs gigantic bonuses. … [T]here needs to be more scrutiny of the rate hikes companies are demanding and the huge CEO paydays that are funded with customer premiums.”

The nonprofit listed 2021 and 2022 compensation for the top executives at ten insurance giants, including USAA. Peacock’s was the lowest of the ten; CEOs at State Farm and Travelers pulled in $24 million and $20 million, respectively.

Other top USAA executives also saw their compensation rise in 2023. USAA Life President Brandon Carter’s compensation rose from $1.8 million in 2022 to $1.9 million in 2023. The vast majority of that, as in most executive compensation packages, came through bonuses. Carter’s salary in 2023 was listed as $473,000, with a $1.3 million bonus.

Randy Termeer, listed as president of P&C Insurance Group, saw his compensation grow to $2.2 million in 2023, up from $1.6 million the year before, over two-thirds of that as bonuses.

Peacock’s bonuses made up $6.8 million of his compensation, or 84% of the total $8.1 million.

“Compensation for the CEO and all executives includes base and incentive pay as well as compensation that is paid out over a period of multiple years,” said USAA in a statement. “Their total compensation varies based on performance, market conditions and other factors.”

“Recruiting top talent at USAA allows us to provide members with highly competitive products and exceptional service they expect and deserve. This helps us meet our mission to empower the financial security of the military community and their families.”

Late last year, the company announced it would expand its education benefits for employees and their dependents in an effort to attract and retain talent. USAA employs roughly 37,000 people around the country, including 19,000 here in San Antonio, where the company is headquartered. It laid off several hundred people in 2022 and 2023.

USAA has not yet released its 2023 annual report; in 2022, it reported the $1.3 billion net loss down from a $3.3 billion profit in 2021, and just over $36 billion in revenue in 2022, a 3% decline from the previous year. The company’s net worth dropped to $27.4 billion in 2022 from $40 billion.

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