Salaries skyrocket at California state insurance fund following years of scandal

SACRAMENTO, Calif. - A California public agency that offers workers' compensation insurance coverage to employers has recruited a high-priced team of former executives from the private sector to turn it around after years of scandal and financial problems.

But the hires are earning six-figure salaries that dwarf others in state government, drawing concerns from some in the state Capitol who question the cost as the agency rebuilds following investigations in years past that led to the removal of top managers and mass layoffs forced by loss of business.

The State Compensation Insurance Fund, known as State Fund, has also been criticized for hiring the spouses and adult children of agency managers. Its 11-member board of directors, which is appointed by the governor and legislative leaders, has become a soft landing spot for former lawmakers and other political insiders.

Bonuses and incentives awarded by State Fund's board have boosted compensation to more than $500,000 each for its seven top managers including its CEO, whose annual pay is some $732,000