![]() ![]() In the years since then, compensation for corporate executives has, if anything, grown at an even faster pace. The company felt differently and fired him. As an American Family policyholder, he was one of the company’s owners and felt he had a right to organize the proxy fight. Navy veteran, regular church goer, and seemed to embody the American dream of middle-class success. ![]() Gadzinski had worked for the company for 29 years, supporting his two children and his wife of 32 years, was a U.S. In response, one agent named Dan Gadzinski organized a proxy fight, pushing American Family policy holders to elect a different slate of company directors. Meanwhile, the agents, who worked on commission only, were being forced to take a 10 percent cut in commissions while increasing the amount of paperwork they handled for the company. The company now had 23 executives making more than $200,000, up from just two the year before. CEO Dale Mathwich saw his compensation rise by 26 percent in 1994, rising from $681,192 to $856,121. By 1994, as Business Week then reported, corporate executive pay had skyrocketed over a 20 year period: In 1974, CEOS in America earned about 35 times more than the average worker, but by 1994 they made 150 times more.Īmerican Family began jacking up its executive pay, as a column I did for Milwaukee Magazine back then documented. As the company’s website notes, “American Family Insurance and its sales force of nearly 3,500 agents provide industry-leading service to customers… No matter how life changes, your American Family agent will be there, providing the caring support and dependable service you deserve.”īut by the mid-1990s, that homey sounding philosophy began to change as the company moved toward the winner-take-all philosophy of America’s corporate board rooms. And the policy holders in turn have their closest relationship with the company’s insurance agents. Over the decades the company gradually added other customers and other lines of insurance and today sells insurance in 19 states.ĭespite that growth, the company remained a mutual company, meaning it is owned by its policy holders rather than stock holders. Why would a company want to treat its agents, who are so critical to its success, in this way? The answer tells us a lot about the state of American business today.Īmerican Family began modestly, as a small company founded in the 1920s that mostly provided car insurance to Wisconsin’s farmers, who were considered lower risks than city drivers because they drove less often. Last week a jury ruled that the Madison-based company, American Family Insurance, has grossly underpaid retirement benefits to its agents, and may owe them as much as $1 billion. ![]()
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