State Farm Chief Executive Officer Ed Rust Jr. received $11.66 million in compensation for 2006, $5.26 million more than he did in 2005, the company disclosed.
He received a base salary of $1.77 million and performance bonus of $9.89 million, the Bloomington, Ill.-based mutual insurance company said.
Dick Luedke, a company spokesman, said Mr. Rust's salary reflected the company's increased profits, growth, and customer and employee satisfaction.
The company reported a net profit Friday of $5.32 billion for 2006, an improvement from its net profit of $3.24 billion in 2005 when its performance suffered from a record hurricane season.
Mr. Rust was named president and CEO of the company in 1985. He was named chairman of the board in 1987.
Mr. Luedke said that for the past few years the company has released the information to the local papers, not nationally. The story was originally reported on Pantagraph.com.
As a mutual, the company is not obligated to report publicly as do publicly traded companies, he noted. He added that while Mr. Rust received a substantial performance bonus, unlike public companies, he does not receive stock options, since mutual companies do not trade stock.
He also called Mr. Rust's compensation "modest" compared to others on the Fortune 500 list, putting him at around 124 on the list.
According to National Underwriter's Highline Data Service, State Farm is the number one insurer in the United States followed by American International Group and Allstate.
Comparing Mr. Rust's salary with his peers, he is behind them.
According to a Securities and Exchange Commission filing, Martin J. Sullivan, AIG's chairman and CEO, received $16 million in 2005, with a base salary of $1 million.
Edward M. Liddy, Allstate's chairman and CEO, received compensation, with stock options, of more than $17 million in 2005 according to Pantagraph. An SEC filing for 2005 put his base salary at less than $1.2 million. Adding up his stock options in the filing, his compensation totaled $13.2 million, and with additional stock rewards, he appears to easily surpasses that figure.
Michael Trevino, a company spokesman, said that in 2005 Mr. Liddy received a bonus of $538,000, far below his bonus of $3.7 million in 2004. The amount of the bonus was based on company performance.
He went on to say that the total of additional compensation can vary significantly based on the timing of the stock options. The options have long-term schedules ranging from four to ten years, with percentages of their worth vesting at different points in the schedule.
A proxy statement of executive earnings for 2006 is to be filed later this month, said Mr. Trevino.
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