Former California State Fund President Earned $1.6 Million

March 24, 2010

The ex-president of California’s largest provider of workers’ compensation earned more than $1.6 million in her two years on the job, according to a Los Angeles Times report.

Janet Frank, 58, was hired in 2007 to oversee State Fund after its president was ousted in a scandal. The organization is part government-run but financed by private business.

Frank was awarded an annual salary of $450,000 plus a slew of other incentives including a signing bonus of nearly $140,000 to help her move from Colorado. She never moved to California and instead commuted from her Denver-area home — a commute that was partly offset by a $99,000 annual stipend.

Frank’s salary illustrates a conflict within a public-private enterprise. Most of State Fund’s 7,400 workers’ salary is limited by Civil Service rules, but top executives are exempt and can earn much more.

State Insurance Commissioner Steve Poizner, the regulator of State Fund, said he was disturbed by Frank’s pay. He said he would order an audit to see if there was “anything that’s been inappropriate or wrong with regards to the way they’ve compensated their senior team.”

Agency officials said that during her tenure, Frank helped stabilize State Fund by making it more efficient and improving customer service and computer technology.

Frank, who worked at several private insurance companies before joining State Fund, declined to be interviewed.

“It has nothing to do with me,” she told the Times. “I’m a private citizen.”

Frank was hired to run State Fund after problems emerged in 2006, when its board uncovered potential conflicts of interest and self-dealing by its members and executives.

Other executives were also hired to help turn State Fund around and she was not the only one who was highly paid and allowed to commute from another state.

Frank quit the agency in November and within two months went to work for Zenith National Insurance.

State Fund, formally called the State Compensation Insurance Fund, was created in 1914 so businesses that private insurers deem too risky to cover have a venue from which to buy policies the law requires them to have.

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