In the time Pinnacol Assurance was making its latest legislative pitch to become a private company, executive compensation exploded.

Then-CEO Phil Kalin was paid more than $972,000 in 2019 and just over $1 million in 2020, the bulk of it from bonuses.

In 2021, Kalin was paid $910,593, a 75% bump on a base salary of $518,365, according to Pinnacol data obtained by The Denver Gazette through an open-records request.

There were others who did even better.

• Kalin retired in March 2022 — he was given $644,136 for those three months of work including unpaid vacation — and was replaced by John O’Donnell, a former executive at Allstate, with a base salary of $725,000. With bonuses, O’Donnell was given nearly $828,000 in compensation last year.

• Pinnacol’s chief legal counsel, Terrence Leve, last year was given $770,555 in total compensation — a 109% increase over his base salary of $368,101, records show.

• Total compensation for chief financial officer Kathy Kranz was $625,729 last year, a bump of 102% over her base salary of $309,336.

A Pinnacol spokeswoman said Leve and Kranz were given “discretionary” bonuses that exceeded the norm because “they were key members of the organization critical to a successful CEO leadership transition.”

After just nine months on the job, CEO O’Donnell’s base salary for 2023 took another jump: to $761,250 — 68% higher than Kalin’s when he retired — records show. With a top bonus of about 64%, O’Donnell stands to make more than $1.2 million this year.

By contrast, the executive directors at the state’s two other quasi-governmental entities were paid substantially less.

At PERA, the state employee retirement fund worth about $56 billion, former executive director Ron Baker, was paid about $472,000 last year including bonuses. His interim replacement, Amy McGarrity, was PERA’s chief investment officer last year and was paid more than $783,000 including bonuses.

And Cris White, the executive director of the Colorado Housing and Finance Authority, last year was paid $496,392 including bonuses. His base salary was $401,615, records show.

But making those comparisons is not how Pinnacol sees it, according to the executive compensation pay philosophy it adopted in 2016 and still relies on today.

“The foundation of the executive compensation program is to attract, retain, and motivate quality employees with competitive compensation based on relevant labor markets,” according to that philosophy. It will be “targeted at a competitive level, consistent with relevant market practices when compared to the appropriate labor markets … and peer organizations.”

Peer organizations would be other insurance companies in the private sector, not government-created agencies such as PERA or CHFA.

Denver-based Pinnacol Assurance CEO John O’Donnell

Courtesy of Pinnacol Assurance/Steve Lebeau