Criticism of KEMI Board’s vote to remove executive salaries from website

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FRANKFORT, Ky. (WTVQ) – The governing board of Kentucky Employers’ Mutual Insurance (KEMI) is facing criticism after awarding “incentive payouts” to several top executives and voting to remove KEMI executive salary information from the state’s transparency website.

The action was taken Tuesday during a virtual meeting.

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Kentucky Treasurer Allison Ball reacted on Wednesday.

“I am disappointed to learn of the KEMI board’s vote to remove KEMI executive salaries from the transparency website. I have championed transparency in governmental salaries and spending since first taking office.  KEMI was created by statute and Kentucky taxpayers have a right to know this information,” Ball said.

KEMI president and chief executive Jon Stewart defended the board’s action in an interview with the Lexington Herald-Leader.

“All we are looking to do is protect our talent at the top level.  I understand the perception.  But we’re trying to run a competitive insurance company here,” Stewart told the newspaper.

Stewart told the newspaper he will add about $51,000 in compensation to his $275,000 salary for meeting certain performance goals during the second half of 2019.

The report adds that smaller awards around $30,000 will be given to other KEMI executives, including vice president and general counsel Tim Feld, who the newspaper says has a reported base salary of $185,000.

Kentucky Auditor Mike Harmon released an audit report last year criticizing KEMI’s spending.  Among the findings, business money used for expensive meals, liquor, gifts and entertainment for Stewart and other top executives; University of Kentucky athletics tickets for top executives for no clear business purpose and the awarding of no-bid contracts.

Auditor Harmon reacted to the latest move by KEMI’s governing board.

“When we released our examination 16 months ago that resulted in 10 findings and provided what I believe were sound recommendations, my office was hopeful KEMI’s leadership would follow those in the spirit of accountability and transparency,” Harmon said in the Herald-Leader report.

“By taking these actions, it appears KEMI’s board is taking a step back from being transparent to the customers they serve as an insurer of last resort. It is our hope these actions don’t lead to negative results for businesses served by KEMI, who are already dealing with financial issues due to the current pandemic,” Harmon said.

KEMI is the state’s largest issuer of workers’ compensation insurance, according to the report.  The company was created by the General Assembly in 1994 as an independent nonprofit.

Seven of the board’s ten members are appointed by the governor; the other three are state cabinet secretaries.

The current board is controlled by new appointees from Governor Andy Beshear, according to the newspaper report.

 

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Tom Kenny joined ABC 36 News in June of 2001 as a General Assignment Reporter. A native of Peoria, Illinois, he graduated cum laude with a Bachelor of Arts in Mass Communications from Western Illinois University. He currently anchors ABC 36 News at 5pm, 6pm and 11pm. Tom has more than three decades of experience in broadcast journalism. He is the only broadcast journalist in Lexington television history to be honored with a national Edward R. Murrow Award. Tom was recognized for reporting on a story that gave a rare glimpse inside the secretive world of the Federal Witness Protection Program. He has won an Emmy Award for anchoring and another for investigative reporting, exposing the deceit and potential danger of online diploma mills. Tom has ten other Emmy nominations to his credit for investigative and feature reporting. He has won Associated Press Awards for reporting and anchoring. He has won two Addy Awards for excellence in promotional writing. Tom was the first broadcast journalist in Lexington TV history to be awarded the Silver Circle Award by the National Academy of Television Arts and Sciences. It is one of the highest honors given by NATAS. It recognizes television professionals who have performed distinguished service within the television industry for 25-years or more. Tom was honored for more than his longevity, he was recognized for making an enduring contribution to the vitality of the television industry and for setting high standards of achievement. He was also recognized for giving back to the community as a mentor, educator and volunteer. Tom also has network broadcast experience in radio and television having worked as a sports reporter for ESPN, Sportschannel, NBC Sports and the Breeders’ Cup. He was also the studio host and halftime producer for CBS Radio Sports’ College Football Game of the Week and covered the NFL for One-On-One Radio Sports. Prior to joining WTVQ-TV, Tom was Vice-President of the Houston Astros Minor League baseball team in Lexington. He was part of the original management team that brought professional baseball back to the Bluegrass after a nearly 50-year absence. Tom has lived in Lexington since 1984. In that time, he has been heavily involved with dozens of charity and civic groups, with a special emphasis on helping Veterans. He can be reached at tkenny@wtvq.com. You can also follow Tom on Facebook www.facebook.com/TomKennyABC and Twitter @TomKennyNews. Just click on the links at the top of the page.