Mr. Meredith termed 2005 a challenging year for property-casualty insurers, where only 10 out of 27 companies in the Bank of America p-c reporting universe reported growth in operating earnings. CEO compensation was up 5 percent compared with 2004, he noted.

"But that said, the average increase in total CEO compensation was 38 percent, while the median change was down .5 percent." Mr. Meredith wrote.

Record hurricane losses in 2004 and 2005 contributed to this factor in that some companies awarded no bonuses.

"Total annual cash bonuses were up 10 percent, with 12 companies giving the CEO a higher bonus and 10 companies giving lower bonuses," he wrote.

The Philadelphia companies appeared to provide the most value to shareholders relative to CEO compensation, whether related to total returns, underwriting results or return on equity. "Arch Capital, Chubb, Republic and ProAssurance also delivered consistent value on this basis," Mr. Meredith wrote.

Mr. Meredith wrote that the insurers do a poor job of defining incentive compensation metrics in their proxies. "Moreover, there is little correlation between the performance metrics laid out in the proxy and CEO compensations," he added.

Among the factors contributing to that were the discretionary authority of board compensation committees and the timing difference of when long-term incentive compensation is granted versus when it is earned and how it is paid out, he said.