Until last night, I knew nothing about Allstate CEO Tom Wilson but within minutes of him appearing on my radar screen I learned he was worthy for induction into the Starkman Approved Clueless CEO Hall of Shame. With Donald Trump’s inauguration just weeks away and even Democrats realizing the disastrous consequences of the Biden Administration’s “come one, come all” border policy, one could reasonably expect that a CEO who was paid $16.5 million in 2023 would know better than to flaunt their inner Kamala Harris and lecture Americans about their “addiction to divisiveness.”
“Join Allstate working in local communities all across America to amplify the positive, increase trust, and accept people’s imperfections and differences,” Wilson said in his Sugar Bowl message, which Allstate sponsors. “Together, we win.”
The FBI said a terror attack this week in New Orleans where the Sugar Bowl was played was reportedly carried out by 42-year-old US citizen and 13-year Army veteran Shamsud-Din Jabbar, who rammed his truck into a crowd on Bourbon Street, killing 14 persons and injuring dozens more. Jabbar’s truck reportedly carried an ISIS flag.
To many, particularly Trump supporters, Wilson’s comments were the sort of woke pablum for which legions of Americans have developed a strong distaste.
“Are you kidding me? The board needs to FIRE this tone-deaf CEO IMMEDIATELY,” Kyle Reyes, a rabid Trump supporter, posted on LinkedIn.
Replied Patrick Dahling: “A message for Corporate America: We the People don’t care what your opinions are on anything, because they don’t matter. We go to you ONLY for the products and services we need; NOT for your opinions. It would be nice for an insurance company to worry about bring my premiums down, as much as they worry about spouting nonsense.”
Wilson’s video sufficiently triggered some viewers to call for an Allstate boycott.
After watching his Sugar Bowl message, Wilson struck me as another virtue signaling wokester in the spirit of Ed Bastian, the Delta CEO who became the darling of the corporate media when he railed about Georgia’s supposedly discriminatory election laws. Readers of this blog are familiar with the Starkman Approved Theory, which holds there is an inverse relationship between companies professing the loftiest ideals and values and their actual business practices. Wilson further validates my eponymous maxim.
Ready?
Wilson is both chair and CEO of Allstate, a company he has overseen since 2007. According to his official Allstate bio, Wilson is a “public advocate for business playing a broad role in society through initiatives such as providing living wages and improving diversity and equity.” In 2021, Allstate disclosed it would measure executives’ progress against factors including “inclusive diversity and equity strategies” when setting their annual cash bonuses.
Wilson’s bio says he has led Allstate “through increased severe weather due to climate change,” which begs the question about Wilson’s leadership in wake of historically severe weather since the biblical days of Noah.
Given Allstate’s diversity commitment, it seems incongruous that the Black Latino son of beloved baseball legend Roberto Clemente in 2022 sued Allstate, alleging the insurer and its representatives racially discriminated against him and his family after they bought a franchised insurance agency in Pittsburgh.
Roberto Clemente Jr., a proud Trump supporter, alleged that Allstate wrongly prevented him and his relatives from using the Clemente name in connection with the family agency and took other actions to purposely hinder their business.
“From the beginning, Allstate did not want plaintiffs,” the suit said. “They did not want plaintiffs because their newly-formed-minority-owned agency threatened the established agencies that are almost exclusively white-owned.”
The racial bias and fraud dispute reportedly was settled last October after a federal judge in April 2023 allowed the Clemente family lawsuit alleging that Allstate committed fraud and racial discrimination to proceed.
Then there’s Allstate’s business practices, which have come under considerable scrutiny from class action attorneys. One of them is the Texas-based firm Samples Ames, which warns on its website, “You Are Not in Good Hands with Allstate.” The law firm alleges that Allstate “is famous for shady practices” including: consistent and unreasonable delays paying claims to force its policyholders to give up; denying valid claims or offers a lower amount than what should actually be paid; and unfairly defends claims that should have simply been paid or settled.
A company can be judged by the company it keeps. According to Samples Ames, Allstate retained McKinsey & Co. to design its “shady” business practices. McKinsey has deep ties to the Biden Administration. Not surprisingly the Justice Department late last month allowed the consulting firm to escape criminal prosecution for its role in helping “turbocharge” sales of the highly addictive prescription pain pill OxyContin.
In November, Allstate settled a class action lawsuit for $25 million after policyholders accused the company of inflating premiums and unfairly denying claims. In April of last year, Allstate reached a settlement of $90 million in a class action lawsuit filed by shareholders who accused the company of defrauding them by concealing its practice of lowering underwriting standards to fuel growth. For the record, Allstate denied any wrongdoing but chose to settle to avoid the burden, cost, and uncertainty of litigation.
In what I believe was a related lawsuit, CEO Wilson in 2016 was sued for alleged insider trading, but it’s unclear how that litigation was resolved.
The Wallace Miller law firm is pursuing a class action lawsuit in California alleging that Allstate misclassified the “exclusive agents” selling its insurance products as independent contractors but treated them as employees under the law. These agents allegedly were required to pay business expenses that Allstate, as their employer, should have handled.
For those considering turning to the “good hands people” for their insurance needs, I urge you to watch this 2019 investigative report by Atlanta TV station WSB featuring a former Allstate attorney on camera saying the company’s practice was to make low-ball settlements and then grinding down policy holders into accepting them. The report also featured a Nissan-certified collision shop questioning repairs done by an Allstate sanctioned repair shop.
Finally, if you might be impressed with Wilson and Allstate’s business practices and want to buy the company’s stock, be aware that Wilson this past summer sold $32 million worth of his Allstate holdings at prices ranging from $179.307 a share to $179.573 a share. Allstate closed Friday at $191.45.
Allstate also has engaged in controversial stock repurchases, a legally permissible form of stock price manipulation.
I’m doubtful that Allstate will lose many customers because of Wilson’s questionable Sugar Bowl message, but hopefully it might spark increased media scrutiny into Allstate’s business practices. As well, perhaps it will persuade any doubters about the wisdom of the Starkman Approved Theory.