A week today in Sydney, long-suffering shareholders in QBE, the country’s biggest insurer, will be asked to approve an increase of hundreds of thousands of dollars in non-executive directors’ fees and the $2.34 million goodbye payment to former CEO Frank O’Halloran. After the slide in the share price in the past five years (of more than 60%), numerous profit warnings and a cut in the dividend, do you reckon the mood at the meeting might be a touch heated? After all, the same board and (former) CEO are responsible for QBE’s problems, but they seem oblivious to the damage they have caused.

It makes you wonder about some of our supposedly top-notch companies when it comes to pay and conditions of senior executives, and especially the board. They just don’t get it. Blame won’t bring back the lost value on the shares (down more than $20 a share since 2007), or the lost dividend or profits. But some contrition might be appropriate. To try to mitigate the financial impact of a series of dud acquisitions by O’Halloran (and signed off by the board), QBE has been forced to start cutting staff and other costs. The 2012 profit slide was the last straw for the company. Ratings agencies and regulators will be watching closely to make sure QBE gets it right.

Investors, from the small individual holder to giant super funds managing the savings of millions, have seen the value of their QBE holdings battered in the past five years. They have had to put up with a share price that has fallen by more than 66% since the high of more than $US35 before the GFC, and an effective slashing in the annual dividend as the insurer seeks to preserve capital amid rising costs and poor business conditions.

O’Halloran and the board (including chairperson Belinda Hutchinson, who remains at the company) were in charge of the acquisition campaign of between 70 and 140 companies around the world in the past 10 years — and the subsequent cost and earnings problems for QBE. O’Halloran retired midway through 2012. Profit for all of last year was $US761 million. Dividend was chopped from 70% of reported profit to up to 50% of the cash profit (which could be lower than the reported profit, which might include gains in asset values and other book profits).

QBE currently has a market cap of $US16 billion, which makes it a top 20 global insurer by market, so it remains a substantial company, and new CEO John Neal is looking at cutting $US250 million from QBE’s costs by 2015. As a result, there have been several stories this year suggesting hundreds of jobs will go around the world from back-room staff, including some in Australia. It’s not hard to see why, as The Financial Times Lex column pointed out last month:

“QBE is an interesting proposition given its fall from grace and Mr Neal’s streamlining plans. Any group of 17,000 employees running eight payroll systems has some easy ways to save money and integrate units. There is no doubt that QBE needed a more united approach. Mr Neal’s predecessor, Frank ‘we don’t chase organic growth’ O’Halloran, made somewhere between 70 and 140 acquisitions (the mere fact the number is not clear says it all) but the profits warnings of the past two years seemed to be surprises not just to investors, but also to managers.”

Shareholders will be asked to approve an increase in the total amount paid to non-executive directors from $2.7 million to $3.3 million. The higher payout is justified by the company’s creation of a “risk and capital committee”. The company said in the notice of meeting, “Fees paid to the Chairman and the non-executive directors for 2013 will not increase”. But what about 2014 and beyond?

The current $2.7 million maximum payout was approved at the 2007 AGM, when it was lifted by $500,000 from $2.2 million. The company says it wants to appoint two new non-executive directors in 2013, one to replace a retiring director, the other a new person to boost the number on the board from seven to eight. Why the rush when the present lot have failed to control the company’s unchecked, costly expansion for years?

And tonight could bring further regulatory pressures for QBE when the International Association of Insurance Supervisors is expected to reveal its list of insurers “too big to fail”, as bank regulators did last year. All told there could be as many as 48 insurers listed, which could include QBE, which is a significant player in reinsurance and in the Lloyds market in London in particular.