The State Compensation Insurance Fund has recruited a high-priced team of former executives from the private sector to turn it around after years of scandal and financial problems.

But MSN reports that the hires are earning six-figure salaries that dwarf others in state government, drawing concerns from some in the state Capitol who question the cost as the agency rebuilds following investigations in years past that led to the removal of top managers and mass layoffs forced by loss of business.

The State Fund, has also been criticized for hiring the spouses and adult children of agency managers. Its 11-member board of directors, which is appointed by the governor and legislative leaders, has become a soft landing spot for former lawmakers and other political insiders.

Bonuses and incentives awarded by State Fund’s board have boosted compensation to more than $500,000 each for its seven top managers including its CEO, whose annual pay is some $732,000 – more than three times the $210,000 salary of the governor. The salaries have prompted some lawmakers to call for an oversight hearing to determine whether the compensation is justified.

Agency officials including Board Chairman David M. Lanier say the compensation is warranted because of the unique mission of State Fund, which was created by the Legislature in 1914 to provide workers’ compensation insurance to businesses in the state, including those who can’t afford coverage from the private sector.

“The challenge we have is it’s a billion-dollar insurance company,” Lanier said. “There’s not another one of those in state government, so we need and value talent and expertise from the insurance industry.”

The agency’s biggest troubles began in 2007, when State Fund’s board fired its president and vice president after an audit found questionable financial practices involving the sale of discounted policies through outside associations linked to some board members. The scandal also resulted in the resignation of two board members whose private companies collected at least $265 million over 10 years from State Fund for administering group policy programs.

In 2011, State Fund laid off 25% of its 6,800 workers in response to its loss of market share. And its workforce has continued to drop, sitting now at 4,270 employees.

In the years after the scandal, the board of directors sought to expand its powers by persuading the Legislature to increase from one to 16 the number of executive positions exempt from civil service rules and pay scales.

In 2014, the board appointed Vernon Steiner as president and CEO of State Fund, who touted his 30 years of experience in the insurance industry. He received a base salary of $450,000 as well as various performance-linked bonuses.

In November, the State Fund board approved raises in base salary, bonuses and incentive payments for 17 managers, including Steiner, whose base pay this year has been increased by $36,000, or 7%, to $544,450. By comparison, State Fund’s then-CEO was paid $273,000 in 2007.