USAA's Disregard for Members' Concerns Is a Mark of Failed Leadership

The United Services Automobile Association’s (USAA) extreme emphasis on diversity, equity, and inclusion (DEI), corporate social responsibility (CSR), and environment, social, and government metrics (ESG) is a grave concern to many of its members.  The company's departure from its fiduciary responsibilities and foray into the realm of politics contributed to the first non profitable year in its 100 year history.  Correspondence sent from USAA members, expressing dismay on the current state of affairs, to USAA CEO Wayne Peacock and the Board of Directors has been met with a lack of response or cursory excuses.

An open letter to the USAA Board of Directors written two weeks ago detailed a number of serious concerns about the company and its uncertain future under its current leadership.  Robust commentary in response to the letter elicited a plethora of far-ranging concerns and evidence supporting the author’s claims.

USAA is currently the target of a class action lawsuit for overcharging policy holders with collision coverage with reconstructed titles.  The litigants contend that USAA reaps a windfall for coverage it will not provide. In 2022 USAA settled a class action lawsuit alleging the failure to include sales tax in total loss payments to Ohio policy holders. 

Two current USAA employees, who wish to remain anonymous, stated that morale within the company is at an all-time low, the company's reputation is plummeting, and customer service is lagging. Much of this is due to the current CEO's leadership style. In the view of many employees, Mr. Peacock fails to inspire or cast a compelling vision. He is aloof, protected, and insulated from the employees by a close knit network of handpicked enablers. Until two years ago the USAA Board attended all CEO-employee meetings, but this tradition has lapsed. Controversial changes in budgeting and organizational structure are defended as a transition to the industry standard, which provokes consternation and frustration within the employee ranks, who note that USAA once set the industry standards in all metrics. 

Mr. Peacock, the first non-veteran to lead USAA, took charge of the company in 2020. Since then, all of the executive council have been replaced by workers primarily drawn from the public sector. The military connection continues to wane, as the company pivots to priorities more in concert with the public banking community and progressive ideologies more in harmony with a possible expansion of the USAA consumer base outside the greater military community. This is perhaps one of the reasons USAA labels DEI as a strategic imperative and managers are obliged to establish these parameters within employee performance goals. 

USAA maintains an aspirational goals program that is hidden from its employees and USAA members. It establishes hiring practices that are quota based, and according to a confidential source at USAA, the process specifically excludes white men. These practices expose the company to liability under Title VII of the 1964 Civil Rights Act that specifically prohibits employment discrimination based on race, color, religions, sex, and national origin.

Later this month USAA hosts the Annual Meeting of Members when the CEO and members of the Board of Directors are reappointed. But this year members of the USAA community have declared opposition to the promulgation of DEI within the company and are withholding support. Incentivized promotions based on DEI indoctrination program attendance have come into question. Concerns abound that studies from Harvard and Tel Aviv Universities of 800 companies over a span of 30 years demonstrated that DEI programs frequently fail to change employees' attitudes.  In fact they often aggravate biases and racial hostility. 

Rather than promote a healthy dialogue to address grievances between USAA management and disgruntled members, who have supported the company for decades, the USAA Board and CEO remain silent and distance themselves from those they are pledged to serve—an act of defiance to General Powell’s principles of enlightened leadership.

Scott Sturman is the President of the USAFA Class of 1972