Michael Gold, executive vice president and chief operating officer, was the second-highest paid at HMSA, earning a total of $432,141 in 2003.

"Based on the size and complexity of HMSA's operations and the executive salaries in the market, the salaries (of HMSA executives) appear to be reasonable," said J.P. Schmidt, state insurance commissioner.

The state's largest insurer needs to pay competitive salaries to attract the best talent to run the company, Schmidt said.

Until yesterday, HMSA had not recently provided executive compensation numbers to the public. It did so after a request from the Insurance Division.

Yesterday's release shows HMSA's 10 highest paid executives received $3.4 million in salary and other compensation in 2003. That's 3 percent of the $112.2 million in total administrative costs spent by the health insurer last year. In 2003, HMSA took in $1.8 billion in revenue and earned a net income of $47 million.

Steve Van Ribbink, HMSA's chief financial officer, said executive salaries are set by a compensation committee comprising directors who are not HMSA employees. The committee also consults with Towers Perrin, a global human resources firm. Consideration is given to salaries paid by other companies similar in size and complexity to HMSA in the healthcare industry and by other large Hawai'i firms.

In Hawai'i's healthcare industry, Hiam's salary is topped by Roger Drue, the former president and chief executive of Hawaii Pacific Health, who made $725,076 last year. Drue retired at the end of June and was replaced by Charles Sted, the health system's former chief financial officer.

Hawaii Pacific Health is a nonprofit organization formed from the 2001 merger of Wilcox Health, Kapi'olani Health and Straub Clinic & Hospital.

On the Mainland, Harvard Pilgrim Health Care, a nonprofit health plan based in Wellesley, Mass., gave CEO Charles Baker $807,221 in fiscal 2002. Like HMSA, Harvard Pilgrim had annual revenue of $1.8 billion.