This paper examines the relationship between the compensation of CEO, the managerial discretion, the ratio of insider director and the performance in insurance industry from 1995 to 2004. There are three main findings. First, the property insurance companies with higher proportion of auto insurance and reinsurance, more CEO compensation. Second, the result indicates that the more the ratio of insider director, the less CEO compensation. And the ratio of insider director significantly affects CEO compensation in life insurance than property companies. Finally, we find that the firm performance is more positively associated with CEO compensation in property insurance industry.