So I guess my question is, is there any hope for him? Is there anything I can do to improve his design without being insulting?
You don't need to improve his design skill, you need to get those tasks.
I was at a turn and burn shop. For six months I was the lackey underling to 3 other designers... it was miserable. I changed it by using a pencil and the phrase "what if you?..." I'd either scribble on the rendering or do a thumbnail sketch on another sheet offering a generous critique of why the elements of the presented design didn't work. Some solicited some unsolicited. It worked out fairly well for six years.
To the suggestions of doing the layout on your own time ---
NEVER do that! Don't work for free. Rather do something that has a similar theme and incorporates similar design elements of a fictitious company or proposal for a friend. Perhaps something that could generate a new sale for you and the company, if you must.
Doing that, it's not a direct confrontation to the boss' offending layout. It shows your mad design skills and ideas that could also be incorporated into future projects, diplomatically. Then too, you've got a portfolio piece that you can share when you go out on a job search without any binding to your current employment. You're able to share a comparison between what was done and how you would have approached that same theme in a generic way.
Also, I kept my personal portfolio at work. Because I was able to get in front of customers, I used that to offer creative suggestions to new projects rather than the typical BIG and RED. That customer contact made me the default lead on a good portion of the incoming jobs. The few times that I was asked if I do work on the side, I was $10 more an hour than the shop rate.
Losing a weekend is more and more expensive the older I get - LOL
As it has many times been discussed on this board, you need to be the expert at what you do --- even as an employee.
...and to Gino's suggestion about redesigning a layout and your reply ---
Well, I've done this a couple times and I've gotten a really mixed bag of reviews. Sometimes hes appreciative and likes it, but most of the time he'll take it and change it back to where it was before.
That doesn't work. One can't hand off a layout without offering a critique as to why yours works better... design-wise, cost-wise, or some other compelling benefit and expect to sell it.
Barring any ability to change the situation internally, follow Rick's advice --- move on.
Just my .o2 - Good luck in your decision making!