Ordinarily a day when a major company reports quarterly earnings that blow away expectations is a happy day indeed. Wall Street generally sits up and takes notice. Analysts rethink their positions. Individual investors consider placing new bets. Unfortunately for the management at UnitedHealth Group, things are not working out quite that way today. Net income is up 21 percent over a year ago this quarter on the PacifiCare acquisition and the company's sizzling Medicare Part D business (4.5 million new customers).
But faces are likely to be long and stay that way this week. The reason? The Wall Street Journal's front page story challenging CEO Dr. William McGuire's billion-dollar option package, the latest in a series of critical pieces by the paper that focusing on the company's finances. The news that one of the most respected name in business journalism is singling out a CEO at a dominant healthcare company as a poster boy for corporate greed was not warmly received by the markets. UnitedHealth Group shares headed south on the news, falling $1.71 in morning trading.
- read this article [1] from The Wall Street Journal (sub. req.)
- see this article [2] on McGuire's response (sub. req.)
Links:
[1] http://online.wsj.com/article/SB114532417401928300.html?mod=health_home_stories
[2] http://online.wsj.com/article/SB114535678872828530.html?mod=health_home_stories