UnitedHealth CEO William McGuire is on his way out, derailed by controversy generated by a too-conveniently timed stock-option grant. In terms just announced this week, McGuire has agreed to leave his post as chairman of the company immediately and will step down as CEO as of December 1. McGuire, a physician who has been with the company 20 years, is one of a group of board members and executives implicated in the scandal, which touched on accusations that the company timed stock option grants improperly. The grants were allegedly structured to allow executives to exercise the options on extremely favorable terms, buying UnitedHealth stock at a drastically lower price than market value. McGuire, for example, holds options that would bring him over $1.6 billion if exercised today. To deflect legal problems, however, UnitedHealth is requiring McGuire and other execs to reprice the options at annual share high prices for the years involved. Given the SEC's impatience with this particular stock dodge, expect to see more departures from the UnitedHealth boardroom in coming months--especially among those on UnitedHealth's compensation committee.
To get more details on the UnitedHealth stock scandal:
- read this article [1] in the Minneapolis Star-Tribune
ALSO: UnitedHealth is not the only healthcare company accused of stock option hanky-panky of late. Article [2]
Links:
[1] http://www.startribune.com/535/story/744585.html
[2] http://www.modernhealthcare.com/article.cms?articleId=40855