It's not just about William McGuire (photo) anymore. Now it appears that stock options drama will have a much greater impact, forcing the company to restate earnings all the way back to 1994. True, the outgoing UnitedHealth CEO agreed to reprice his personal stock options, cutting about $200 million in value from his staggering $1.78 billion haul. Incoming CEO Stephen Hemsley has agreed to forfeit $190 million on options he holds, as well. In a recent release commenting on the repricing, McGuire's attorneys bragged that the company had grown 8400 percent during his tenure, which apparently makes the stock option skulduggery OK. I don't know about you, but I think McGuire's management track record has little to do with whether his options were improperly backdated, or what--if anything--should be done to punish him. But then again, I'm not on his payroll.
UnitedHealth had previously estimated that stock option-related charges would cut $286 million from reported earnings for 2003 through 2005. Now, executives say that that losses will be "significantly higher," though they haven't yet named a figure. In an apparent response to these ongoing troubles, the company's CFO has been moved out of his job into as-yet-unspecified new duties.
To get the latest details on the options scandal:
- check out this Wall Street Journal piece (sub. req.)
- read this Associated Press article
- see Dr. McGuire's statement