UnitedHealth reveals details of option back-dating settlement

Anne Zieger — Mon, 01 Dec 2008 10:52:32 -0500

In a new SEC filing, UnitedHealth Group has finally revealed some details of its previously-announced resolution to the class-action settlement shareholders filed over stock-option backdating by executives. The SEC filing shows that the shareholder group, led by the California Public Employees' Retirement System, has pushed UnitedHealth to make changes to its corporate governance policies, in addition to those it had made previously (though the SEC filings don't say what those changes are). UHG had already paid $895 million into a fund for CalPERS and the other plaintiffs, while admitting no wrongdoing.

The scandal originally dates to the tenure of former CEO William McGuire, who was forced to relinquish $400 million of the staggering $1.6 billion fortune he amassed there when it was revealed that he had allegedly engaged in back-dating of stock options to get the best possible price for them.

To learn more about the UHG settlement:
- read this Modern Healthcare piece (reg. req.)

Related Articles:
UnitedHealth settles securities suit for $895M
UnitedHealth CEO ousted
UnitedHealth's McGuire gives up $400M in assets

UnitedHealth settles securities suit for $895M

Anne Zieger — Thu, 03 Jul 2008 11:34:07 -0400

UnitedHealth Group has agreed to settle a federal securities class-action lawsuit brought by a group of major shareholders for $895 million. The move, coming at a time of financial challenges for the health plan industry as a whole, should have a big impact on UnitedHealth's operations. The company will cut 4,000 jobs and is warning of weaker profits, already challenged by the slow U.S. economy and higher Medicare costs.

The lawsuit was brought by the California Public Employees Retirement System (CalPERS) over the health plan's stock-option grant practices. Such practices had helped lead to the departure of previous CEO William McGuire, who resigned in December 2006 over the scandal that arose when the company's practice of backdating options to favorable dates was discovered. The proposed settlement will impose new protections against such skullduggery, including a mandated holding period for options granted to execs and shareholder approval of any stock option re-pricing.

To learn more about the proposed settlement:
- read this Modern Healthcare article (reg. req.)

Related Articles:
UnitedHealth's CEO ousted over questionable stock options
UnitedHealth's McGuire gives up $400M in assets
AMA tries to block UnitedHealth acquisition