(UnitedHealth) McGuire leaving over stock options

[question everything]

McGuire leaving over stock options

David Phelps and Chris Serres, Star Tribune staff writers
Last update: October 16, 2006 – 12:22 AM

William McGuire, the Texas-born physician who transformed a struggling Minnesota HMO into the nation's second-largest health insurer, is out of his job today as chief of UnitedHealth Group, the latest and most prominent executive to go down over questionable stock options.

McGuire's departure was announced after a special meeting Sunday of the UnitedHealth board of directors in Washington. It was the climax of a months-long chain of events that had the corporate world and Wall Street wondering whether McGuire, 58, could survive the fallout over favorably timed stock options.

(snip)

His departure followed nearly seven months of corporate angst over the outcome of a special independent review into the way McGuire and other top executives at UnitedHealth timed and received lucrative stock options that translated into millions of dollars of quick profits over the past several years. The board also announced Sunday that McGuire and Hemsley would be repricing their stock options through 2002 at the annual share price high for each year "to eliminate any possible financial benefit from options-related issues."

McGuire's current balance of unexercised options was valued at more than $1.6 billion at the end of last year. By repricing those options at a higher level, the net profit will be considerably less, if one exists at all, given the company's recently sagging stock price.

(snip)


http://www.startribune.com/535/story/744585.html

[Lasher]

1. The BOD needs to be replaced but they won't

How is it that executives were allowed to time and price their own options? If this is a typical BOD, they were complicit in the scam. $1.6 billion, with a B!!!! Hokey smokes!

[rodeodance]

2. the job of the Board is to ensure all stakeholds get money.

[Lasher]

5. Yes, and they fail in that duty when they help the CEO skim the profits

BODs are really unaccountable to shareholders most of the time, and they empathize with the CEOs and other senior executives because they are often themselves CEOs at other companies. Often there are board interlocks that promote quid pro quo cronyism.

When BOD members are 'elected' by shareholders there is typically only one choice to make. There is only one candidate for each position and you can vote for them or not. And who picks these candidates who go on the ballot? Most of the time it's the CEO. Go figure.

I hope you don't fall for that crap about having to compensate CEOs like we do, in order to be able to recruit that high caliber of talent.

[ikojo]

3. Boo freakin' hooo.....He made his money and I

think he's still guaranteed a lifetime salary and benefits in the event of termination. I used to work for them and I recall reading something like that in the annual report they sent to stockholders (as an employee I had some stock in my 401k). I shed NO TEARS when a corporate exec loses their job.

It's not like he's going to be on welfare anytime soon.

Karma..sucks doesn't it?

[ikojo]

4. At one time Walter Mondale served on the United

Healthcare board of directors. Not that I had a very favorable opinion of him, but when I saw his name in one of the annual reports, his favorabiiity went down SEVERAL notches.

[question everything]

7. Interesting. One would hope that Democratic leaders

would be the first to condemn for profit health care.

It was the WSJ that first broke the story and it was the WSJ that observed that UnitedHealth does not provide any health care, but, rather, just shuffling paper.

For me the obscenity was not so much the stock option back dating, but the fact that so many cannot afford access to health care, that part of the reason why health care climbs faster than the rate of inflation is that uninsured people wait long and go the emergency room. Meanwhile, this Doctor McGuire pulls million of dollars in compensation.

How nice it would have been had Mondale, as a director, insisted that, say, 1% of the gross profit was set aside to provide health insurance, or, at least, a subsidized one, to the poor who cannot afford one?

Again, this is our tax money that is used for Medicaid. Our tax revenue could have extended to, say, fix roads and bridges had the Wal-Mart and the UnitedHealth of the world cut their profits a bit to provide a basic health care for more people.

I don't even know that this would have hurt the pockets of the shareholders; after all, these costs would be expensed.

I don't have problems with health care providers; physicians, nurses, technicians, even hospital administrators - making money off health care. But for paper shufflers, this is obscene.

[Demeter]

6. The Culture of Corruption Started Here: Corporations

The corporate officers have been bleeding American business dry to enrich themselves and their buddies and to put corporate tools like Reagan, Bush, and their cronies into public office to suck dry the rest of the country.

There isn't a whole lot left to drain off--they're all going to have to find another country to suck dry. Too bad Iraq turned out to be such a bad choice of first target!