One reason health care is so expensive
Posted on 12/09/2007 7:44:16 AM PST by Zakeet
In one of the largest corporate pay give-backs ever, William W. McGuire, the former chief executive of UnitedHealth Group, has agreed to forfeit at least $418 million to settle claims related to back-dated stock options.
The payback is on top of roughly $198 million that Mr. McGuire, an entrepreneur who built UnitedHealth, had previously agreed to return to his former employer.
The total — $618 million — includes money that Mr. McGuire will return as part of separate settlements reached yesterday with the Securities and Exchange Commission and UnitedHealth shareholders. The forfeitures are the first time regulators have successfully employed corporate governance rules put in place after the collapse of Enron that force executives to disgorge ill-gotten gains.
As part of the settlement with the S.E.C., Mr. McGuire will pay a $7 million fine and will be barred from serving as a director of a public company for 10 years. He will, however, be allowed to keep stock options valued at more than $800 million, including many that have been sharply criticized.
The developments are the most significant to date since federal regulators started looking into the backdating of stock options. More than 120 companies have come under scrutiny for granting options to executives on dates when the company’s share price was low, a tactic that guaranteed the maximum profit when the options were exercised.
The settlement comes a year after the furor over compensation forced Mr. McGuire’s resignation from UnitedHealth, the nation’s largest health insurer.
In a statement yesterday, Mr. McGuire said that he was pleased to put the controversy behind him.
(Excerpt) Read more at nytimes.com ...
One reason health care is so expensive
Business needs freedom to operate but never trusted to be ethical.
William W. McGuire built a great health care insurance carrier and his long term stock holders benefited, so did the insured.
His so called crime was accepting back dated options that had dates in the money if exercised. At the time most accountants and companies were recommending such back dating. Later, the SEC and go for headlines NY AG Stitzer decided backdating was a crime. McGuire was a victim of ex post facto law and I don’t believe that’s fair. A lot of company CEOs have been tarred this way.
I don’t think McGuire would have returned,in total, nearly one half of a billion dollars unless he was aware that he had engaged in unjustified enrichment.
The back dating of options is rewarding someone for something that wasn’t achieved.
It makes no difference that he successfully ran the company, that is what he was expected to do,or how much the stockholders gained during his tenure. He unjustly received one half of a billion dollars of stockholders’ money.
They need to get their priorities straight. Who are they in business to serve?
It’s guys like that who open the door for HillaryCare!
So, is Donna Shalala in on the action (on United board, former Clinton cabinet member, all around troll)
Hopefully their owners, the shareholders.
I’ll buy some stock. Then I will have paid for having a voice in the matter. ;)
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