Following a series of 2006 reports in The Wall Street Journal on options backdating, the SEC, IRS and, and U.S. Attorney's office began investigating UnitedHealth and more than 100 other companies.
Dr. William McGuire, CEO and chairman, ran UnitedHealth Group (NYSE: UNH) for 15 years, turning what was then a regional insurer into the nation's second-largest managed health care company. Like many companies in the 1990s, UnitedHealth rewarded its chairman and CEO with options to buy company shares at a fixed price. McGuire was allowed to choose the dates for his option awards, and the crux of the backdating accusation is that, to boost the options' value, he picked a date in the past when the share price was lower and signed papers as if he were granted the options on that earlier date.
Due to his involvement in the stock options scandal, McGuire stepped down in late 2006. He was the highest-profile corporate chief caught in the probe.
After months of mediated talks between McGuire and a "special litigation committee" of two former Minnesota Supreme Court justices appointed by UnitedHealth's board, McGuire agreed earlier this to repay $468 million, as a partial settlement of the backdating prosecution, including giving back $320 million in stock options and forgoing more than $99 million in other retirement and executive savings benefits he received from 2003 through 2006. He had already agreed to reprice some stock options, reducing their value by another $200 million, as well as giving up use of the company plane and his company-funded life and health insurance.
The settlement includes a $7 million civil penalty. A review by the U.S. Attorney for the Southern District of New York is still outstanding. More than $800 million in McGuire's other stock options remain frozen by court order, pending a class-action suit.
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Reader Comments (Page 1 of 1)
12-21-2007 @ 8:13AM
bob thompson said...
Let me get this straight. He gave up over $600 million in this agreement but still has over $800 million left to "freeze"? My heart is bleeding, and my stomach is turning.
12-21-2007 @ 8:46AM
jaba said...
As a health care provider who has to "fight" for reimbursement for services that I render to my patients, I want to see this individual punished severly. His personal greed is what has driven up health care costs, as well as half of the needless drugs that are prescribed only because the MD has a quota to meet based on the Drug Rep's incentives for freebees!
12-21-2007 @ 9:28AM
Matt Shankweiler said...
Bob Thompson is right. Bill McGuire still has unreal money even after settlement on much of the litigation. It just shows how much is bilked off the American consumer by these PPOs. My health insurance is through a United HealthGroup company and they wanted to ding me $11 for a simple blood test as part of a routine physical yet they can pay their former CEO over $100 million per annum (2006 salary+bonuses). Its ridiculous!!
12-21-2007 @ 10:37AM
Marie Drais said...
This man's greed is astounding. He should be so ashamed.
12-21-2007 @ 10:50AM
ssabja said...
McGuire should go to prison. He is a slime ball and he is what's wrong with this country's healthcare system.
12-21-2007 @ 1:56PM
Don Wise said...
Rewarded by the company for the bottom line BUT...This creep is the head of a (so called) "Health care Company" that has fought me every step of the way on paying for meds prescribed for my sleep disorder and even said that the Dr. that I've gone to for 17 years was NOT in their network and I'd either have to change or pay out of my own pocket (which I do!).
They put the physicians and health care workers through scads of paperwork and phone calls with the idea that sooner or later either the Dr.'s office or the patient will give up.
The idiocy of not paying for the prevention but covering the last gasp heroics of radical surgery or long hospital stays must be quite profitable.
They and others of their ilk are the epitome of white collar criminals in this country. There isn't any human element in their greedy, inhuman being and losing his WHOLE misbegotten fortune is but one way to begin to hold these scum responsible!
1-01-2008 @ 11:02AM
ghat said...
Bravo!
12-21-2007 @ 2:50PM
Frank said...
I wonder how the rest of the employees of United feel about this? How much of that agenda (greediness) has rubbed off on them? I know of physicians that have opted out of working for such an organization. Unfortunately, universal health will not be the easy way out. Somebody always pays. It will be us,the taxpayers responsibility. Don't be surprised at the end.
12-27-2007 @ 11:46PM
issy said...
Profiting off of someone else's misery should be a crime. This one person's greed is astonishing and a real indicator of the biggest problem in the world - the few individuals who believe they deserve it all. They screw the workers who make things happen for them.
It's time to shame this man. The paparazzi should be following him around constantly. His lifestyle should be up on billboards for all to see - "Your Health Care Dollars At Work!"
12-28-2007 @ 10:10AM
Chilla said...
I am a physician. And I must say McGuire has done more to damage health care in this country than any other person or policy in history. UnitedHealthCare obstructs patient care through deliberate policies designed to prevent patients from getting the care they need in order to enrich nefarious people like McGuire. He represents the worst of corporate America. His greed is matched only by his arrogance. I only hope that one day he falls victim to the health care system he has destroyed.