-
Apr 28, 2008 8:10 pm US/Central
-
Digg |
Facebook |
E-mail
|
Print
Without Stock Options, UnitedHealth CEO Pay Drops
MINNEAPOLIS (AP) ―
The CEO of UnitedHealth Group Inc. saw his total pay drop 29 percent last year as he went without any new stock awards, according to a company filing on Monday.
Chief Executive Stephen Hemsley took in total pay worth $5 million, down from almost $7.1 million in 2006, according to an Associated Press calculation from the insurer's proxy statement. Hemsley got about $3 million in options the prior year.
The company said the decision to go without an equity award in 2007 came with Hemsley's agreement and "in light of the value of equity awards previously granted to Mr. Hemsley." He will own about 12 million shares within two months of April 9, according to the filing.
Based on UnitedHealth's share price so far, he didn't really miss out. UnitedHealth gave four other executives a major equity award on May 28, although it's not yet worth anything.
The company awarded $4.1 million in "stock appreciation rights" that behave like stock for Chief Financial Officer George L. Mikan, and almost $2.7 million each in the same award for three other top executives.
Those awards don't vest right away and their values fluctuate with the stock price. They're worthless unless UnitedHealth's share price rises above $54.41, its value on the date of the grant. On Monday UnitedHealth shares closed at $33.64.
Hemsley's base pay was $1.3 million, up from about $1 million the prior year. It's staying at $1.3 million for 2008 because it's already close to the median for other comparable companies, UnitedHealth said.
He also received incentive pay worth $3.6 million, some of which was paid in 2008 for performance last year. That was up from $2.8 million in 2006.
UnitedHealth said the result was that Hemsley's "total compensation was well below the median of CEOs at peer group companies."
Still, the company granted him incentive pay between one-and-a-half times and two times the targets they set for him because he met earnings goals and other operational and financial goals "in the face of challenging circumstances."
Hemsley took over as CEO in November 2006 after former Chairman and CEO William McGuire was forced out in a stock options backdating scandal.
The Associated Press calculations of total pay include executives' salary, bonus, incentives, perks, above-market returns on deferred compensation (which Hemsley did not receive) and the estimated value of stock options and awards granted during the year.
The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in their proxy statements.
(© 2008 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)