Dec 1, 2006 11:24 am US/Central
New CEO Takes Over At UnitedHealth
Shuffles Top Executives
Minneapolis (AP) ―
A new chief executive took over at UnitedHealth Group Inc. on Friday, a day after former chief executive William McGuire left the nation's second largest insurer amid questions about the backdating of stock options.
Stephen J. Hemsley's new role as the top executive had been announced earlier. He has been the company's president and chief operating officer since 1999.
Analysts have said his rise signals the board won't significantly change the direction of the company.
"Steve has proven himself to be the right leader for the company at this important time," said chairman Richard T. Burke in a news release. "The board is pleased with the rapid progress he is making on our recent initiatives to further improve corporate governance."
Hemsley announced a shuffling of the company's top executives into what he called an "expanded management structure" that will "operate in a more collaborative, open fashion as a leadership team."
He takes over a company that has grow rapidly in recent years, but in the past months has been battered by investigations into allegations that it backdated stock options for executives. Shares in the company have fallen 15 percent from 52-week high of $64.41.
Shares in UnitedHealth fell 9 cents to close at $48.99 on the New York Stock Exchange.
In October, a company-sponsored investigation concluded that options awarded to McGuire and others were probably backdated, which means they weren't really issued when the company originally said they were. Backdating options can give recipients a larger profit than they otherwise may have gotten.
The company has said it will have to restate its earnings back to 1994. The company has said Hemsley has agreed to give up a major stock option award that had been suspended and then reinstated in 2000. It disclosed no such agreement with McGuire.
Among the executive changes announced Friday:
Richard Anderson will become president of the new Commercial Services Group, which includes specialized care services, financial services and Ingenix, UnitedHealth's health care information and research business. Anderson is currently executive vice president of UnitedHealth Group.
Lois Quam, currently chief executive officer of Ovations, UnitedHealth's division catering to older people, will become president of the new Public and Senior Markets Group. She will also become the company's chief spokeswoman on corporate social responsibility programs and health care issues.
David Wichmann, president and chief operating officer of UnitedHealthcare, will become president of the new Individual and Employer Markets Group.
William Munsell, who oversees Specialized Care Services, and Anthony Welters, the top executive over AmeriChoice -- which sells supplementary care to those on government health care programs -- are being appointed as executive vice presidents and will report directly to Hemsley.
Dr. Reed Tuckson was named head of medical affairs.
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