A large managed care company says it is serious about trying to maintain reasonable compensation levels for directors and senior executives.
UnitedHealth Group Inc., Minnetonka, Minn., has tried to make lasting, institutional changes by requiring that all members of the board audit committee be financial experts; limiting company directors to serving on 6 boards; and establishing a board committee that will focus on public responsibility.
The company also has discontinued stock-based awards for the company’s most senior executives, including Dr. William McGuire, the company’s chairman; capping supplemental retirement plans for executive officers; and eliminating perks such as life insurance and disability insurance premium payments for the most senior executives.
In another move, UnitedHealth has eliminated severance compensation in connection with change-in-control transactions for the most senior executives.
In recent years, California consumer advocates have complained about managed care acquisitions that have triggered huge payments of severance benefits to executives.
Still other changes include elimination of company-funded post-retirement health insurance for McGuire and another top executive and a 40% reduction in board compensation.