UnitedHealth Group is one of the world's largest and most successful health insurance companies. But most of the media attention on the company in recent months has been on the compensation of its chairman and CEO.
Years of large stock option grants have combined with the company's strong stock performance to give Dr. Bill McGuire a portfolio currently worth $1.5 billion.
The Securities and Exchange Commission is reviewing option grants at UnitedHealth and other companies. The SEC is investigating certain decisions that can increase the value of options, and whether those choices were fully disclosed to shareholders.
The shareholder frustration was not enough to force any turnover on the company's board of directors. Four directors were up for re-election this year. Two, including McGuire, were re-elected with votes of 96 percent. Two others fared less well, with approval votes of 71 percent. Both sit on the board's compensation committee, which ultimately decides the size of McGuire's pay day.
UnitedHealth spokesman Mark Lindsay, speaking after the meeting, said changes in compensation and corporate governance the company announced the day before the annual meeting should address the recent concerns.
"There have been, clearly, reports in the media that have raised issues. We have listened and heard those things. I think we've made announcements on several occasions that talked about what kinds of modifications we're going to make," said Lindsey. "But the fact remains that there has been very, very strong support for the members of the board, and extraordinarily strong support for the company overall -- not only from shareholders but from our customers."
On Monday, UnitedHealth announced that McGuire would no longer receive stock options, and would forgo other perks such as health insurance in retirement and personal use of the company plane. Directors also voted to cut their own compensation by 40 percent.
I apologize that we find ourselves in the spotlight related to stock options at all.UnitedHealth CEO Bill McGuire
At the annual meeting, McGuire spoke to the crowd of around 200 shareholders about the direction of the company, particularly its goal to make basic health care available to all Americans. The company did not permit any recording of the address.
Near the end of his talk, McGuire offered an apology to shareholders, for "find(ing) ourselves in the spotlight regarding stock options at all. It is not what our customers, our shareholders or our employees deserve from me, or an organization with our values and our mission."
McGuire also apologized for the fact that he is unable to respond to the criticism and charges of questionable options granting practices. McGuire has said a committee of independent directors must issue its own findings on whether McGuire's stock option grants were proper.
One shareholder took McGuire to task over the options controversy. Former Minneapolis school teacher Larry Larson called the grants "obscene" and "excessive," and said he wished McGuire "many sleepless nights."
Larson's comment received substantial applause from the shareholders in the room. McGuire told Larson his comments had been heard and respected.
In front of UnitedHealth's headquarters, a dozen protesters chanted "Health care for everyone, now is the time!"
They carried signs with slogans like "Publicly funded health care for Minnesotans." One protester, Jay Pond, called UnitedHealth a "parasite" that stands in the way of a single-payer health care system.
"That building behind us pumps out about an inch of paper per client -- that's just administrative costs. And they pay their CEO $2 million to do that, and so we don't need that anymore in our health care," said Pond.
UnitedHealth officials say their ability to help customers keep a lid on health care costs has been key to the firm's success.
Inside the building, McGuire told shareholders the company's goals include lowering costs and creating a more efficient health care system. The vast majority of UnitedHealth shareholders, at least, gave the CEO their endorsement to continue pursuing that mission.