Crooked CEO gives back $600 Million
Posted by Michael F at 12/7/2007 1:32 PM and is filed under Health Insurance,Health Insurance Companies 
The UnitedHealth Group’s former CEO resigned about one year ago. William McGuire, 59, resigned from the position of CEO of one of the largest health insurance providers after pressure rose from an ongoing investigation. The CEO and chairman of the board settled with the Securities and Exchange Commission under a violation of the Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act was created after the Enron incident to prevent accounting scandals. McGuire received stock options which he back dated. Back dating stock options is illegal because it does not use current stock prices. McGuire’s paycheck was nicely padded from the backdating of the stock options. As a result, he will have to pay back over $600 million to UnitedHealth. At one point, McGuire shares were valued at $1.6 billion. The stocks were backdated to 1997, 1999, and 2000, the companies stock fell to annual lows during these three years which offered McGuire a colossal opportunity to take advantage of the company.
UnitedHealth serves over 71 million people across the country. In total, they will receive over $600 million from McGuire. UnitedHealth has grown immensely since McGuire stepped up as CEO in 1989. Previously just a regional healthcare company, UnitedHealth grew to a nationwide company over the years. Recently they acquired PacifiCare the California based company for $9.2 billion. The deal transitioned well, PacifiCare held onto its name and most customers did not notice a change. The acquisition expanded UnitedHealth’s market share of Medicare which continues to rapidly grow.
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