Facing mounting criticism over its executive compensation, UnitedHealth Group, Minneapolis, announced several changes to its corporate governance policies. The insurer's board of directors implemented new share-ownership guidelines for officers and directors and a new requirement that all members of the company's audit committee be financial experts. It also limited the number of boards on which directors may serve; appointed co-presiding lead directors for executive sessions; and established a requirement that all board members attend director's education sessions. The board said it will recommend that shareholders vote at UnitedHealth's annual meeting May 2 to declassify the company's board of directors and remove supermajority approval requirements. In addition, the board said that on May 1 it will act on a number of compensation-related changes proposed by UnitedHealth Chairman and Chief Executive Officer William McGuire last week.
UnitedHealth is under scrutiny for its stock-option granting practices, which have allowed McGuire and a number of other company executives and directors to amass billions of dollars in unrealized gains. The announcement comes amid ongoing discussions between UnitedHealth and the California Public Employees' Retirement System. CalPERS has threatened not to vote to re-elect McGuire and two other UnitedHealth board members if the company does not make certain changes to its compensation, governance and disclosure practices. -- by Laura B. Benko