William McGuire's landmark settlement of more than $600 million with UnitedHealth Group, Minnetonka, Minn., and the Securities and Exchange Commission, if approved by a court, will cut the remaining ties between the former chairman and chief executive officer and the company he ran for 17 years. Both McGuire, the former chairman and chief executive officer, and UnitedHealth face ongoing investigations or legal action from the Justice Department, the Minnesota Attorney General and shareholders. The SEC also continues to have an open investigation into UnitedHealth.
UnitedHealth announced that an independent panel made up of two former Minnesota Supreme Court justices had concluded its review on the matter and reached a settlement with McGuire along with several other former top executives. Under those terms, McGuire will surrender 9.2 million company shares worth about $320 million. He will also give up his retirement pay worth about $91 million and executive plan savings of $8 million. McGuire already agreed to forfeit $200 million in options.
That agreement satisfies an enforcement action by the SEC against McGuire, whereby he agreed to give back these suspect options to his former employer, along with paying a $7 million civil penalty. The SEC settlement, in which McGuire admitted to no wrongdoing, is the first with an individual under the Sarbanes-Oxley Act to deprive corporate executives of profits and bonuses while their companies were misleading investors.
McGuire resigned effective December 2006 after an internal review showed he likely picked the most profitable dates to price some of his options retroactively. I am very pleased to have reached a resolution that puts these matters to rest, McGuire said in a written statement. -- by Rebecca Vesely
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