A U.S. District Court judge in Minnesota maintained a freeze on about $800 million in options owned by William McGuire, former chairman and chief executive officer of UnitedHealth Group. Shareholders, led by the California Public Employees Retirement System, asked that the options remain frozen pending its lawsuit, expected to move forward in the summer of 2008.
Earlier this month, McGuire reached settlements with UnitedHealth and the Securities and Exchange Commission whereby he forfeited about $600 million in options and benefits to the company and paid a $7 million fine to the SEC. McGuire stepped down from UnitedHealth effective December 2006 amid a stock backdating scandal.
McGuire, who led the Minnetonka, Minn.-based insurer for 16 years, still has about 24 million options unaffected by the scandal, worth about $800 million. In his ruling to extend the options freeze, U.S. Chief District Judge James Rosenbaum wrote that McGuire offers no specific need for ready money.
McGuire became the poster child for excessive executive compensation when it was revealed last year that he could walk away with $1 billion in total compensation. Words such as huge, fantastic, astounding, staggering or astronomical do not describe $1 billion, Rosenbaum commented in his court order. Such a sum can only be thought of as transcendent, or in terms of the gross national product of smaller members of the United Nations. -- by Rebecca Vesely
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