May 22, 2019

Another Chapter in Bill McGuire's Stock Options Saga

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Brian S. King
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Today's N.Y. Times has the story of William McGuire's agreement to settle with the Securities and Exchange Commission and with UnitedHealth shareholders claims they have asserted against him arising out of his backdated stock options. Including amounts he agreed to pay back last year, the total amount he is forfeiting is $618 million, including a $7 million fine to the SEC. The article notes that he will keep stock options valued at more than $800 million. The SEC's inquiry of UnitedHealth (as opposed to McGuire) continues. Advocates for more accountablility in executive compensation hail the settlement as a great thing and that it is. It adds momentum to efforts against other corporate executives and companies who have likewise improperly backdated stock options to effectively guarantee windfalls to top executives. But I am left wondering if the results of these claims against McGuire will be deter this type of behavior by other corporate highflyers in the future. After all, the net result of the settlement is that McGuire gets to keep significantly more in stock options from UnitedHealth than he has to pay back. Just based on those options alone, McGuire's compensation, $800 million, is beyond comprehension.

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