Shareholders warn insurer
UnitedHealth defeats 'say on pay' proposals, but resolutions
do get significant support
Article Last Updated: 05/29/2007 09:40:52 PM CDT
UnitedHealth Group shareholders on Tuesday voted down proposals by investor
groups aimed at giving more voice to shareholders on executive compensation
and board nominees. Company-backed proposals, meanwhile, won broad support.
the investor-sponsored resolutions were defeated, they did capture a
significant percentage of the votes.
by the California pension fund Calpers to allow shareholders more say in
electing board members received 42 percent, which is among the highest
percentages of any shareholder proposal around the country this year.
proposal asked the company to allow stockholders who have held at least 3
percent of the company's stock for over two years to nominate two directors
to management's election ballots.
meeting, held at the Minneapolis Convention Center, was almost sedate
compared with last year's shareholders' meeting, when the Minnetonka-based
health-insurance giant was in the beginning stages of a scandal over the
backdating of stock options.
"This is a
huge message loud and clear to UnitedHealth," said Clark McKinley, a Calpers
spokesman. "We are hopeful they will take note of it." The vote was
supported by the California State Teachers' Retirement System, which also
joined Calpers in backing a similar proxy-access proposal at Hewlett Packard
in March that received 39 percent.
that sought an advisory vote for shareholders on executive compensation at
UnitedHealth received 39 percent.
sought to align the vesting of a portion of equity grants to executives with
performance goals received 41 percent. A proposal to rein in special
retirement benefits for executives sought by the Massachusetts Laborers'
Pension Fund gained 29 percent of the vote.
percentage is slightly lower than the votes in favor at other companies
where the proposal has been put forward, said Richard Metcalf, director of
corporate affairs for Laborers' International Union, who spoke at the
meeting on behalf of the Massachusetts pension fund. He attributed the lower
figure to the number of corporate-governance policy changes UnitedHealth has
put in place over the year.
UnitedHealth's board recommended votes against all four of the investor
proposals. While the resolutions ultimately were defeated, investors did
approve company-designed proposals aimed at increasing the board's
accountability to shareholders.
at UnitedHealth Group is gratified by the strong shareholder support for the
company and the solid progress we have achieved in the past year in
corporate governance," Richard Burke, UnitedHealth's chairman of the board,
said in a statement.
those proposals, shareholders agreed to require a majority vote for election
of directors as opposed to a plurality vote that had been required in the
past and provide for an annual election of all directors. They also agreed
to eliminate supermajority provisions for the removal of directors and other
year's meeting, about 350 shareholders jammed into a wide commons area at
the company's headquarters, many to grill former Chairman and Chief
Executive William McGuire about the backdating issue. To get in,
shareholders had to first pass through metal detectors. Security guards
searched bags. Reporters were instructed not to talk to shareholders and
were corralled into an out of the way room until the meeting began. After an
independent law firm disclosed in October that it had found evidence of
stock-option backdating, McGuire stepped down. Backdating occurs when
stock-option grant dates are altered retroactively to coincide with
advantageous stock prices. Regulatory and criminal investigations into the
scandal are ongoing.
about 65 people attended the annual meeting with about half of those being
UnitedHealth Group employees. They listened to investor groups speak on
behalf of their proposals and to a quick overview of company strategy from
Chief Executive Stephen Hemsley.
Shareholders also voted to re-elect to the board of directors: William
Ballard, Burke, who remains chairman, and Hemsley, and approved the
appointment of Robert Darretta, retired vice chairman and chief financial
officer of Johnson Johnson, who is a new director.
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