Shareholder Forum for Options Policies

Forum Home Page

Options Policies Home Page

Program Reference



The letter below was distributed in support of the shareholder proposal which had been offered by Hermes as an example for U.S. adaptation of advisory voting practices at the Forum's December 6, 2006 open meeting.



Lloyds Chambers


1 Portsoken Street


London E1 8HZ


United Kingdom



Tel:    +44 (0)20 7702 0888


Fax:   +44 (0)20 7702 9452



8 May 2007                        


Dear fellow UnitedHealth shareholder:


We urge you to vote FOR Shareholder Proposal No. 3 at the annual meeting on Tuesday May 29, 2007.


As an institutional investor with a long-term interest in UnitedHealth, Hermes Investment Management Ltd is proud to sponsor this Shareholder Proposal, which we view as an important governance reform.


Hermes’ proposal, which is set out fully in UnitedHealth’s proxy statement, asks the Company to permit shareholders to cast a vote each year on the overall compensation package for the Company’s most senior executives.  Any such vote would be non-binding and advisory, but we believe that it would foster an important dialogue between shareholders and the board of directors about executive pay policy, and help ensure that pay is closely tied to performance.


Hermes has had experience with advisory votes on compensation in the UK, as well as in Australia, and with binding votes on compensation in Scandinavian countries and the Netherlands.  That experience has been overwhelmingly positive.  Such a vote has fostered collaborative and cooperative engagement between investors and companies, which, in turn, has led to improved accountability to shareowners and more effective compensation structures.


Compensation programs are one of the most powerful tools available to a company to align management interests with the long-term interests of shareowners.  UnitedHealth Group has, in the past, experienced issues with its incentive-based compensation and accountability to shareowners in that regard.  This is evidenced by the fact that options granted to our former Chairman and CEO were worth $1.6 billion by the end of 2005, a value that was inflated due to the backdating of stock options.  We believe that an advisory vote on compensation would serve to address these concerns and ensure that pay is appropriately linked to performance going forward.  We feel that this would benefit shareowners by improving value.


Hermes urges you to vote FOR Shareholder Proposal No. 3.


Sincerely yours,





Mark Anson, Chief Executive


This is not a proxy solicitation, and Hermes will not accept any proxies.  Please return all proxies directly to UnitedHealth Group.


Registered in England No 2466043  Registered office as above

Authorised and regulated by the Financial Services Authority





This Forum program is open, free of charge, to all shareholders of the invited corporate participants, and to any fiduciaries or professionals concerned with the investment decisions of those shareholders, according to the posted Conditions of Participation.  The Forum's purpose is to provide shareholders with access to information and a free exchange of views on issues relating to their investment interests described in the Forum Summary As stated in the Conditions, all Forum participants are expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

This Forum program has been organized with the support of Hermes Equity Ownership Services, Ltd.  It is the first in an expected series that will be managed by a not-for-profit “Institute” to be established for the purpose of continuing the Forum programs conducted by Gary Lutin.

Inquiries and requests to be included in the Forum's distribution list may be addressed to  The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material.

All material on this web site is published by Gary Lutin, who is responsible for conducting the Forum.