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CEO pay watch: UNH's Hemsley: $5 million
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UNITEDHEALTH GROUP INC.
Stephen Hemsley, president, CEOTotal compensation: $5,029,838 for the year ended Dec. 31
Salary: $1,300,000
Non-equity incentive pay: $3,635,000
Other compensation: $94,838
Total return to shareholders: 8.3 percent
Note: Hemsley's compensation was up 25.7 percent, mainly because of a 27.5 percent increase in base salary and a 26.4 percent increase in nonequity incentive pay, reflecting promotion to CEO in November 2006.
Some aspects of his total compensation have changed because of the company's options backdating issues and his agreement with the company. For example, the company expensed $8,134,691 worth of option awards in 2007 but they were previously issued options repriced with higher exercise prices. He was awarded no new options last year, nor did he exercise any previously issued options last year.
Hemsley and the company agreed to cap his supplemental executive retirement plan at $10.7 million in light of previously issued options he holds. That amount otherwise could have grown.
For 2008, the compensation committee made a number of changes to executive compensation. It changed the company's peer group for benchmarking purposes; changed the performance criteria for an annual cash incentive and adopted changes to its long-term equity awards policy. The compensation committee also engaged an outside professional services firm to conduct regular testing of compliance with controls relating to the equity award processes.
PATRICK KENNEDY
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