UnitedHealth Group Inc CEO
Total compensation: $31,298,553 for the year ended Dec. 31, 2016
Nonequity incentive pay: $4,908,500
Other compensation: $137,358
Exercised stock options: $10,776,000
Value realized on vesting shares: $14,176,695
New stock options: 118,270
Total 2016 shareholder return: 38.4 percent
Note: Hemsley took home 55.8 percent more in compensation than he did in 2015. The majority of that increase was from 200,000 previously issued stock options that he elected to exercise last year, after not exercising any options in 2015.
Those 200 options were originally granted in 2006 with an exercise price of $59.42 and had a grant date value of $3.1 million. Hemsley exercised those options in January 2016 as they were set to expire at a price of $113.30, realizing $10.8 million from the exercise.
During the 10 years Hemsley held those options UnitedHealth's stock had a total return of about 118 percent, more than double the performance of the S&P 500 index.
The company's stock continued to move upward throughout 2016 and had a total return of 38.4 percent for 2016.
Hemsley also earned a 33.7 percent increase in his annual cash incentive award as company revenue increased 17.7 percent for the year to $185 billion and the company's adjusted earnings per share increased 24.8 percent to $8.05 per share. The $4.9 million cash award included $4 million for 2016's performance and $900,000 for financial performance over the prior three years.
Hemsley's base salary rate of $1.3 million has remained unchanged since 2006. Hemsley was appointed CEO in November 2006 when the company booked $70.7 billion in revenue. In UnitedHealth's first-quarter results released last week, the company beat analysts' earnings expectations for the period and raised its guidance for remainder of the year. It expects to report 2017 revenue of about $200 billion.