UNH Pay Package

I may get flamed for this one.

A couple of readers chimed in on William McGuire's pay package at Unitedhealth Group (UNH). I don't own the stock and do not know all the details. Do I have it right that it could be as much as $1.6 billion, options may have been back dated without proper disclosure and the stock has been a 70-bagger since he has been at the helm?

If there was something illegal done it needs to be mopped in the right way. I have no idea about that and have no comment on the legality.

Whether he was overpaid or not is a value judgement, how much is too much? Of the $1.6 billion how much is from options granted when the stock was in single digits or lower? Split adjusted the stock traded below a dollar for more than six months. How much of the $1.6 billion is from that time? Has he ever sold stock before? Did he take entrepreneurial risk like Bill Gates?

There are more questions that could be asked. I don't know the answers, if you are interested in this news you may know the answer.

This is not something that is very high on my list of priorities of things to worry about. In a similar vane I don't pay much attention to insider sales. I do pay attention to peculiar CEO behavior. I have written about this point before. One thing that kept me out of Worldcom was Bernie Ebbers margin borrowing and subsequent margin calls. I took his use of margin to imply overly aggressive management not fraud, however.

Invariably things like pay packages have far more moving parts to the story than what gets reported. If I owned the stock I would know the answers to the above questions.

I stay away from insurance stocks because they are very complex business and all that is being sold (simplistically speaking) is peace of mind.