The Minneapolis Star Tribune reported that US District Judge James Rosenbaum took the step at the request of the California Public Employees Retirement System (CalPERS), which did not want McGuire to dispose of those assets before stock option backdating lawsuits could be resolved (See UnitedHealth, Barnes & Noble Hit with Options Dating Lawsuits ).
In addition, negotiations between McGuire and the company over his final severance package are frozen under Rosenbaum’s order. McGuire’s last day as CEO of UnitedHealth is Friday. According to the newspaper, his proposed severance package provides him with a $5.1 million annual pension and a $6.4 million lump sum payout.
The shareholder lawsuits claim that investors lost value because of the backdated options. The newspaper said UnitedHealth has appointed a special committee to review the lawsuits and recommend to the board how to proceed. The panel consists of former Minnesota Supreme Court Chief Justice Kathleen Blatz and former justice Edward Stringer, according to the Star Tribune. The freeze on the retirement package and on McGuire’s unexercised stock options is in effect until 30 days after the Blatz-Stringer panel makes its recommendation to the UnitedHealth board.
The company is also in the process of restating earnings for the past 11 years because of its options program. The value of its stock has declined 22% this year, in part because of the options backdating cloud, the newspaper said.
According to the company’s proxy statement, McGuire had unexercised options worth $1.6 billion at the end of last year. He has since agreed to reprice those options which reduced their value by $200 million (See UnitedHealth Governance Actions Prompted by Backdating Scandal ). McGuire is only one of a long string of corporate officials forced out at companies ensnared in the backdating scandal (See Corporate Carnage Continues in Stock Options Scandal with Monster Firing ).