Administration July 30, 2007

Options Disposal Bar Against McGuire Extended to Oct.

July 30, 2007 (PLANSPONSOR.com) - A federal judge on Monday extended until mid-October his order barring a former CEO of UnitedHealth Group from cashing in unexercised stock options while shareholders' lawsuits over the company's options award practices continue moving through the court system.
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Because U.S. District Judge James Rosenbaum’s previous directive had been set to expire Monday, the Minneapolis-based jurist extended it to October 15 while a special litigation committee created by the UnitedHealth board completes its study of a raft of options-related lawsuits, Reuters reported (See    Judge Freezes McGuire’s Unexercised Options ).

Rosenbaum’s order applies to William McGuire, who stepped down as UnitedHealth chairman and chief executive last year following an internal report by the insurer that concluded many of his option awards were likely backdated.

McGuire, one of the highest-profile executives caught up in the U.S. options backdating scandal, had accumulated more than $1.6 billion in stock options by the end of 2005. Following the internal report, he agreed to reprice some of those options, reducing their value.

Rosenbaum’s earlier order also temporarily froze McGuire’s retirement pay, reportedly $5.1 million a year. However, Rosenbaum’s latest order allows the company to   pay McGuire up to $3 million out of the ex-CEO’s executive savings plan while the freeze remains in effect, the Reuters report said.

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