Judge freezes UnitedHealth chief's stock options
Minneapolis — (AP) Millions of dollars in unexercised stock options and retirement benefits of outgoing UnitedHealth Group chief William McGuire were frozen by a federal judge on Thursday until 30 days after a company review of shareholder lawsuits is completed.
McGuire's final day on the job was Thursday.
Judge James Rosenbaum wrote there was no opposition to the freeze from any of the parties in the case. "There has been a showing that all parties to these matters will benefit from the requested relief," he wrote.
A company-sponsored report has concluded that many of McGuire's stock options were probably backdated, and the company has acknowledged that federal investigators are looking into the way it granted stock options.
UnitedHealth, the nation's second-largest health insurer, has said it will have to restate its earnings back to 1994.
California's public employee pension fund has filed a lawsuit over the company's handling of stock options. An attorney for the fund has argued that federal authorities could seize the money if a criminal case is ever filed.
Neither McGuire nor the company have been charged criminally, but UnitedHealth has acknowledged receiving a subpoena from the U.S. Attorney's Office in New York.
McGuire had $1.78 billion in unexercised stock options at the end of 2005. But the company's share price has dropped 25 percent since then, and repricing from the backdating controversy sliced off another $200 million.
McGuire's employment contract calls for a retirement benefit calculated by outside groups at $5.1 million a year, along with other perks.
Shares in UnitedHealth rose $1.50, or 3.15 percent, to close at $49.06 on the New York Stock Exchange.