CalPERS seeks limits on UnitedHealth CEO
The California Public Employees’ Retirement System wants to freeze the retirement package of UnitedHealth Group Inc.'s outgoing chief executive, William McGuire, who is leaving amid alleged abuses involving the stock option practices.
CalPERS, the lead plaintiff in a shareholder suit against UnitedHealth, wants a federal court to impose a string of financial restrictions on McGuire, including a freeze on his retirement benefits. The requests are in court papers the pension giant filed last week in Minnesota.
McGuire, 59, one of the highest-profile executives caught up in the widening option backdating scandal, is set to step down as UnitedHealth’s CEO by Dec. 1 after an internal report over the company’s option practices.
The Minnetonka, Minn.-based company said Oct. 16 that an internal probe showed that option grants probably had been backdated for 12 years. Backdating involves inflating the value of options by dating them when the stock price was at its lowest in a particular period. The practice can be illegal if it isn’t disclosed to shareholders.
UnitedHealth shares have slumped 21% this year amid fears over the fallout from option abuses.
McGuire “was personally involved in nearly every aspect of the stock option backdating scheme,” CalPERS said in the court filing.
McGuire’s attorney, David Brodsky, said he was preparing a response to CalPERS’ motion.