UnitedHealth's headquarters in Minnetonka, Minnesota. Credit: UnitedHealth
UnitedHealth Group continues to deal with the repercussions from the murder of UnitedHealthcare CEO Brian Thompson in December. The insurance giant is asking shareholders to approve a $60 million stock option award for new CEO Stephen Hemsley.
Hemsley. who was appointed after former group CEO Andrew Witty resigned in mid-May, previously led the company from 2016 to 2017. His contract stipulates that he will receive an annual salary of $1 million and a $60 million stock option after three years as CEO.
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Christopher Zaetta, UnitedHealth’s chief legal officer, sent a letter to shareholders on Wednesday, encouraging them to approve the compensation package. “The compensation committee carefully designed a compensation package that was reasonable, provided the appropriate incentives for Mr. Hemsley and strongly aligned with shareholder interest,” the letter said.
Because much of Hemsley’s net worth is invested in the company, he would have a strong incentive to remain in his position, Zaetta wrote. Hemsley purchased an additional $25 million in shares after accepting the appointment, “further signaling his commitment to and stake in building long-term shareholder value,” the letter said.
Institutional Shareholder Services, a proxy advisory firm, has advised shareholders not to approve the proposal. Because most of Hemsley’s compensation will be in stock option awards, it said, he could enjoy a “windfall” because of fluctuations in the stock price. However, the proxy advisory firm Glass Lewis recommended that shareholders approve the compensation package.
These types of “say-on-pay” votes, while enabling shareholders to weigh in with their opinions, are not binding. The deadline for voting is before UnitedHealth Group’s annual meeting on June 2.
The change in leadership comes at a tumultuous time for UnitedHealth Group. Witty resigned after the company reported a poor financial outlook in its 2025 forecast and after the company was sued by a group of investors over misleading forecasts following the Thompson’s death Witty and CFO John Rex were named as codefendants in the lawsuit.
Company shares fell by 22.4% on April 17, wiping out about $119 billion of market value, after the insurer cut its 2025 forecast for adjusted profit to between $26 and $26.50 per share. Witty largely blamed federal policy changes and said UnitedHealth was urgently working to fix the problems, but it was the company’s biggest one-day stock fall in more than a quarter-century.
UnitedHealth also has suspended its 2025 outlook as care activity continued to accelerate while also broadening to more types of benefit offerings than seen in the first quarter. In addition, the medical costs of many Medicare Advantage beneficiaries new to UnitedHealthcare remained higher than expected, according to a release. The company expects to return to growth in 2026.
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
