Friday, December 07, 2007
A First
And hopefully not the last time this will happen.
In one of the largest corporate pay give-backs ever, William W. McGuire, the former chief executive of UnitedHealth Group, has agreed to forfeit at least $418 million to settle claims related to back-dated stock options.Not perfect, he keeps his options and does not have to report to the pillory for a taste of the cat o'nine tails, but he disgorged more than any one else to date. It won't stop all the thieves, but it will deter a few and ameliorate the damage of the rest.
The payback is on top of roughly $198 million that Mr. McGuire, an entrepreneur who built UnitedHealth, had previously agreed to return to his former employer.
The total — $618 million — includes money that Mr. McGuire will return as part of separate settlements reached yesterday with the Securities and Exchange Commission and UnitedHealth shareholders. The forfeitures are the first time regulators have successfully employed corporate governance rules put in place after the collapse of Enron that force executives to disgorge ill-gotten gains.
As part of the settlement with the S.E.C., Mr. McGuire will pay a $7 million fine and will be barred from serving as a director of a public company for 10 years. He will, however, be allowed to keep stock options valued at more than $800 million, including many that have been sharply criticized.
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Tell me if this is analogous. If someone pulled up to my local Best Buy with a rented truck and commenced loading it with HDTVs and computers, and the cops roll up, all he'd have to do is agree to give back the merch? Oh wait, he'd probably offer to pay a restocking fee, but of course the manager of store would never ask such a good customer to do that. I get it.
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