UnitedHealth: Former CEO Leaves with Windfall

UnitedHealth Group CEO Andrew Witty, who became CEO on February 21, 2021, had total compensation of $18,433,143 for the year. This included a salary of $1,500,000 (higher than that of departing CEO), a cash bonus of $2,550,000 and stock and option awards with an estimated value of over $14 million.

Of more concern to many shareholders may be the pay received by former CEO David Wichmann of $11,221,093, though he only worked seven weeks in 2021. Under an employment agreement first signed in 2014, Wichmann was entitled to a payment “equal to his most recent base salary and non-equity incentive compensation award for a two-year period following his departure.” Last year 27.3 percent of shareholders voted against pay at UnitedHealth, and some mentioned this generous severance agreement as a rationale. In the proxy statement, the compensation committee said that it had no intention of paying severance upon retirement in the future. This is in no way a legally binding promise, however.

In 2021, Wichmann also acquired 452,832 shares from options granted between 2013 and 2020. He realized $110,411,515 in value through these exercises and an additional $20,719,074 through the vesting of stock. Clearly, the idea that he required two years of salary following departure had no logical support.