UnitedHealth Group Inc

MondayMorning, Sept 15, 2008

UnitedHealth Group Inc. 's (Minnetonka MN) former chief executive officer William McGuire agreed to pay $30 million to settle a lawsuit brought against the company and individual defendants over backdated stock options. Under the deal, which needs court approval, McGuire will also return to UnitedHealth 3.68 million shares of stock options. The class-action, or group, lawsuit was brought over options that were backdated during McGuire's tenure at the helm of the company, the largest U.S. health insurer.

"We hope this sends a strong message to other corporations that continue to look after their own best interests rather than the shareowners," Rob Feckner, board president of the California Public Employee Retirement System, which is leading a group of plaintiffs, said in a statement. The settlement may be the largest cash recovery obtained from an individual defendant in a securities class-action lawsuit, Calpers said. UnitedHealth, sued in March 2006, already agreed to pay shareholders $895 million over the claims. The company is among at least 225 firms that have disclosed internal or federal probes of backdating, the practice of setting dates for stock options before they are issued to magnify their value.

The case is: In UnitedHealth Group Inc. Shareholder Derivative Lawsuit, 06-cv-1216, U.S. District Court, District of Minnesota.