UnitedHealth Group (UNH)

Background and Overview

This Compensation Discussion and Analysis discusses the objectives, policies and components of our compensation programs for our current named executive officers. Please see “Compensation of Departed Named Executive Officers” appearing on page 45 for a discussion and analysis of compensation provided to our former CEO and former General Counsel and Secretary.

During 2006 and 2007, as described under “Corporate Governance” above, our Board of Directors made a number of significant changes in our corporate governance and senior leadership. We also made significant changes in our policies and procedures in the area of executive compensation and entered into employment agreements with our new CEO, our new CFO and certain other members of our new senior leadership team. See “2006 Compensation Initiatives” and “New Employment Agreements” below for details. These changes were prompted in large measure by an independent review of our historic stock option practices conducted by a committee of independent directors of the Board of Directors of the Company and its outside counsel, Wilmer Cutler Pickering Hale and Dorr LLP (WilmerHale). WilmerHale summarized the results of that review in a report to the Independent Committee (the WilmerHale Report), which the Company released to the public on October 15, 2006.

On November 30, 2006, Stephen J. Hemsley, who had been our President and Chief Operating Officer (COO), became our CEO. On December 1, 2006, we announced additional changes to the structure of the Company’s executive management. Among other things, these changes effectively eliminated the position of COO and allocated the COO’s responsibilities among three executive officers who were each promoted to the position of president of one of our three business groups. Each of these executive officers was also assigned enterprise-wide functional responsibilities at the corporate level. We also announced the appointment of a new CFO in November 2006, a new Chief Accounting Officer in December 2006 and a new Chief Legal Officer in May 2007.