UnitedHealth Group (UNH)

Base Salary

The Compensation Committee generally determines base salary levels for our named executive officers early in the fiscal year, with changes becoming effective during the first quarter of the fiscal year. In 2008, the Compensation Committee approved increases to the base salaries of each of our named executive officers, other than Mr. Hemsley, to $700,000 annually, based upon the recommendation of our CEO. Our CEO believed that internal base pay parity was important to reinforce the importance of executive teamwork and success among all of the Company’s business lines to meeting the goals set forth in the Company’s 2008 strategic business plan. The Compensation Committee did not increase Mr. Hemsley’s salary in 2008 ($1,300,000).

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Base Salary

Base salary provides competitive, fixed compensation to attract and retain highly qualified executives. The base salary for each of our named executive officers is determined by reference to comparisons with peer group companies, the officer’s scope of responsibility, experience, leadership capabilities and the importance of the role. Generally, base salaries are set between the 50^th and 60^th

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percentile of the salary levels reported by our peer group companies. The Compensation Committee generally determines base salary levels for our named executive officers early in the fiscal year, with changes becoming effective during the first quarter of the fiscal year.

Base Salary

Base salary is provided to recognize individual performance and competence. The base salary level for each senior executive, including the named executive officers, is determined by reference to market comparisons, internal comparability with salaries of other executives, and the executive’s level of responsibility, experience and knowledge. Base salary decreases as a percentage of total compensation as an executive’s responsibilities increase. The employment agreements entered into with our current named executive officers generally reflect base salary levels that approximate the median level at our peer group companies.

The Compensation Committee approves base salary for the CEO (and did so for the COO when Mr. Hemsley served in that capacity) and approves base salaries for the other executive officers after considering recommendations made by the CEO.