UnitedHealth Group (UNH)

Executive Compensation

EXECUTIVE COMPENSATION

The Board of Directors has delegated to the Compensation and Human Resources Committee the authority to conduct the annual evaluation of the performance of our Chief Executive Officer and President and Chief Operating Officer, and to make certain decisions with respect to the compensation of our Chief Executive Officer and other executive officers, as well as various aspects of other compensation and fringe benefit matters affecting all of our employees, including our executive officers. In addition, the Committee administers our stock-based incentive plans.

In 2005, as part of its ongoing regular review of compensation practices, the Committee conducted a thorough review of the Company’s executive compensation practices. In connection with this review, the Committee retained an independent compensation consultant and outside counsel to assist it. The compensation consultant provided the Committee with independent insights into executive compensation matters within the Company’s industry and among other companies of similar size, complexity and operating performance. As a result of this review, and with the agreement of Dr. McGuire and Mr. Hemsley, their respective employment contracts with the Company were amended on August 5, 2005, as described in “Executive Employment Agreements” above.

EXECUTIVE COMPENSATION

The Board of Directors has delegated to the Compensation and Human Resources Committee the authority to conduct the annual evaluation of the performance of our Chief Executive Officer, and to make certain decisions with respect to the compensation of our Chief Executive Officer and other executive officers, as well as various aspects of other compensation and fringe benefit matters affecting all of our employees, including our executive officers. In addition, the Committee administers our stock-based incentive plans.

Throughout 2004, management of the Company advised the Board of Directors of various matters relating to best practices in corporate governance, including an independent review and understanding by the Committee of all components of executive compensation. In 2004, the Committee, with the full support and assistance of management of the Company, began a thorough review of the Company’s executive compensation practices. In connection with this review, in early 2005, the Committee retained an independent compensation consultant and outside counsel to assist it. The compensation consultant is providing the Committee with independent insights into executive compensation matters within the Company’s industry and among other companies of similar size, complexity and operating performance.