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This excerpt taken from the UNH DEF 14A filed Apr 23, 2009. Executive Summary As described in this Compensation Discussion and Analysis, UnitedHealth Group designed an executive compensation program to attract and retain highly qualified executives and establish a strong relationship between executive pay and Company performance based on the achievement of the enterprise goals and benchmarks described below. The Compensation Committee believes that total compensation for our Chief Executive Officer, our Chief Financial Officer and each of our three other most highly compensated executive officers for fiscal 2008 (the “named executive officers”) should be heavily weighted toward long-term performance-based compensation. In 2008, long-term compensation represented approximately 70% of the total mix of base salary, annual and long-term compensation granted to named executive officers other than the CEO. The program, however, does not target a specific mix of compensation between annual and long-term or between equity and cash compensation. Further, given that each executive officer has unique considerations, the program’s flexibility allows the Board of Directors to devise a compensation mix that rewards each individual with the proper incentives. UnitedHealth Group is committed to the notion that the structure of executive compensation drives growth, increases shareholder value, and spurs management to improve efficiency and market value for the Company. Therefore, in the past several years, extensive changes have been made to the executive compensation arrangements with the aim of aligning management’s incentives with those of our shareholders. First, as described below, the Compensation Committee changed the structure of the annual bonus program to include appropriate incentives for management to achieve UnitedHealth Group’s business strategy. Historically, the sole metric for the long-term incentive plan was earnings per share (“EPS”). In 2008, the Compensation Committee added average return on equity (“ROE”) as a second component to its long-term cash incentive program for the 2008-2010 performance period. In 2008, the Compensation Committee, acting in accordance with current best practices, also included restricted stock units as a component of the equity awards. In 2009, performance-based restricted stock units were included. These updates to UnitedHealth Group’s executive compensation structure are in line with the Company’s commitment to enhance shareholder value and align executive compensation with long-term performance. This excerpt taken from the UNH DEF 14A filed Apr 30, 2007. Executive Summary This executive summary highlights information from this Compensation Discussion and Analysis section and may not contain all of the information that is necessary to gain an understanding of our executive compensation policies and decisions. Please carefully read the entire Compensation Discussion and Analysis section and the compensation tables that follow for a more complete understanding of our executive compensation program. The Compensation Committee oversees the compensation program for our executive officers. Our approach to compensation emphasizes the relationship between pay and superior performance
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Table of Contentsby our senior executives that, in turn will increase the value of our shareholders’ investment over the long term. We accomplish this by tying compensation of executives to the successful achievement of corporate, business unit and individual goals that are closely aligned with the long-term interests of our shareholders. Overall compensation includes base salary, annual cash incentive awards, long-term cash incentive awards, long-term equity awards and benefits. The Compensation Committee believes that a substantial majority of the total compensation opportunity of executive officers should be at-risk and payable only in the event of performance by executives that benefits the Company’s shareholders and other constituents. We place a greater emphasis on long-term, equity-based incentives versus cash compensation and other employee benefits. The primary equity-based, at-risk incentives we use are stock options and stock-settled stock appreciation rights (SARs) typically with four year vesting schedules. We believe that stock options and SARs, when combined with our stock ownership guidelines, align our executives’ interest with those of our shareholders. Thus, the combination of our equity awards and stock ownership guidelines is inherently performance-based. The Company’s cash long-term incentive award focuses on sustained financial results over a three-year period, complementing stock options and SARs. We do not use substantial non-performance-based compensation mechanisms for executive officers. We do not provide perquisites such as apartments, vacation homes, automobiles, club memberships, drivers for personal travel or personal use of corporate aircraft to our executive officers. We believe that our emphasis on equity-based compensation has contributed to establishing and sustaining an entrepreneurial Company culture that has served our shareholders well in a highly competitive and rapidly evolving industry. For example, over the 5-, 10- and 15-year periods ended December 31, 2006, our Company’s compounded annualized total return to shareholders exceeded that of the S&P 500 Index by 18.7, 17.0 and 12.7 percentage points, respectively. | EXCERPTS ON THIS PAGE:
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