This excerpt taken from the UNH DEF 14A filed Apr 30, 2007.
Had Dr. McGuire retired on December 31, 2005, his annual payments under the supplemental retirement benefit would be approximately $5,092,000 per year and his lump sum payout would be $6,442,000.
Our position is that the inclusion of an executives incentive compensation along with his or her full salary in the pension calculation is overly generous and unjustifiable. The only type of compensation used in the SERP for establishing the level of additional pension benefits should be an executives annual salary. No variable incentive pay should be included in a senior executives pension calculation under the SERP. The inclusion of annual bonus or incentive payments in determining increased pension benefits can dramatically increase the pension benefit afforded senior executives and has the additional undesirable effect of converting one-time incentive compensation into guaranteed lifetime pension income.