UnitedHealth investors approve new CEO's $60M pay package despite turmoil following top executive's assassination

New York Post

2 days ago

UnitedHealth investors on Monday approved a pay package that includes $60 million in stock to its new CEO – even as the company is plagued by financial losses, reported criminal fraud accusations and the shocking murder of a top executive.
Stephen Hemsley, who previously served as UnitedHealth's chief executive for about a decade until 2017, returned to the top job last month after the healthcare giant reported its first earnings miss since 2008.
Along with the $60 million award, which vests in three years, Hemsley will earn a $1 million annual salary.
5 Stephen Hemsley, who previously served as UnitedHealth's chief executive for about a decade, returned to the top job last month.
AP
'Steve Hemsley's compensation is positioned at the median for CEOs of comparable companies and is substantially aligned with the interests of all company shareholders,' a UnitedHealth spokesperson told The Post in a statement.
Helmsley's expected windfall comes after Andrew Witty stepped down last month following four years at the helm.
The company's market capitalization has more than halved since its November peak, losing over $250 billion.
'We will take actions necessary to deliver the performance we are capable of while providing exceptional services and outcomes for customers, consumers, and care providers,' the healthcare giant said in a statement.
In December, the company was rocked in December by the execution-style killing in midtown Manhattan of Brian Thompson, who led its insurance branch. Accused killer Luigi Mangione has pleaded not guilty. His trial is set to begin in 2026.
5 Former UnitedHealth CEO Andrew Witty testifies at a Senate Finance Committee hearing in May 2024.
AP
Shareholders sued UnitedHealth last month for allegedly concealing how backlash from the killing was damaging its business.
In a proposed class action filed last month in Manhattan federal court, shareholders said the insurer defrauded them after Thompson's assassination by shifting away from strategies that led to higher-than-average claims denials, without revealing the impact on profitability.
UnitedHealth is also facing investigations from the Department of Justice for possible criminal Medicare fraud, according to The Wall Street Journal.
5 In December, the company was rocked in December by the execution-style killing in midtown Manhattan of Brian Thompson, who led its insurance branch.
AP
'We have not been notified by the Department of Justice of the supposed criminal investigation reported, without official attribution, in the Wall Street Journal on May 14th,' a UnitedHealth spokesperson told The Post, calling the Journal's reporting 'deeply irresponsible.'
Shares were little changed on Monday after falling about 40% this year.
The stock plunged 22% on April 17, wiping out about $119 billion of market value, after the insurer cut its 2025 forecast for adjusted profit per share to between $26 and $26.50 from between $29.50 and $30.
5 UnitedHealth slashed its forecast in April and later suspended it altogether.
via REUTERS
At Monday's annual shareholder meeting, Hemsley apologized for the company's performance and told investors that management is determined to 'earn back your trust and your confidence.'
The company will conduct a review of its policies and practices related to risk assessment, managed care and pharmacy services, which will be looked over by independent experts, Hemsley said.
Investors were left stunned by UnitedHealth's dismal earnings and forecast, especially after former CEO Andrew Witty had given such an upbeat outlook just a few months earlier.
5 Luigi Mangione, accused of fatally shooting Brian Thompson, in Manhattan state court in February.
AP
But Witty – a British executive without a background in the US insurance industry – took an optimistic tone with shareholders even as problems stacked up behind the scenes, employees told the Journal.
He was more removed than previous chief executives, running the Minnesota-based company while living in Buckinghamshire, outside London, and flying back and forth to Washington and Minnesota via jet, according to property records and UnitedHealth's proxy documents.
He never moved into the special CEO office at UnitedHealth's Minnesota headquarters, where Hemsley had once worked from, according to the Journal.
Witty also shifted monthly executive meetings – which had been in-person under Hemsley and so intense they were called 'colonoscopies' – online, former executives told the Journal.
He was more casual in the office, wearing tracksuit-style tops and bright colorful sneakers instead of a suit and tie, according to the report.
Some of his top hires were former colleagues from GSK, the London-based pharmaceutical company, and lacked experience in the US insurance industry, the Journal said.
UnitedHealth profits soared under Witty for a time, but his changes also left UnitedHealth more prone to risks, which backfired when Medicare payment rules changed.
The government pays Medicare insurers more for sicker patients with certain diagnoses, and UnitedHealth was recording those lucrative illnesses at high rates, according to a Journal investigation.
In 2023, however, the government limited or ended lucrative payments on many diagnoses. The new rules took effect the following year.