![[MISSING IMAGE: tm223410d1-cov_ofcpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm223410d1-cov_ofcpn.jpg)
![[MISSING IMAGE: tm223410d1-cov_ifcpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm223410d1-cov_ifcpn.jpg)
$473B
(78th percentile)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐
Preliminary Proxy Statement
☐
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒
Definitive Proxy Statement
☐
Definitive Additional Materials
☐
Soliciting Material under §240.14a-12
UnitedHealth Group Incorporated
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
☒
No fee required.
☐
Fee paid previously with preliminary materials.
☐
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
![[MISSING IMAGE: lg_unitedhealth-pn541.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/lg_unitedhealth-pn541.jpg){kind=small}
| 9900 Bren Road East | |
| | April 22, 2022 | | |||
Dear Fellow Shareholders:
UnitedHealth Group is starting 2022 with strong momentum — well-positioned to deliver high-quality care to even more people and create greater long-term value for our shareholders and the communities we serve as we pursue our mission of helping people live healthier lives and helping the health system work better for everyone.
Combining Optum’s clinical expertise, technology and data capabilities with UnitedHealthcare’s leadership in health benefits, we are determined to help connect the fragmented pieces of the health system. Through innovations and realigning incentives, we are working in partnership with care providers, employers, and public sector leaders to help build a modern, high-performing health system and improve access, affordability, outcomes and experiences for everyone who depends on it.
Our Long-Term Growth Strategy
As an enterprise, we are prioritizing five distinct growth opportunities — which both build on our well-established, market-leading positions and further differentiate our capabilities and services to reach new markets. They are:
•
Care Delivery: Building a value-based system of care focused on better outcomes at lower costs; aligning patient, provider and payer incentives; and seamlessly integrating primary, specialty, urgent, post-acute and behavioral care across clinic, in-home and virtual settings.
•
Health Benefits: Growing our market-leading position in health benefits with a primary focus on affordable coverage, a simpler experience and high-quality, supported care.
•
Health Technology: Developing and deploying new technology to help modernize and simplify the health system.
•
Health Financial Services: Streamlining the health payments and banking experience to make it simpler, faster and more convenient for providers, payers, and consumers alike.
•
Pharmacy Services: Integrating our medical, pharmacy, and behavioral capabilities to provide whole-person care, support the discovery of new drugs and treatments, and offer new services.
Informed by our deep clinical expertise, these strategies present opportunities for innovation and collaboration at Optum and UnitedHealthcare — and they support our expected long term 13% to 16% earnings per share growth rate.
Ongoing Board Development
As part of its ongoing oversight, the Board reviewed committee charters and made several changes in 2021. This included assigning overall oversight for the company’s ESG agenda to the Governance Committee and having other committees oversee specific ESG elements within their purview. We also reconstituted our Public Policy Committee, now renamed the Health and Clinical Practice Policies Committee, to better reflect its expanded oversight of clinical care and practice matters and access to care, in addition to health policy matters.
In 2021, Michele Hooper became Lead Independent Director, John Noseworthy chair of the Governance Committee and Valerie Montgomery Rice chair of the Health and Clinical Practice Policies Committee. In November, Paul Garcia, retired chairman and CEO of Global Payments, joined the Board, bringing additional executive operating experience and technological, payments and financial expertise as well as advancing the diversity of the Board.
Two of our directors, Richard Burke and Gail Wilensky, are not standing for re-election this year and will retire as of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1)
Amount Previously Paid:
(2)Form, Schedule or Registration Statement No.:
(3)Filing Party:
(4)Date Filed:
9900 Bren Road East, Minnetonka, Minnesota 55343
April 19, 2019
Dear Shareholder:
We cordially invite you to attend our 2019 Annual Meeting following extraordinary and distinguished service to the company and shareholders. We are deeply grateful to Mr. Burke and Dr. Wilensky for their leadership. We benefited greatly from their insights, experience, and
guidance. The Board continues to assess its composition to ensure that it has the balance of Shareholders.skills and operating experience needed to oversee long-term strategy and provide effective oversight.
Advancing our Efforts in Sustainability & ESG
As a mission-driven company, we are committed to using our reach and resolve to help ensure everyone has access to high-quality, affordable care when and where it is needed. We will hold our meeting on Monday, June 3, 2019, at 10:00 a.m. Central Timesee the intrinsic societal value of primary and preventive care and ensuring physicians have the resources, tools and support they need to keep their patients healthy — helping people live longer and more fulfilling lives while reducing cost in the lower level conference center at 300 North LaSalle, Chicago, Illinois 60654.
system for everyone. To support our growing focus on sustainability, the company created the role of Chief Sustainability Officer, responsible for helping develop a comprehensive ESG strategy, including annual and long-term sustainability goals and a governance structure to achieve them.
Shareholder Meeting details
As a shareholder of UnitedHealth Group, your continued feedback is important to our company. We cordially invite you play an important roleto participate in our company by considering and taking action2022 Annual Meeting of Shareholders to be held on the matters set forth in the attached proxy statement.Monday, June 6, 2022, at 11:00 a.m. Eastern Time. We appreciate the time and attention you invest in making thoughtful decisions.
will once again hold our meeting virtually.
Attached you will find a notice of meeting and proxy statement containing further information about the items upon which you will be asked to vote and the meeting itself, including:
•How to obtain admission to the meeting if you plan to attend; and•Differentincluding different methods you can use to vote your proxy, including byInternet,internet, telephone and mail.
Every shareholder vote is important, and we encourage you to vote as promptly as possible. If you cannot attend the meeting in person, you may listen to the meeting via webcast. Instructions on how to accessparticipate in the live webcastAnnual Meeting are included in the proxy statement.
On behalf of UnitedHealth Group’s Board and management team, we appreciate your continued trust and support.
Sincerely,
| | ![[MISSING IMAGE: sg_andrewwitty-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/sg_andrewwitty-bw.jpg){kind=small} | | | ![[MISSING IMAGE: sg_stephenhemsleynew-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/sg_stephenhemsleynew-bw.jpg){kind=small} | |
| | Andrew Witty Chief Executive Officer | | | Stephen Hemsley Chair of the Board | |
2022 Notice of Annual Meeting
David S. Wichmann
•
Chief Executive Officer
Stephen J. Hemsley Elect the eight nominees set forth in the attached proxy statement to the Company’s Board of Directors.
•
Executive Chairman
Proposal 2: Conduct an advisory vote to approve the compensation paid to the Company’s named executive officers as disclosed in the attached proxy statement (a “Say on Pay”) vote.
•
Proposal 3: Ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for the Company for the year ending December 31, 2022.
•
Proposals 4 and 5: Consider the shareholder proposals set forth in the attached proxy statement, if properly presented at the Annual Meeting.
Items of business may also include transacting any other business that properly come before the Annual Meeting or any adjournments or postponements of the Board
Tableproxymaterials on or about April 22, 2022. Website addresses included throughout this proxy statement are for reference only. The information contained on our website is not incorporated by reference into this proxy statement.
meeting. Proxy materials are first being mailed to our shareholders and made available at www.unitedhealthgroup.com/
Access to the Annual Meeting
The 2022 Annual Meeting will be held in virtual format only. If you plan to participate in the Annual Meeting, please see the “Questions and Answers About the Annual Meeting and Voting” section in the attached proxy statement. Shareholders will be able to participate in, vote, view the list of Contentsshareholders of record and submit questions from any location.
Important.
be accessed virtually at:
www.virtualshareholder
meeting.com/UNH2022
Even if you plan to participate in the Annual Meeting, we still encourage you to submit your proxy by internet, telephone or mail prior to the meeting. If you later choose to revoke your proxy or change your vote, you may do so by following the procedures under Question 12 of the “Questions and Answers About the Annual Meeting and Voting” section in the attached proxy statement.
| June 6, 2022 | |
| | 11:00 a.m. Eastern Time | |
| |
be accessed virtually at:
www.virtualshareholder
meeting.com/UNH2022
| | |||
| | |||
Record Date | April | |
| | Only shareholders of record of the | |
| | IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD VIRTUALLY VIA THE INTERNET ON JUNE 6, 2022: | |
| | The Notice of Internet Availability of Proxy Materials, Notice of Annual Meeting of Shareholders, Proxy Statement and Annual Report are available at www.unitedhealthgroup.com/ proxymaterials. | |
Table of Contents
| | | | | |
| |
| ||
By Order of the Board of Directors,
Dannette L. SmithSecretary to the Board of Directors
April 19, 2019
IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS FOR THEANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 3, 2019:
The Notice of Internet Availability of Proxy Materials, Notice of Annual Meeting of Shareholders, Proxy Statement and Annual Report are available atwww.unitedhealthgroup.com/proxymaterials.
Table of Contents
| | | ||||||||
| |||||||||
| | | | | | | | |||
| | | | | | | ||||
| |||||||||
2022 Director | |||||||||
| | | | |||||||
| | | | |||||||
| | | | | | 8 | | | ||
| | | | | | 12 | | | ||
| | | | | | 13 | | | ||
| | | | | | 13 | | | ||
| | | | | | 16 | | | ||
| | | | | | 16 | | | ||
| | | | | | 17 | | | ||
| | | | | | 17 | | | ||
| | |||||||||
| | | | | 20 | | | |||
| | | | | | | |||
| | | | | | ||||
| |||||||||
| | | | |||||||
| | 24 | | | ||||||
| | |||||||||
| | | | | | |||||
| | | | | | 25 | | | ||
| | | | | | ||||
| Executive Compensation | | | | | | | | |
| | | | | | 29 | | | ||
| | |||||||||
| | | | |||||||
| | 32 | | | ||||||
| | | | | | 47 | | | ||
| | | | | | 48 | | | ||
| | | | | 48 | | |||
| | | | | 51 | | |||
| | | | | 53 | | |||
| | | | | 54 | | |||
| |||||||||
| | | | | 55 | | ||||
| | | | | 56 | | |||
| | | | | 57 | | |||
| | | | | 59 | | |||
| |||||||||
i
| | | | | 61 | | | |||
| Audit | ||||||||
| | | | | | | | |||
| | | | | | 62 | | | ||
| | | | | 64 | | | |||
| | | | | 64 | | |||
| |||||||||
| | | | | | | ||||
| | | | | | 65 | | |||
| | |||||||||
| | Annual Meeting | | | | | ||||
| | | | |||||||
| | | | | | | | |||
| | | | | | 69 | | |||
| | |||||||||
| Questions and Answers About the Annual Meeting and Voting | | | | 72 | | | |||
| | | | | 79 | | | ||
| | | | | | 79 | | | ||
| | Other Information | | | | | | | | |
| | |||||||||
| | | | | ||||||
| 80 | | | |||||||
| | |||||||||
| Certain Relationships and Transactions | |||||||||
| | | | | 82 | | | |||
| | |||||||||
| | | | | 84 | | |
ii
Proxy Summary |
This summary highlights information contained elsewhere in this proxy statement. We encourage you to review the entire proxy statement.
We are a diversified health care company whosewith a mission is to help people live healthier lives and to help make the health system work better for everyone. UnitedHealth Group,Our two distinct, yet complementary business platforms — Optum and UnitedHealthcare — are actively engaged in helpingworking to achievehelp build a modern, high-performing health system through improved access, affordability, outcomes and experiences for the Triple Aim — betterindividuals and organizations we are privileged to serve. The breadth and scope of our diversified company help to consistently improve health outcomes, lower costscare quality, access and a better consumer experience. We put the needs of others first, one person at a time. In turn, we grow and earn the opportunity to serve more people in more ways, delivering exceptional returns for society and for our shareholders.affordability. We again achievedperformed strongly in 2021.
Financial
•
Total shareholder return in 2021 was 45%, and 107% from 2019-2021, reflecting continued strong business results in 2018, including:
- fundamental performance;
•
Revenues increased 12% to $226.2 billion from $201.2$287.6 billion in 2017;2021 from $257.1 billion in 2020;
•
•
•
•
•
•
Return on equity was consistent withat 25.2% in 2021 compared to 24.9% in 2020, reflecting the prior year at 24.4% in 2018;
•Cumulative shareholder return for UnitedHealth Group, which is defined as the increase in stock price, together with dividends reinvested when paid, was 122% over the 2016-2018 time periodCompany’s strong operating performance and 258% over the 2014-2018 time period. Cumulative shareholder return for the S&P 500 Index was 30% over the 2016-2018 time periodefficient capital structure; and 50% over the 2014-2018 time period;
•
•
Awards and Recognition
•
•
UnitedHealth Group was the top ranked company in the insurance and managed care sector onFortune's 2019 "World's Fortune’s 2022 “World’s Most Admired Companies"Companies” list. This is the ninthtwelfth consecutive year UnitedHealth Group has ranked No. 1 overall in its sector. The Company ranked No. 1 on all nine key attributes of reputation — innovation, people management, use of corporate assets, social responsibility, quality of management, financial soundness, long-term investment value, quality of products and services and global competitiveness. The Company was rated No. 1 in innovation for the tenth consecutive year.competitiveness;
•
•
UnitedHealth Group washas been named to both the Dow Jones Sustainability World and North America Indices every year since 1999;
•
UnitedHealth Group received a score of 100 on the Human Rights Campaign Foundation’s Corporate Equality Index 2022, earning the distinction of one of the “Best Places to Work for LGBTQ Equality”;
•
In 2021, and for the 20thtenth consecutive year;
•year, The Civic 50, a Points of Light initiative that highlights companies that improve the quality of life in the communities where they do business, ranked UnitedHealth Group one of America’s 50 most community-minded companies. In addition, UnitedHealth Group was included amongnamed the 2018 Best Employersleader in the Healthcare Sector category for Diversity by Forbes;the fourth time overall;
•
•
UnitedHealth Group was named to Forbes’ list of 2021 World’s Best Employers;
•
Prospanica, an organization that has worked to empower Hispanic professionals for over 30 years, recognized UnitedHealth Group with the 2021 Brillante Award for Corporate Excellence;
•
The CDP (formerly Carbon Disclosure Project) named UnitedHealth Group to its Leadership Band in 2020 for efforts to reduce greenhouse gas emissions;
•
The Disability Equality Index® named UnitedHealth Group one of America's Most JUST Companies by JUST Capital and Forbesthe best places to work for disability inclusion in 2018. The JUST 100 rankings measure how U.S. companies perform on issues Americans care about most, including worker pay and treatment, customer respect, product quality and environmental impact; and2021;
•
•In the 2017-2018 Newsweek Green Rankings, created in partnership with Corporate Knights Capital and HIP Investor,
UnitedHealth Group has been ranked No. 4 in the top 10% outnation on the 2022 Military Friendly® Employers list; and
•
UnitedHealth Group is recognized as a “Trendsetter” in the 2021 Center for Political Accountability-Zicklin Index of the largest 500 U.S. companies in corporate sustainability and environmental impact.
- Political Accountability.
| | 2022 Proxy Statement | Proxy Summary | | | 1 | |
Corporate Governance
UnitedHealth Group is committed to meeting high standards of ethical behavior, corporate governance and business conduct. Our company, our Board of Directors (the “Board”) and our people are committed to the shared cultural values of integrity, compassion, innovation, relationships and performance. This commitment has led us to implement many governance best practices, including the following:
•- practices.
Board Structure and Composition
Public Company Board Service Limits
Our directors may serve on no more than three other public company boards and our CEO may serve on no more than one other public company board.
One Share, One Vote
The Company does not have a dual-class share structure. Each share of Company common stock is entitled to one vote.
Proxy Access
Board Succession Planning, Tenure and Diversity
Since January 2017, seven new directors have been appointed to our diverse and deeply experienced Board, including the addition of Paul Garcia in November 2021. Six of these new directors are standing for election this year, five of whom are independent, advancing both the skill and experience profile of the Board as well as its diversity. Two directors are not standing for re-election.
Chief Executive Officer Succession Planning
Our succession plan, which is reviewed annually by our Board, addresses both an unexpected loss of our CEO and longer-term succession.
ESG Oversight
Our Board provides robust oversight over ESG topics, as codified in our Board Committee charters.
Absence of Rights Plan
We do not have a shareholder rights plan, commonly referred to as a “poison pill.”
Shareholder Special Meeting and Written Consent Rights
Shareholders hold the right to call a special meeting and to act by written consent.
Prohibition on Short Sales, Hedging and Pledging Transactions in Company Securities
Our insider trading policy prohibits all directors, executive officers and employees from engaging in short sales and hedging transactions relating to our common stock. Additionally, our insider trading policy prohibits directors and executive officers from engaging in pledging transactions.
Stock Ownership Guidelines
We publicly disclose our political contributions and public advocacy efforts and the contributions of our federal and state political action committees.
•Environmental Policy — We seek to minimize our environmental impact and to heighten our employees' awareness of the importance of the environment.
•Short Selling and Hedging Transactions in Company Securities — Our insider trading policy prohibits all directors, executive officers and employees from engaging in short sales and hedging transactions relating
•Absence of Rights Plan— We do not have a shareholder rights plan, commonly referred to as a "poison pill."
to our common stock, and requires advance approval of the Compensation Committee of any pledging of common stock by directors, executive officers and other members of management.
See the "Corporate Governance"“Corporate Governance” portion of this proxy statement for further information on our governance practices.
Enterprise-Wide Risk Oversight
Our Board of Directors, assisted by its committees, oversees management's enterprise-wide risk management activities. Risk management activities include assessing and taking actions necessary to mitigate and manage risk incurred in connection with the long-term strategic direction and operation of our business.
| | 2022 Proxy Statement | Proxy Summary | | | 2 | |
Executive Compensation
Our executive compensation program uses a mix of base salary, annual and long-term cash incentives, equity awards and broad-based benefits to attract and retain highly qualified executives and maintain a strong relationshipalignment between executive pay and Company performance. Shareholders again expressed strong support for our executive compensation program at our 2018 Annual Meeting of Shareholders, with more than 95% of the votes cast in favor of our Say-on-Pay proposal.
Our Overall Compensation Program Principles
•Pay-for-performance— A substantial portion of the total compensation of our executive officers is earned based on achievement of enterprise-wide goals that drive long-term performance, including growth and shareholder value.•Enhance the value of the business— Incentive compensation is designed to grow and sustain the longer-term value of the Company and avoid excessive risk-taking.•Reward long-term growth and focus management on sustained success and shareholder value creation— Compensation of our executive officers is weighted toward equity awards that encourage sustained performance and drive shareholder returns over time.•Standard benefits and very limited perquisites— We provide standard employee benefits and very limited perquisites to our executive officers.
Summary of Compensation Paid to CEO David S. Wichmann in 2018
•Base salary— $1.3 million.•Cash incentive awards— Annual cash incentive award of $4.5 million and long-term cash incentive award of $890,600, which reflect the Company's performance against pre-set goals and continued strong leadership by Mr. Wichmann.•Equity awards— Performance shares with a target grant date fair value of $5.55 million, restricted stock units with a grant date fair value of $2.775 million and stock options with a grant date fair value of $2.775 million.•Company matching contributions— $178,875 under our 401(k) and executive savings plan.
Information regarding compensation paid to each of our named executive officers in 20182021 is described in the "Compensation Discussion“Executive Compensation” section.
Addressing the 2021 Say on Pay Vote
Having received 72% support for our 2021 say on pay vote, we sought feedback from shareholders to better understand what motivated their votes and Analysis" section.what actions we could take to address topics relating to our executive compensation program. The following summarizes key feedback received and responsive actions we have taken related to executive compensation:
•
Strong Governance Standards in Oversight of Executive Compensation Policies
We maintain strong governance standards in the oversightoverall design of our executive compensation policiesprogram as well as the Company’s overall pay-for-performance philosophy. Shareholders overwhelmingly did not indicate a desire for broad changes to our program design;
•
Our Compensation and practices, including:
•Performance based compensation arrangements, including performance based equity awards,Human Resources Committee has confirmed thatuseit has no intention of paying severance in connection with the retirement of an executive officer going forward;
•
Broadened our clawback policy to include material detrimental conduct as a variety of performance measures, with different measures used for annual and long term plans.trigger;
•
•
•
•
This proxy statement and our Annual Report for the year ended December 31, 2018, are first being mailed to the Company's shareholders and made availableappreciates feedback provided by shareholders. Additional information on the Internet atwww.unitedhealthgroup.com/investors/annual-reports.htmlfeedback provided and responsive actions taken may be found beginning on or about April 19, 2019. Website addresses included throughout this proxy statement are for reference only. The information contained on our website is not incorporated by reference intopage 33 of this proxy statement.
COVID-19 Response
Voting Matters and Vote Recommendations
| | Items of Business | | | Board’s Recommendation | | | Details | | ||||||||
1 | ||||||||||||||||
| | Election of | |||||||||||||||
 | ||||||||||||||||
| | | FOR | | | Page 4 | | ||||||||||
| | 2 | | | Advisory Approval of | | | FOR | | | Page | ||||||
 | ||||||||||||||||
| | ||||||||||||||||
| | 3 | | | Ratification of Independent Registered Public Accounting Firm | | | FOR | | | Page | ||||||
 | ||||||||||||||||
| 65 | | |||||||||||||||
| | | | Shareholder Proposal Seeking Shareholder Ratification of Termination Pay | | | AGAINST | | | Page 66 | | ||||||
| 5 | | | Shareholder Proposal Regarding | | | AGAINST | | | Page | |||||||
 | ||||||||||||||||
| 69 | | |||||||||||||||
| | |||||
2022 Proxy Statement | Proxy Summary | | | 3 | |
| | 1 | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Criteria for Nomination to the Board
We believe that an effective Board consists of a diverse group of individuals who bring a variety of complementary skills and a range of personal and business experience to their positions on the Board. The Nominating Committee developed and maintains a skills matrix to assist in considering the appropriate balance of experience, skills and attributes required of a director and to be represented on the Board as a whole. The skills matrix is consistent with the Company's long-term strategic plan and is regularly reviewed and updated by the Nominating Committee. The Nominating Committee evaluates Board candidates against the skills matrix on an annual basis to determine whether to recommend candidates for initial election to the Board and whether to recommend currently serving directors for reelection to the Board.
The skills matrix has two sections — a list of core criteria every member of the Board should meet and a list of skills and attributes to be represented collectively by the Board. The core director criteria are:
•Independence under the Company's Standards for Director Independence and New York Stock Exchange ("NYSE") listing requirements, subject to waiver by the Nominating Committee;•Service on no more than three other public company boards; except our Chief Executive Officer may serve on no more than one other public company board;•High integrity and ethical standards;•Standing and reputation in the individual's field;•Risk oversight ability with respect to the particular skills of the individual director;•Understanding of and experience with complex public companies or like organizations; and•Ability to work collegially and collaboratively with other directors and management.
Each of our independent director nominees has satisfied all the core director criteria set forth in the skills matrix. Messrs. Hemsley and Wichmann are not independent directors because Mr. Hemsley serves as Executive Chairman of the Board and Mr. Wichmann is Chief Executive Officer.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In addition, the skills matrix provides a number of substantive areas of expertise that the Board as a whole should represent. The following table includes a list of these areas and indicates the director nominees with expertise in each area.
| ||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | Corporate Governance | | | | | | Executive Compensation | | | | | | | | | | | Annual Meeting | | | | |||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
| | | |||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
| |
Our Nominating Committee also strives to maintain a balance of tenure on the Board. Long-serving directors bring valuable experience with our Company and familiarity with the successes and challenges the enterprise has faced over the years, while newer directors contribute fresh perspectives and innovative ideas. Tenure of the eleven director nominees is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Board Diversity
UnitedHealth Group embraces and encourages a culture of diversity and inclusion. Valuing diversity makes good business sense and helps to ensure our future success, because the customers, clients and consumers we serve are as diverse as the thousands of communities where we live and work across all 50 states in the U.S. and 130 other nations. UnitedHealth Group's commitment to diversity and inclusion empowers our employees to contribute their best work, collaborating to be the preeminent health and well-being business and community partner of choice.
While our Board has not adopted a formal definition of diversity, and does not establish specific goals with respect to diversity, the Board's diversity is a consideration in the director nomination process and is assessed annually when the Board evaluates overall effectiveness.
For this year's election, the Board has nominated eleven individuals; all are incumbent nominees who collectively bring tremendous diversity to the Board. Each nominee is a strategic thinker and has varying, specialized experience in the areas relevant to the Company and its businesses. Moreover, their collective experience covers a wide range of geographies and industries, including health care, insurance, consumer products, technology and financial services, and roles in academia, corporate governance and government. The eleven director nominees range in age from 56 to 78; three of the eleven director nominees are women; two are African American; and one is a citizen of New Zealand.
Update on Recent Changes in Board Membership
Recent changes to the Board of Directors include:
•Timothy P. Flynn, former Chairman of KPMG International, joined the Board in 2017;•Valerie C. Montgomery Rice, M.D., President and Dean of the Morehouse School of Medicine, joined the Board in 2017;•F. William McNabb III, former Chairman of The Vanguard Group, Inc., joined the Board in 2018;•John H. Noseworthy, M.D., former Chief Executive Officer and President of Mayo Clinic, joined the Board in 2019;•Sir Andrew P. Witty relinquished his position on our Board in 2018 in anticipation of his appointment as Chief Executive Officer of Optum and Executive Vice President of UnitedHealth Group later the same year; and•Kenneth I. Shine, M.D., retired from the UnitedHealth Group Board of Directors in 2018 after nearly ten years of exceptional service as an independent director.
We have for several years maintained an active "Evergreen" director candidate pipeline which reflects our continuing commitment to diversity in life, cultural and business experience among director nominees. The Nominating Committee has an outside firm on retainer to assist in identifying and evaluating director candidates. The Nominating Committee will also consider recommendations submitted by shareholders for director candidates. Recommendations should be directed to the Secretary to the Board of Directors. None of the Company's shareholders recommended candidates for the Board of Directors in connection with the 2019 Annual Meeting.
Prior to the appointment of each of the new independent directors in 2017, 2018 and 2019, the Nominating Committee considered a wide slate of potential candidates, including qualified women and minority candidates. Each eventual nominee was selected due to his or her overall skills and experience.
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominating Advisory Committee
The Board of Directors formed the Nominating Advisory Committee in 2006 to provide the Nominating Committee with additional input from shareholders and others regarding desirable characteristics of director candidates and the composition of the Board of Directors. The key features of the skills matrix are also discussed with members of our Nominating Advisory Committee and their feedback is considered by the Nominating Committee when it updates the skills matrix. The Nominating Committee considers, but is not bound by, input provided by the Nominating Advisory Committee. The Nominating Advisory Committee currently includes four individuals affiliated with long-term shareholders of the Company and one individual who is a member of the medical community. Members of the Nominating Advisory Committee do not receive any compensation from the Company for serving on the Nominating Advisory Committee. The Nominating Advisory Committee met once in 2018. A description of the Nominating Advisory Committee, including a description of how the members of the committee are nominated and selected, can be found on our website atwww.unitedhealthgroup.com/about/corporate-governance.
Shareholder Director Candidates for Inclusion in our Proxy Statement (Proxy Access)
Our Bylaws provide a shareholder or group of shareholders (of up to 20) who have owned at least 3% of our common stock for at least three years the ability to include in our proxy statement shareholder-nominated director candidates for up to 20% of the Board. To be eligible to use this right, the shareholder(s) and the candidate(s) must satisfy the requirements specified in our Bylaws. Our Bylaws are available atwww.unitedhealthgroup.com/about/corporate-governance. For the 2020 Annual Meeting, director nominations submitted under these Bylaw provisions must be received at our principal executive offices, directed to the Secretary to the Board of Directors, no earlier than November 21, 2019 and no later than December 21, 2019.
Shareholder Nominations of Director Candidates at an Annual Meeting
Our shareholders may also nominate candidates for election to the Board of Directors from the floor of our Annual Meeting of Shareholders, instead of including the director candidate in our proxy statement, only by submitting timely written notice to the Secretary to the Board in accordance with our Bylaws. The notice must include the information required by our Bylaws, which are available atwww.unitedhealthgroup.com/about/corporate-governance. For the 2020 Annual Meeting, this notice must be received at our principal executive offices, directed to the Secretary to the Board of Directors, no earlier than February 4, 2020 and no later than March 5, 2020.
Our Certificate of Incorporation and Bylaws provide that each member of our Board of Directors is elected annually by a majority of votes cast if the election is uncontested. The Board of Directors has nominated the eleveneight directors set forth below for election by the shareholders at the 20192022 Annual Meeting to hold office until the next annual meeting and the election of their successors. All of the nominees are currently directors and have agreed to be named in this proxy statement and to serve if elected. After many years of exceptional service to the Board, Mr. Burke and Dr. Wilensky are not standing for election this year.
In accordance with our Principles of Governance, each nominee has also tendered an irrevocable offer to resign as a director, which will become effective if the director fails to receive a majority vote for election at the Annual Meeting and our Board accepts the director’s offer to resign. Please see the “Corporate Governance” section of this proxy statement for additional details on this policy. All of the nominees are expected to attend the 2022 Annual Meeting. All then-current directors attended the 2021 Annual Meeting. We ask for your voting support for each of the director nominees were elected byat our shareholders at the 20182022 Annual Meeting except for Dr. Noseworthy, who was appointed unanimously by the Board in February 2019. Meeting.
2022 Director Nominees
The Company and the Nominating Committee were familiar with Dr. Noseworthy and had considered him as a potential Board candidate upon his availability following retirement from the Mayo Clinic. Following Dr. Shine's retirement from the Board, the Nominating Committee was particularly interested in strengthening the depth of clinical expertise on the Board. All of the nominees have informed the Board they are willing to serve as directors if elected. If any nominee should become unable to serve as a director for any reason, the persons named as proxies will elect a replacement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Board of Directors recommends that you vote FOR the election of each of the nominees. Executed proxies will be voted FOR the election of each nominee unless you specify otherwise.
| Name | Age | Director Since | | ||||||||
| William C. Ballard, Jr. | | | 78 | | | | 1993 | | | ||
| | | | | | | ||||||
| Richard T. Burke | | | 75 | | | | 1977 | | | ||
| | | | | | | ||||||
| Timothy P. Flynn | | | 62 | | | | 2017 | | | ||
| | | | | | | ||||||
| Stephen J. Hemsley | | | 66 | | | | 2000 | | | ||
| | | | | | | ||||||
| Michele J. Hooper | | | 67 | | | | 2007 | | | ||
| | | | | | | ||||||
| F. William McNabb III | | | 61 | | | | 2018 | | | ||
| | | | | | | ||||||
| Valerie C. Montgomery Rice, M.D. | | | 57 | | | | 2017 | | | ||
| | | | | | | ||||||
| John H. Noseworthy, M.D. | | | 67 | | | | 2019 | | | ||
| | | | | | | ||||||
| Glenn M. Renwick | | | 63 | | | | 2008 | | | ||
| | | | | | | ||||||
| David S. Wichmann | | | 56 | | | | 2017 | | | ||
| | | | | | | ||||||
| Gail R. Wilensky, Ph.D. | | | 75 | | | | 1993 | | | ||
| | | | | | | ||||||
The director nominees, if elected, will serve until the 2020 Annual Meeting or until their successors are elected and qualified. Following is a brief biographical description of each director nominee. A tablematrix listing the skills and areas of expertise in the skills matrix held by each director and which, in part, led the Board to conclude each respective director should continue to serve as a member of the Board, is included on page 7.
9.
| | The Board of Directors recommends you vote FOR the election of each of the nominees. Executed proxies will be voted FOR the election of each nominee unless you specify otherwise. | |
| Director | | | Age | | | Primary Occupation | | | Director Since | |
| Timothy P. Flynn | | | 65 | | | Former Chair, KPMG International | | | 2017 | |
| Paul R. Garcia | | | 69 | | | Retired Chair and Chief Executive Officer, Global Payments | | | 2021 | |
| Stephen J. Hemsley | | | 69 | | | Chair, UnitedHealth Group | | | 2000 | |
| Michele J. Hooper | | | 70 | | | President and CEO, The Directors’ Council | | | 2007 | |
| F. William McNabb III | | | 65 | | | Former Chairman and CEO, The Vanguard Group, Inc. | | | 2018 | |
| Valerie C. Montgomery Rice, M.D. | | | 60 | | | President and Dean, Morehouse School of Medicine | | | 2017 | |
| John H. Noseworthy, M.D. | | | 70 | | | Former CEO and President, Mayo Clinic | | | 2019 | |
| Andrew Witty | | | 57 | | | CEO, UnitedHealth Group | | | 2021 | |
| | 2022 Proxy Statement | Proposal 1: Election of Directors | 2022 Director | |||
| | | 4 | |
| ||||||||||||||||||||||||||||||||||||
| | | |||||||||||||||||||||||||||||||||||
Board of | ||||||||||||||||||||||||||||||||||||
| | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
| | Timothy P. Flynn | | |||
| Mr. Flynn was Chairman of KPMG International | | | Director since: 2017 Age: 65 Committees: Compensation and Human Resources (Chair) Governance Current Outside Public Directorships: JPMorgan Chase & Co. Walmart Inc. | |
| | Paul R. Garcia | | |||
| | Mr. | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | Director since: 2021 Age: 69 Committees: Audit and Finance Current Outside Public Directorships: Deluxe Corporation Repay Holdings Corporation | |
| | Stephen J. Hemsley | | |||
| Mr. Hemsley is | ||||
| | Director Age: 69 Committees: Health and Clinical Practice Policies Current Outside Public Directorships: None | | ||
| | 2022 Proxy Statement | 2022 Director Nominees | | | 5 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
| | Michele J. Hooper | | |||
| Ms. Hooper is Lead Independent Director of the Board of Directors of UnitedHealth Group and has served in this capacity since October 2021. Ms. Hooper is also President and CEO of The | | | Director since: 2007 Age: 70 Committees: Audit and Finance Current Outside Public Directorships: United | |
| F. William McNabb III | | ||||
| | ||||||
Mr. McNabb served as Chairman of The Vanguard Group, Inc. from | | | Director since: 2018 Age: 65 Committees: Audit and Finance (Chair) Governance Current Outside Public Directorships: International Business Machines Corporation | | ||
| | 2022 Proxy Statement | 2022 Director Nominees | | | 6 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
| | Valerie C. Montgomery Rice, M.D. | | ||||
| | ||||||
Dr. Montgomery Rice is President and | | | Director since: 2017 Age: 60 Committees: Health and Clinical Practice Policies (Chair) Compensation and Human Resources Current Outside Public Directorships: 23andMe Holding Co. | | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
John H. Noseworthy, M.D. | | |||
| | ||||
Dr. Noseworthy is the former Chief Executive Officer and President of Mayo Clinic, a world renowned | ||||
| | | Director since: 2019 Age: 70 Committees: Compensation and Human Resources Health and Clinical Practice Policies Governance (Chair) Current Outside Public Directorships: None | | |
| 2022 Proxy Statement | 2022 Director | |||
| | | 7 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
| | Andrew Witty | | |||
| Mr. | ||||
| | | Director since: 2021 Age: 57 Committees: None Current Outside Public Directorships: None | | ||
Director Nomination Process
Criteria for Nomination to the Board
Our Board’s Governance Committee assesses the optimal skills, experiences, and attributes our Board should represent to align its individual and group strengths with our Company’s long-term strategic plan and the interests of our shareholders and stakeholders.
The skills matrix has two sections — a list of core criteria every member of the Board should meet and a list of skills and attributes to be represented collectively by the Board. The core director criteria are:
•
Independence under the Company’s Standards for Director Independence and New York Stock Exchange (“NYSE”) listing requirements, subject to waiver by the Governance Committee;
•
Service on no more than three other public company boards; except our Chief Executive Officer may serve on no more than one other public company board;
•
High integrity and ethical standards;
•
Standing and reputation in the individual’s field;
•
Ability to oversee risks within the individual director’s particular skill set;
•
Understanding of and experience with complex public companies or like organizations; and
•
Ability to work collegially and collaboratively with other directors and management.
Each of our independent director nominees has satisfied all the core director criteria set forth in the skills matrix.
All of the director nominees were elected by our shareholders at the 2021 Annual Meeting except Mr. Garcia, who was appointed unanimously by the Board in November 2021. With respect to that appointment, the Governance Committee considered a number of potential candidates and Mr. Garcia emerged as the finalist due to his overall skill set and experience. Mr. Garcia was initially recommended as a potential director candidate by an external consulting firm.
2022 Proxy Statement | Director Nomination Process | | | 8 | |
| | 1 | | | Board Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
| Director | | | Corporate Governance | | | Finance | | | Health Care Industry | | | Direct Consumer Markets | | | Social Media/ Marketing | | | Diversity | | | Experience with Large Complex Organizations | | | Technology/ Business Processes | | | Clinical Practice | | | Political/ Health Care Policy/ Regulatory | | | Capital Markets | |
| Timothy P. Flynn | | | ![[MISSING IMAGE: tm223410d1-icon_corpoartepn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm223410d1-icon_corpoartepn.jpg){kind=icon} | | | ![[MISSING IMAGE: tm2025328d71-icon_financepn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm2025328d71-icon_financepn.jpg){kind=icon} | | | | | | ![[MISSING IMAGE: tm2025328d71-icon_directpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm2025328d71-icon_directpn.jpg){kind=icon} | | | | | | | | | ![[MISSING IMAGE: tm2025328d71-icon_larcomppn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm2025328d71-icon_larcomppn.jpg){kind=icon} | | | ![[MISSING IMAGE: tm2025328d71-icon_techbuspn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm2025328d71-icon_techbuspn.jpg){kind=icon} | | | | | | ![[MISSING IMAGE: tm2025328d71-icon_politpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm2025328d71-icon_politpn.jpg){kind=icon} | | | ![[MISSING IMAGE: tm2025328d71-icon_markpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm2025328d71-icon_markpn.jpg){kind=icon} | |
| Paul R. Garcia | | | | | | | | | | | | | | | | | | ![[MISSING IMAGE: tm2025328d71-icon_diverpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm2025328d71-icon_diverpn.jpg){kind=icon} | | | | | | | | | | | | | | | | |
| Stephen J. Hemsley | | | | | | | | | ![[MISSING IMAGE: tm2025328d71-icon_healcarpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm2025328d71-icon_healcarpn.jpg){kind=icon} | | | | | | | | | | | | | | | | | | | | | | | | | |
| Michele J. Hooper | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| F. William McNabb III | | | | | | | | | | | | | | | ![[MISSING IMAGE: tm2025328d71-icon_socialpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm2025328d71-icon_socialpn.jpg){kind=icon} | | | | | | | | | | | | | | | | | | | |
| Valerie C. Montgomery Rice, M.D. | | | | | | | | | | | | | | | | | | | | | | | | | | | ![[MISSING IMAGE: tm2025328d71-icon_clinicpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm2025328d71-icon_clinicpn.jpg){kind=icon} | | | | | | | |
| John H. Noseworthy, M.D. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Andrew Witty | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tenure of Director Nominees
Our Governance Committee strives to maintain a balance of tenure on the Board. Long-serving directors bring valuable experience with our Company and familiarity with the successes and challenges the enterprise has faced over the years, while newer directors contribute fresh perspectives. Upon the election of the director nominees presented in this proxy statement, the average tenure of our Board will be 6.6 years following the 2022 annual meeting.
![[MISSING IMAGE: tm223410d1-pc_tenurepn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm223410d1-pc_tenurepn.jpg)
| 2022 Proxy Statement | Director Nomination Process | | | 9 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
Board Diversity
UnitedHealth Group embraces and encourages a culture of inclusion and diversity. Valuing diversity makes good business sense and helps to ensure our future success, because the customers, clients, and consumers we serve are as diverse as the thousands of communities where we live and work across all 50 states in the U.S. and 150 other countries. While our Board does not establish specific goals with respect to diversity, the Board’s diversity is a consideration in the director nomination process and is assessed annually when the Board evaluates its overall effectiveness. We are committed to actively seeking women and racially/ethnically diverse director candidates. The Governance Committee maintains an active recruiting pipeline of potential director candidates based upon skills identified in our skills matrix and includes diverse candidates.
Recent Changes in Board Membership
| | Additions | | | | Departures | | ||||||||||||||||||||||||||||
| | 2021 | | | | 2019 | | | | 2018 | | | | 2017 | | | | 2022 | | | | 2021 | | | | 2020 | | | | 2018 | | | | 2017 | |
| | Andrew Witty(1) Paul R. Garcia | | | | John H. Noseworthy, M.D. | | | | F. William McNabb III | | | | Timothy P. Flynn Valerie C. Montgomery Rice, M.D. Andrew Witty(1) David S. Wichmann | | | | Richard T. Burke Gail R. Wilensky, Ph.D. Mr. Burke and Dr. Wilensky are not Standing for Re-Election at the Annual Meeting | | | | David S. Wichmann Glenn M. Renwick | | | | William C. Ballard, Jr. | | | | Andrew Witty(1) Kenneth I. Shine, M.D. | | | | Rodger A. Lawson Robert J. Darretta | |
(1)
Andrew Witty first joined the Board as an independent director in August 2017, stepped down in March 2018 to serve as CEO of Optum and rejoined the Board in connection with his appointment as the Company’s CEO in February 2021.
Our current slate of director candidates reflects the retirement of two highly-successful and longstanding directors and the addition of a new diverse director in 2021. In October 2021, Michele Hooper was appointed Lead Independent Director. These changes to our Board composition have reduced our average and individual director tenure, and reflect the Board’s ongoing succession planning.
For this year’s election, the Board has nominated eight individuals. All are incumbent directors who collectively bring tremendous diversity to the Board in terms of professional experience, skills and background, as well as diversity of nationality, race and gender. Each nominee is a strategic thinker and has varying, specialized experience in the areas relevant to the Company and its businesses. Moreover, their collective experience covers a wide range of industries, including health care and clinical practice, insurance, consumer products, technology, capital markets and financial services, and roles in academia, corporate governance, government and intergovernmental organizations. The eight director nominees range in age from 57 to 70; two of the eight director nominees are women; two are African American; one is Hispanic; one is a citizen of Canada and one is a citizen of the United Kingdom.
| | 2022 Proxy Statement | Director Nomination Process | | | 10 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
Search Process for New Directors
The Governance Committee screens and recommends candidates for nomination by the full Board. We have for several years maintained an active “evergreen” director candidate pipeline which reflects our continuing commitment to diversity in life, cultural and business experience among director nominees. The Governance Committee will also consider recommendations submitted by shareholders for director candidates. Recommendations should be directed to the Secretary to the Board of Directors. None of the Company’s shareholders recommended candidates for the Board of Directors in connection with the 2022 Annual Meeting.
Prior to the appointment of each of the new independent directors beginning in 2017, the Governance Committee considered a wide slate of potential candidates, including qualified women and racially/ethnically diverse candidates. Each eventual nominee was selected due to his or her overall skills and experience.
![[MISSING IMAGE: tm223410d1-fc_sourcepn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm223410d1-fc_sourcepn.jpg)
Nominating Advisory Committee
The Board of Directors formed the Nominating Advisory Committee in 2006 to provide the Governance Committee with additional input from shareholders and others regarding desirable characteristics of director candidates and the composition of the Board of Directors. The key features of the skills matrix are also discussed with members of our Nominating Advisory Committee and their feedback is considered by the Governance Committee when it updates the skills matrix. The Governance Committee considers, but is not bound by, input provided by the Nominating Advisory Committee. The Nominating Advisory Committee includes four individuals affiliated with long-term shareholders of the Company and one individual who is a member of the medical community. Members of the Nominating Advisory Committee do not receive any compensation from the Company for serving on the Nominating Advisory Committee. The Nominating Advisory Committee met once in 2021. A description of the Nominating Advisory Committee, including a description of how the members of the Nominating Advisory Committee are nominated and selected, can be found on our website at www.unitedhealthgroup.com/who-we-are/corporate-governance.
Shareholder Director Candidates for Inclusion in our Proxy Statement (Proxy Access)
Our Bylaws provide a shareholder or group of shareholders (of up to 20) who have owned at least 3% of our common stock for at least three years the ability to include in our proxy statement shareholder-nominated director candidates for up to 20% of the Board. To be eligible to use this right, the shareholder(s) and the candidate(s) must satisfy the requirements specified in our Bylaws. Our Bylaws are available at www.unitedhealthgroup.com/who-we-are/corporate-governance. For the 2023 Annual Meeting, director nominations submitted under these Bylaw provisions must be received at our principal executive offices, directed to the Secretary to the Board of Directors, no earlier than November 23, 2022 and no later than December 23, 2022.
| | 2022 Proxy Statement | Director Nomination Process | | | 11 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
Shareholder Nominations of Director Candidates at an Annual Meeting
Our shareholders may also nominate candidates for election to the Board at our Annual Meeting of Shareholders, instead of including the director candidate in our proxy statement, by submitting timely written notice to the Secretary to the Board in accordance with our Bylaws. The notice must include the information required by our Bylaws, which are available at www.unitedhealthgroup.com/who-we-are/corporate-governance. For the 2023 Annual Meeting, this notice must be received at our principal executive offices, directed to the Secretary to the Board of Directors, no earlier than
February 6, 2023 and no later than March 8, 2023.
Board Leadership Structure
Our Board of Directors believes having independent Board leadership is an important component of our governance structure. As such, our Bylaws require the Company to have either an independent Chair of the Board or a Lead Independent Director. In October 2021, Michele Hooper was appointed Lead Independent Director, succeeding Richard Burke.
Our Board’s leadership structure also separates the positions of CEO and Chair of the Board. The Board believes this separation is appropriate for the Company at this time because it allows for a division of responsibilities and a sharing of ideas between individuals having different perspectives. The Board will continue to evaluate the Board structure on an ongoing basis.
Our Principles of Governance outline the specific duties of the Lead Independent Director, including:
•
serving as the principal liaison between the independent directors and the Chair of the Board;
•
presiding at all meetings of the Board at which the Chair of the Board is not present and at executive sessions of the Board’s independent directors;
•
calling meetings of the independent directors as appropriate and, in coordination with the Chair of the Board, all members of the Board;
•
facilitating discussion and open dialogue among the independent directors during Board meetings, executive sessions and outside of Board meetings;
•
serving as an ex officio member of each Board committee of which the Lead Independent Director is not a member and working with the Board committee chairs on the performance of their designated roles and responsibilities;
•
working with the Chair of the Board to approve the agendas and meeting schedules for Board meetings;
•
working with the Chair of the Board on the appropriateness (including quality and quantity) and timeliness of information provided to the Board;
•
meeting individually with the Chair of the Board after each regularly scheduled Board meeting;
•
coordinating the preparation of agendas and materials for executive sessions of the Board’s Independent Directors, if any;
•
assisting the Chair of the Governance Committee in reviewing and reporting on the results of the Board and committee performance self-evaluations;
•
communicating to the Chair of the Board any decisions reached, suggestions, views or concerns expressed by Independent Directors in executive sessions or outside of Board meetings;
•
meeting periodically with individual independent directors to discuss Board and committee performance, effectiveness and composition;
| | 2022 Proxy Statement | Board Leadership Structure | | | 12 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
•
where appropriate, supporting the Company in interactions with shareholders and regulators in consultation with the Chief Executive Officer and Chair of the Board; and
•
interviewing, along with the Chair of the Governance Committee, all Board candidates and making director
candidate recommendations to the Governance Committee.
Director Independence
Our Board of Directors has adopted the Company’s Standards for Director Independence, which are available at www.unitedhealthgroup.com/who-we-are/corporate-governance. The Standards for Director Independence requirements exceed the independence standards set by the NYSE.
Our Board of Directors has determined director nominees Timothy P. Flynn, Paul R. Garcia, Michele J. Hooper, F. William McNabb III, Valerie C. Montgomery Rice, M.D., and John H. Noseworthy, M.D., are each “independent” under the NYSE rules and the Company’s Standards for Director Independence, and have no material relationships with the Company that would prevent the directors from being considered independent.
In accordance with the Company’s Standards for Director Independence, the Board of Directors considered, among other factors, the business relationships between the Company and our directors and nominees, their immediate family members (as defined by the NYSE) and their affiliated companies. The Board of Directors considered whether any director or any nominee was a director, partner, significant shareholder or executive officer of an organization that has a relationship with the Company, and also considered charitable contributions the Company or its affiliates made to organizations with which such directors or nominees are or have been associated. In particular, the Board of Directors evaluated the following relationships and determined such relationships were in the normal course of business and did not impair the directors’ ability to exercise independent judgment:
•
Dr. Montgomery Rice is President and Chief Executive Officer of Morehouse School of Medicine. In 2021, Morehouse School of Medicine paid the Company approximately $212,700 for claims software, equipment, maintenance licenses and subscriptions. The Company paid Morehouse School of Medicine approximately $642,900 for services as a network care provider and approximately $595,000 for health care related studies. Total amounts paid by the Company to Morehouse School of Medicine during 2021 were substantially less than 1% of Morehouse School of Medicine’s total revenues for 2021. Dr. Montgomery Rice was not directly involved in these relationships.
•
Mr. Flynn’s brother is President and Chief Executive Officer of Sightpath Medical. Sightpath Medical paid the Company approximately $1.5 million for premium payments in 2021. Total amounts paid by Sightpath Medical to the Company during 2021 were less than 2% of Sightpath Medical’s total revenues for 2021. Mr. Flynn was
not directly involved in this relationship.
Board Committees
The Board of Directors has established four standing committees as listed in the table below. These committees help the Board fulfill its responsibilities and assist the Board in making informed decisions. Each committee operates under a written charter, and evaluates its charter and conducts a committee performance evaluation annually.
| | 2022 Proxy Statement | Director Independence | Board Committees | | | 13 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
The following table identifies the members of each committee as of April 8, 2022:
| | Director | | | Audit and Finance | | | Compensation and Human Resources | | | Governance | | | Health and Clinical Practice Policies | | |||
| Timothy P. Flynn | | | | | | | | | ![[MISSING IMAGE: tm2025328d71-icon_chairpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm2025328d71-icon_chairpn.jpg){kind=icon} | | | ![[MISSING IMAGE: tm2025328d71-icon_memberpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm2025328d71-icon_memberpn.jpg){kind=icon} | | | | |
| | Paul R. Garcia | | | | | | ![[MISSING IMAGE: tm2025328d71-icon_finanexpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm2025328d71-icon_finanexpn.jpg){kind=icon} | | | | | | | | | | |
| | Stephen J. Hemsley | | | | | | | | | | | | | | | | |
| | Michele J. Hooper | | | | | | | | | | | | | | | | |
| | F. William McNabb III | | | | | | | | | | | | | | | | |
| | Valerie C. Montgomery Rice, M.D. | | | | | | | | | | | | | | | | |
| | John H. Noseworthy, M.D. | | | | | | | | | | | | | | | | |
| | Andrew Witty | | | | | | | | | | | | | | | | |
| | | | | Chair | | | | | | Member | | | | | | Financial Expert | |
*
Ms. Hooper is our Lead Independent Director and an ex-officio member of the Compensation and Human Resources Committee, Governance Committee and Health and Clinical Practice Policies Committee. As an ex-officio member, Ms. Hooper has a standing invitation to attend each committee meeting, but does not count for quorum purposes or vote on committee matters.
| | | Audit and Finance Committee | | | Meetings Held in 2021: 10 | | |
| | | Committee Members: | | | |||
| | | F. William McNabb III (Chair), Michele J. Hooper and Paul R. Garcia | | | |||
| | | Primary Responsibilities: | | | |||
| | | The Audit and Finance Committee has responsibility for the selection and retention of the independent registered public accounting firm and oversees financial reporting, internal controls and public disclosure. The Audit and Finance Committee reviews and assesses the effectiveness of the Company’s policies, procedures and resource commitments in the areas of compliance, ethics, privacy and cyber security. The Audit and Finance Committee also oversees management’s processes to identify and quantify material risks facing the Company, management’s investing and financing policies and practices, ESG investment criteria, and assurance of ESG disclosures. The Audit and Finance Committee establishes procedures concerning the receipt, retention and treatment of complaints regarding accounting, internal accounting controls and auditing matters. The Audit and Finance Committee operates as a direct line of communication between the Board of Directors and our independent registered public accounting firm, as well as our internal audit, compliance and legal personnel. | | | |||
| | | Independence: | | | |||
| | | Each of the Audit and Finance Committee members is an independent director under the NYSE listing standards and the SEC rules. The Board of Directors has determined Mr. McNabb, Ms. Hooper and Mr. Garcia are “audit committee financial experts” as defined by the SEC rules. | | | |||
| | 2022 Proxy Statement | | | 14 | |
| | 1 | | | Board of Directors | | | |
| | | Corporate Governance | | | |
| | | Executive Compensation | | | |
| | |
| | | |
| | | Annual Meeting | | | |
| | | Other Information | |
| | | Compensation and Human Resources Committee | | | Meetings Held in 2021: 6 | | |
| | | Committee Members: | | | |||
| | | Timothy P. Flynn (Chair), Valerie C. Montgomery Rice, M.D. and John H. Noseworthy, M.D. | | | |||
| | | Primary Responsibilities: | | | |||
| | | The Compensation and Human Resources Committee is responsible for overseeing (i) our policies and practices related to total compensation for executive officers, (ii) the administration of our incentive and equity based plans, (iii) the risk associated with our compensation practices and plans, and (iv) human capital management, including diversity, equity and inclusion initiatives. The Compensation and Human Resources Committee establishes employment arrangements with our CEO and other executive officers, conducts an annual performance review of the CEO, and reviews and monitors director compensation programs and the Company’s stock ownership guidelines. | | | |||
| | | Independence: | | | |||
| | | Each of the Compensation and Human Resources Committee members is an independent director under the NYSE listing standards and the SEC rules, and a non employee director under the SEC rules. | | | |||
| | | Governance Committee | | | Meetings Held in 2021: 6 | | |
| | | Committee Members: | | | |||
| | | John H. Noseworthy, M.D. (Chair), Timothy P. Flynn and F. William McNabb III | | | |||
| | | Primary Responsibilities: | | | |||
| | | The Governance Committee’s duties include (i) identifying and nominating individuals to be proposed as nominees for election as directors at each annual meeting of shareholders or to fill Board vacancies, (ii) conducting the Board evaluation process, (iii) evaluating the categorical standards which the Board of Directors uses to determine director independence, (iv) providing oversight over ESG policies and practices, including identifying key ESG topics, (v) monitoring and evaluating corporate governance practices, and (vi) reviewing and recommending changes to the Company’s Political Contributions Policy, reviewing political contributions at least semi-annually, and monitoring the Company’s advocacy lobbying processes and activities, including key trade associations and coalition memberships. The Governance Committee also oversees Board processes and corporate governance related risk. | | | |||
| | | Independence: | | | |||
| | | Each of the Governance Committee members is an independent director under the NYSE listing standards. | | | |||
| | 2022 Proxy Statement | Board Committees | | | 15 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
| | | Health and Clinical Practice Policies Committee | | | Meetings Held in 2021: 4 | | |
| | | Committee Members: | | | |||
| | | Valerie C. Montgomery Rice, M.D. (Chair), John H. Noseworthy, M.D., and Stephen J. Hemsley | | | |||
| | | Primary Responsibilities: | | | |||
| | | The Health and Clinical Practice Policies Committee is responsible for assisting the Board of Directors in fulfilling its responsibilities relating to (i) oversight of management’s initiatives to improve health care affordability, clinical care and safety, enhance health care experience, achieve better outcomes, advance health equity and reduce disparities, and (ii) the Company’s public policy, including the identification, evaluation and monitoring of legislative, regulatory and policy issues, both domestic and international, that affect or could affect the Company’s business reputation, business activities and performance. | | | |||
| | | Independence: | | | |||
| | | Drs. Montgomery Rice and Noseworthy are each independent directors under the NYSE listing standards. | | | |||
Board Meetings and Annual Meeting Attendance
Directors are required to attend at least 75% of Board meetings, meetings of committees on which they serve and the Annual Meeting of Shareholders. All of the nominees are expected to attend the 2022 Annual Meeting. During the year ended December 31, 2021, the Board of Directors held 16 meetings. All current directors attended at least 75% of the meetings of the Board and any Board committees of which they were members in 2021.
Board and Committee Evaluations
The Governance Committee oversees the Board and Committee evaluation process. In addition, the Chair of the Board and the Lead Independent Director meet regularly with individual directors to discuss Board and Committee performance, effectiveness and composition.
![[MISSING IMAGE: tm223410d1-tbl_boardpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm223410d1-tbl_boardpn.jpg)
| | 2022 Proxy Statement | Board Meetings and Annual Meeting Attendance | Board and Committee Evaluations | | | 16 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
As part of director feedback received through the annual evaluation process, the Board continues to place a focus on Board and executive leadership succession and development, engaging with management on achievement of the Company’s long-term strategies and direction, and Board and executive leadership and succession and sustainability, diversity, equity and inclusion topics.
The Board of Directors values the input and insights of our shareholders and other interested parties and believes effective communication strengthens the Board’s role as an active, informed and engaged fiduciary. The Board has adopted a Board of Directors Communication Policy to facilitate communication between shareholders and other interested parties and the Board. Under this policy, the Board has designated the Company’s Secretary to the Board of Directors as its agent to receive and review communications. The Secretary to the Board will not forward to the directors communications received which are of a personal nature or not related to the duties and responsibilities of the Board, including, without limitation, mass mailings, business solicitations, routine customer service complaints, new product or service suggestions and opinion surveys.
Appropriate matters to raise in communications to the Board include Board composition; Board and CEO succession planning process; executive compensation; uses of capital; and general Board oversight, including sustainability, human capital management, corporate governance, accounting, internal controls, auditing and other related matters.
The policy, including information on how to contact the Board of Directors, may be found in the corporate governance
section of our website, www.unitedhealthgroup.com/who-we-are/corporate-governance.
Director Compensation
We seek to compensate our non-employee directors fairly for work required for a company of our size, complexity and scope and to align their interests with the long-term interests of our shareholders. Director compensation reflects our desire to attract, retain and benefit from the expertise of highly qualified people.people with backgrounds and experience relevant to our business and those we serve. The Compensation and Human Resources Committee annually reviews the compensation of our non-employee directors and makes recommendations to the Board of Directors. In August 2018,2021, the Compensation and Human Resources Committee, with the advice of its independent compensation consultant, undertook a review of the structure, philosophy and overall mix of the director compensation program as compared to the Company'sCompany’s compensation peer group and also the four large publicly traded managed care and health care companies.and services companies included in the peer group. Following this review, the Compensation and Human Resources Committee recommended and the Board approved, an increase in the annual grant of deferred stock units awardedno changes to non-employee directors from $175,000 to $205,000, effective as of October 1, 2018. No other changes were made to the compensation of non-employee directors. The Compensation Committee's recommendations, and the Board's subsequent approval, were made after considering the results of the market practices review and the complexity of the Company's structure and operations.
director compensation.
| | 2022 Proxy Statement | Communication with the Board of Directors | Director Compensation | | | 17 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
The following table highlights the material elements of our director compensation program:
| | |||||
| Compensation Element | | | Compensation Value ($) | | |
| | Annual Cash Retainer | | 125,000 | | |
| | Annual Chair of the Board Cash Retainer | | | 220,000 | |
| | Annual Audit and Finance Committee Chair Cash Retainer | | 25,000 | | |
| | |||||
| Annual Compensation and Human Resources Committee Chair Cash Retainer | | 20,000 | | ||
| | |||||
| Annual | | 20,000 | | ||
| | |||||
| Annual | | 20,000 | | ||
| | |||||
| Annual Lead Independent Director Cash Retainer | | 75,000 | | ||
| | |||||
| Annual Equity Award | | 205,000 aggregate fair value | |||
| | |||||
| Equity Conversion Program | | | At the converted into DSUs, or if the director has met the stock ownership guidelines, into common stock | ||
| |
*Effective October 1, 2018, the annual deferred stock unit award was increased from $175,000 to $205,000.
Cash Compensation
Cash retainers are payable on a quarterly basis in arrears on the first business day following the end of each fiscal quarter and are subject to pro rata adjustment if the director did not serve the entire quarter. Directors may elect to receive deferred stock units ("DSUs"(“DSUs”) or common stock (if the director has met the stock ownership guidelines) in lieu of their cash compensation or may defer receipt of their cash compensation to a later date pursuant to the Directors'Directors’ Compensation Deferral Plan ("(“Director Deferral Plan"Plan”). The cash retainers are in consideration of general service and responsibilities and required meeting preparation.
Equity-Based Compensation
Non-employee directors receive annual grants of DSUs under the 20112020 Stock Incentive Plan having an aggregate fair value of $205,000 effective October 1, 2018 and pro-rated for the remainder of the year. Prior to October 1, 2018, the aggregate fair value of the DSUs was $175,000.$205,000. The grants are issued quarterly in arrears on
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
the first business day following the end of each fiscal quarter and prorated if the director did not serve the entire quarter. The number of DSUs granted is determined by dividing $51,250 (the quarterly value of the annual equity award; $43,750 prior to October 1, 2018)award) by the closing price of our common stock on the grant date, rounded up to the nearest share. The grants are in consideration of general service and responsibilities and required meeting preparation.
preparation and serve to align the interests of our directors with those of our shareholders.
The DSUs immediately vest upon grant and must be retained until completion of the director'sdirector’s service on the Board of Directors.Board. Upon completion of service, the DSUs convert into an equal number of shares of the Company'sCompany’s common stock. A director may defer receipt of the shares for up to ten years after completion of service pursuant to the Director Deferral Plan. Non-employee directors who have met their stock ownership requirement may elect to receive common stock in lieu of DSUs and/or in-service distributions on pre-selected dates.
If a director elects to convert his or her cash compensation into common stock or DSUs, such conversion grants are made on the day the eligible cash compensation becomes payable to the director. The director receives the number of shares of common stock or DSUs, as applicable, equal to the cash compensation foregone, divided by the closing price of our common stock on the date of grant, rounded up to the nearest share. The DSUs immediately vest upon grant. A director may only elect to receive common stock if he or she has met the stock ownership guidelines.
| | 2022 Proxy Statement | Director Compensation | | | 18 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
The Company pays dividend equivalents in the form of additional DSUs on all outstanding DSUs. Dividend equivalents are paid at the same rate and at the same time that dividends are paid to Company shareholders and are subject to the same vesting conditions as the underlying grant.
Stock Ownership and Retention Guidelines
Under our stock ownership guidelines, we require non-employee directors to achieve ownership of shares of the Company'sCompany’s common stock (excluding stock options, but including vested DSUs and vested restricted stock units) having a fair market value equal to five times the directors'directors’ annual base cash retainer. Non-employee directors must comply with the stock ownership guidelines within five years of their appointment to the Board of Directors. All of our non-employee directors have met the stock ownership requirement or have served as a director for less than five years. Our directors are required to hold all equity awards granted until completion of service on the Board or until they have met our stock ownership requirements.
Director Deferral Plan
Under the Director Deferral Plan, subject to compliance with applicable laws, non-employee directors may elect annually to defer receipt of all or a percentage of their compensation. Amounts deferred are credited to a bookkeeping account maintained for each director participant that uses a predetermined collection of unaffiliated mutual funds as measuring investments. Subject to certain additional rules set forth in the Director Deferral Plan, a participating director may elect to receive the distribution in one of the following ways:
•a series of five or ten annual installments following the completion of his or her service on the Board of Directors;•a delayed lump sum following either the fifth or tenth anniversary of the completion of his or her service on the Board of Directors;
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•for cash deferrals, an immediate lump sum upon the completion of his or her service on the Board of Directors; or•pre-selected amounts to be distributed on pre-selected dates while the director remains a member of the Board of Directors.
The Director Deferral Plan does not provide for matching contributions by the Company.
Other Compensation
We reimburse directors for any reasonable out-of-pocket expenses incurred in connection with service as a director. We also provide health care coverage to directors if the director is not eligible for subsidized coverage under another group health care benefit program. Health care coverage is provided generally on the same terms and conditions as current employees. Upon retirement from the Board of Directors, directors may continue to obtain health care coverage under benefit continuation coverage, and after the lapse of such coverage, under the Company'sCompany’s post-employment medical plan for up to a total of 96 months if they are otherwise eligible.
The Company maintains a program through which it will match up to $15,000 of charitable donations made by each director for each calendar year. The directors do not receive any financial benefit from this program because the charitable income tax deductions accrue solely to the Company. Donations under the program may not be made to family trusts, partnerships or similar organizations.
Our corporate aircraft use policy generally prohibits personal use of corporate aircraft by any independent director. However, because there is essentially no incremental cost to the Company, the policy permits a director's family member to accompany the director on a business flight on Company aircraft provided a seat is available.
| 2022 Proxy Statement | Director Compensation | | |
| |
| |
| | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
Directors | | | |
| | | Corporate Governance | | | |
| | | Executive Compensation | | | |
| | |
| | | |
| | | Annual Meeting | | | |
| | | Other Information | |
The following table provides summary information for the year ended December 31, 2018,2021, relating to compensation paid to or
accrued by us on behalf of our non-employee directors who served in this capacity during 2018.
2021.
Name(1) | | | Fees Earned or Paid In Cash ($)(2) | | | Stock Awards ($)(3) | | | All Other Compensation ($)(4) | | | Total ($) | | ||||||||||||
| Richard T. Burke | | | | | 200,000 | | | | | | 205,573 | | | | | | 28,254 | | | | | | 433,827 | | |
| Timothy P. Flynn | | | | | — | | | | | | 351,182 | | | | | | 23,168 | | | | | | 374,350 | | |
| Paul R. Garcia | | | | | — | | | | | | — | | | | | | 15,000 | | | | | | 15,000 | | |
| Stephen J. Hemsley | | | | | — | | | | | | 550,700 | | | | | | 23,928 | | | | | | 574,628 | | |
| Michele J. Hooper | | | | | 145,000 | | | | | | 205,573 | | | | | | 15,521 | | | | | | 366,094 | | |
| F. William McNabb III | | | | | — | | | | | | 338,682 | | | | | | 8,987 | | | | | | 347,669 | | |
| Valerie C. Montgomery Rice, M.D. | | | | | 39,061 | | | | | | 291,813 | | | | | | 33,100 | | | | | | 363,973 | | |
| John H. Noseworthy, M.D. | | | | | — | | | | | | 330,787 | | | | | | 10,000 | | | | | | 340,787 | | |
| Glenn M. Renwick | | | | | — | | | | | | 244,006 | | | | | | 4,494 | | | | | | 248,500 | | |
| Gail R. Wilensky, Ph.D. | | | | | 145,000 | | | | | | 205,978 | | | | | | 15,000 | | | | | | 365,978 | | |
(1)
Name(1) | Fees Earned or Paid in Cash ($)(2) | Stock Awards ($)(3) | Option Awards ($)(4) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(6) | Total ($) | | ||||||||||||||||||||
William C. Ballard, Jr. | | | 131,484 | | | 175,331 | | | — | | | | — | | | | 18,490 | | | 325,395 | | ||||||
| | | | | | | | | | | | | | | ||||||||||||||
Richard T. Burke | | | 200,000 | | | 175,331 | | | — | | | | — | | | | 30,654 | | | 406,075 | | ||||||
| | | | | | | | | | | | | | | ||||||||||||||
Timothy P. Flynn | | | — | | | 300,658 | | | — | | | | — | | | | 24,892 | | | 325,550 | | ||||||
| | | | | | | | | | | | | | | ||||||||||||||
Michele J. Hooper | | | 145,000 | | | 175,331 | | | — | | | | — | | | | 18,374 | | | 338,795 | | ||||||
| | | | | | | | | | | | | | | ||||||||||||||
Rodger A. Lawson | | | 97,990 | | | 118,599 | | | — | | | | — | | | | 22,350 | | | 238,610 | | ||||||
| | | | | | | | | | | | | | | ||||||||||||||
F. William McNabb III | | | — | | | 189,626 | | | — | | | | — | | | | — | | | 189,626 | | ||||||
| | | | | | | | | | | | | | | ||||||||||||||
Valerie C. Montgomery Rice, M.D. | | | 125,000 | | | 175,331 | | | — | | | | — | | | | 18,000 | | | 318,421 | | ||||||
| | | | | | | | | | | | | | | ||||||||||||||
Glenn M. Renwick | | | — | | | 325,526 | | | — | | | | — | | | | 27,189 | | | 352,715 | | ||||||
| | | | | | | | | | | | | | | ||||||||||||||
Kenneth I. Shine, M.D. | | | 125,000 | | | 175,331 | | | — | | | | — | | | | 18,000 | | | 318,421 | | ||||||
| | | | | | | | | | | | | | | ||||||||||||||
Gail R. Wilensky, Ph.D. | | | 145,000 | | | 175,600 | | | — | | | | — | | | | 18,000 | | | 338,690 | | ||||||
| | | | | | | | | | | | | | | ||||||||||||||
Andrew P. Witty | | | 56,250 | | | 78,976 | | | — | | | | — | | | | 18,000 | | | 153,226 | | ||||||
| | | | | | | | | | | | | | | ||||||||||||||
(1)Messrs. Hemsley and Wichmann are employee directors and do not receive additional compensation for serving as directors. Dr. Noseworthy joined the Board on February 12, 2019 and is not included in the table.Mr.McNabb joined the Board on February 13, 2018, and compensation was prorated from that date. Dr. Shine retired from the Board of Directors, effective December 31, 2018. Mr. LawsonRenwick did not stand for re-election at the20182021 Annual Meeting ofShareholders. For Mr. Witty, the amounts reported reflect compensation earned in connection with his serviceShareholders and ceased serving as a member of the Board of Directors on June 7, 2021. Because directorthrough March 13, 2018. Compensationcompensation is paid quarterly inconnection witharrears and Mr.Witty's service as Chief Executive OfficerGarcia joined the Board on November 2, 2021, he did not receive any cash or equity compensation in 2021, although the Company matched $15,000 in charitable contributions he made in 2021.
(2)
Directors converted some or all of Optum, which commenced on July 1, 2018, is reported in the Summary Compensation Table and additional tabular disclosures, as appropriate.
(2)Mr. Flynn converted his $125,000 cash compensation payable to such director into 530 DSUs Mr. McNabb converted his $78,820 cash compensation into 320 DSUs and Mr. Renwick converted his $150,000 cash compensation into 635 DSUs.as follows:
| Name | | | Amount of Cash ($) | | | Deferred Stock Units (#) | | ||||||
| Timothy P. Flynn | | | | | 145,608 | | | | | | 386 | | |
| Stephen J. Hemsley | | | | | 345,532 | | | | | | 916 | | |
| F. William McNabb III | | | | | 133,881 | | | | | | 354 | | |
| Valerie C. Montgomery Rice, M.D. | | | | | 86,239 | | | | | | 227 | | |
| John H. Noseworthy, M.D. | | | | | 125,985 | | | | | | 334 | | |
| Glenn M. Renwick | | | | | 37,746 | | | | | | 108 | | |
(3)
(3)
The amounts reported reflect the aggregate grant date fair value of the stock awards granted in 20182021 computed in accordance with FASB ASC Topic 718, based on the closing price of our common stock on the grant date. For a description of the assumptions used in computing the aggregate grant date fair value, see Note 11 to the Consolidated Financial Statements included in the Company'sCompany’s Annual Report on Form 10-K for the year ended December 31, 2018.2021. For each director, the amounts reported include the aggregate grant date fair value of the annual equity award of DSUs granted in quarterly installments. The amounts reflect the value of fractional shares issued with the quarterly installments as we round equity grants up to the nearest whole share. For Messrs. Flynn, McNabb and Renwick, we combined the cash compensation they elected to convert into DSUs on a quarterly basis and the value of the quarterly DSU grant prior to determining the number of DSUs to be granted each quarter. For 2018, Dr. Shine elected that all of his, and2021, Dr. Wilensky elected thatfor a portion of her annual DSU awards be granted in shares of common stock.
| 2022 Proxy Statement | 2021 Director Compensation Table | | |
| |
| |
| | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
Directors | | | |
| | | Corporate Governance | | | |
| | | Executive Compensation | | | |
| | |
| | | |
| | | Annual Meeting | | | |
| | | Other Information | |
The aggregate grant date fair values of the stock awards granted in 2018,2021, computed in accordance with FASB ASC Topic 718 based on the closing price of our common stock on the grant date, are as follows:
| Name | | | January 4, 2021 ($) | | | April 1, 2021 ($) | | | July 1, 2021 ($) | | | October 1, 2021 ($) | | ||||||||||||
| Richard T. Burke | | | | | 51,377 | | | | | | 51,390 | | | | | | 51,421 | | | | | | 51,386 | | |
| Timothy P. Flynn* | | | | | 87,725 | | | | | | 87,730 | | | | | | 87,861 | | | | | | 87,866 | | |
| Stephen J. Hemsley* | | | | | 137,703 | | | | | | 137,651 | | | | | | 137,663 | | | | | | 137,683 | | |
| Michele J. Hooper | | | | | 51,377 | | | | | | 51,390 | | | | | | 51,421 | | | | | | 51,386 | | |
| F. William McNabb III* | | | | | 82,832 | | | | | | 82,591 | | | | | | 84,217 | | | | | | 89,043 | | |
| Valerie C. Montgomery Rice, M.D.* | | | | | 67,104 | | | | | | 74,882 | | | | | | 74,905 | | | | | | 74,922 | | |
| John H. Noseworthy, M.D.* | | | | | 82,832 | | | | | | 82,591 | | | | | | 82,598 | | | | | | 82,767 | | |
| Glenn M. Renwick* | | | | | 88,773 | | | | | | 88,831 | | | | | | 66,402 | | | | | | — | | |
| Gail R. Wilensky, Ph.D. | | | | | 51,377 | | | | | | 51,390 | | | | | | 51,826 | | | | | | 51,386 | | |
*
Name | | January 2, 2018 ($) | | April 2, 2018 ($) | | July 2, 2018 ($) | | October 1, 2018 ($) | | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
William C. Ballard, Jr. | | | 43,790 | | | | 43,874 | | | | 43,804 | | | | 43,863 | | | ||||
Richard T. Burke | | | 43,790 | | | | 43,874 | | | | 43,804 | | | | 43,863 | | | ||||
Timothy P. Flynn* | | | 75,194 | | | | 75,151 | | | | 75,234 | | | | 75,079 | | | ||||
Michele J. Hooper | | | 43,790 | | | | 43,874 | | | | 43,804 | | | | 43,863 | | | ||||
Rodger A. Lawson | | | 43,790 | | | | 43,874 | | | | 30,935 | | | | — | | | ||||
F. William McNabb III* | | | — | | | | 39,313 | | | | 75,234 | | | | 75,079 | | | ||||
Valerie C. Montgomery Rice, M.D. | | | 43,790 | | | | 43,874 | | | | 43,804 | | | | 43,863 | | | ||||
Glenn M. Renwick* | | | 81,387 | | | | 81,450 | | | | 81,421 | | | | 81,268 | | | ||||
Kenneth I. Shine, M.D. | | | 43,790 | | | | 43,874 | | | | 43,804 | | | | 43,863 | | | ||||
Gail R. Wilensky, Ph.D. | | | 43,790 | | | | 43,874 | | | | 43,804 | | | | 44,132 | | | ||||
Andrew P. Witty | | | 43,790 | | | | 35,186 | | | | — | | | | — | | | ||||
*- Includes the value of DSUs issued upon conversion of annual cash retainers as described in footnote
12 above of$125,000$145,608 for Mr. Flynn,$78,820$345,532 for Mr. Hemsley, $133,881 for Mr. McNabb, $86,239 for Dr. Montgomery Rice, $125,985 for Dr. Noseworthy, and$150,000$37,746 for Mr. Renwick.
-
As of December 31, 2018,2021, our non-employee directors held outstanding DSU awards as follows:
Name | |||||||
|---|---|---|---|---|---|---|---|
| | | Deferred Stock Units | | |||
| Richard T. Burke | | | | | 26,512 | | |
| | | | 6,232 | | | |
| | | | — | | | |
| | | | 3,427 | | | |
| | | | 33,500 | | | |
| | | | 4,375 | | | |
| | | | 3,539 | | | |
| | | | 3,026 | | | |
| | | | 5,889 | | | |
| Gail R. Wilensky, Ph.D. | | | | | 23,577 | | |
(4)
(4)The Company did not grant stock option awards to directors in 2018. As of December 31, 2018, our non-employee directors held outstanding (and unexercised) stock option awards as follows: Mr. Ballard — 10,000; Mr. Burke — 15,000; and Dr. Wilensky — 10,860.(5)The Director Deferral Plan does not credit above-market earnings or preferential earnings to the amounts deferred. There are no measuring investments tied to Company stock performance. The measuring investments are a predetermined collection of unaffiliated mutual funds identified by the Company.(6)- In
2018,2021, the Company matched$15,000 incharitable contributions made by the following directors to charitable organizations selected by the directors pursuant to theCompany'sCompany’s Board Matching Program: $15,000 for Messrs.Ballard,Burke, Flynn,Lawson, RenwickGarcia andWitty;Hemsley, Ms. Hooper and Drs. Montgomery RiceShineandWilensky,Wilensky; and$14,884 in charitable contributions made by Ms. Hooper.$10,000 for Dr. Noseworthy. In2018, the Company also made $3,000 contributions to charitable organizations selected by the following directors: Messrs. Ballard, Burke, Flynn, Lawson, Renwick and Witty; Ms. Hooper; and Drs. Shine, Montgomery Rice and Wilensky. In 2018,2021, the Company also paid$12,654, $9,189, $6,892, $4,350, $490$13,254, $8,168, $8,928, $4,494, $8,987 and$490$521 in health care premiums on behalf of Messrs. Burke, Flynn, Hemsley, RenwickFlynn, Lawson, Ballardand McNabb and Ms. Hooper, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | 21 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
Corporate Governance
UnitedHealth Group is committed to high standards of corporate governance and ethical business conduct. Important documents reflecting this commitment are listed below.
| | |||||||||
| Corporate Governance Documents | | ||||||||
| | •  Certificate of Incorporation | | | • | Code of Conduct: Our Principles of Ethics & Integrity | | |||
| | • Bylaws | | | • | Related-Person Transactions Approval Policy | | |||
| | • Principles of Governance | | | • | Board of Directors Communication Policy | | |||
| | • Board of Directors Committee Charters | | | | • Political Contributions Policy | | ||
| | • Standards for Director Independence | | | • Corporate Environmental Policy | | |||
| | Director Conflict of Interest Policy | | |||||||
You can access these documents atwww.unitedhealthgroup.com/about/who-we-are/corporate-governance to learn more about our corporate governance practices. We will also provide copies of these documents without charge upon written request to the Company'sCompany’s Secretary to the Board of Directors.
Commitment to Effective Corporate Governance
| | Board Accountability to Shareholders | | ||||
| | Annual Election | | | | All directors stand for election by majority vote annually | |
| | Proxy Access | | | | Proxy access with market terms | |
| | Majority Voting Standard/Irrevocable Offer to Resign | | | | Majority voting in uncontested director elections; directors tender an irrevocable offer to resign if they do not receive majority vote and the Board will accept such offer to resign absent a compelling reason | |
| | Special Meeting / Written Consent Rights | | | | Shareholders have the rights to call a special meeting and act by written consent | |
| | No Poison Pill | | | | No shareholder rights plan (commonly referred to as a “poison pill”) | |
| | Shareholder Voting Rights in Proportion to Economic Interests | | ||||
| | One Share, One Vote | | | | No dual class structure; each share of common stock is entitled to one vote | |
| | No Supermajority Requirements | | | | No supermajority shareholder approval requirements | |
| | Board Responsiveness to Shareholders / Proactive Understanding of Shareholder Perspectives | | ||||
| | Shareholder Engagement Process | | | | Management and Board members met with key shareholders in 2021 | |
| | Shareholder engagement topics included Board composition, leadership and refreshment, executive compensation program, diversity and inclusion, sustainability, climate change, cyber security, human capital and social topics | | ||||
| | 2022 Proxy Statement | Overview | | | 22 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
| | Strong Independent, Board Leadership Structure | | ||||
| | Board Leadership | | | | Separate CEO and Chair of the Board | |
| | Lead Independent Director | | | | Lead Independent Director with clearly defined and robust duties | |
| | Annual Review | | | | Board considers appropriateness of its leadership structure at least annually | |
| | Committee Membership | | | | Independent Committee chairs with clear charters and oversight mandates | |
| | Disclosure | | | | Proxy discloses why Board believes current leadership structure is appropriate | |
| | Adopt Structures and Practices Enhancing Board Effectiveness | | ||||
| | Independence | | | | 75% of our Board members are independent | |
| | Diversity | | | | 3/8 of our director nominees are ethnically diverse, 1/4 are women and 1/4 are African American | |
| | Board and Committee Evaluations | | | | Annual Board and Committee evaluation conducted by independent consultant and led by the Chair of Governance Committee | |
| | Board Succession Planning | | | | Active Board succession plan; seven Board members added since 2017, six of whom are standing for election | |
| | Attendance | | | | Directors attended 99% of combined total Board and applicable committee meetings in 2021 and all then-current directors attended the 2021 Annual Meeting | |
| | Board Service Limits | | | | Independent directors may serve on no more than three other public company boards; and our CEO may serve on no more than one other public company board | |
| | Executive Sessions | | | | Frequent executive sessions of independent directors held | |
| | Conflicts of Interest | | | | To avoid potential conflicts of interest, a director is required to seek approval of the Governance Committee if the director or his/her immediately family member proposes to engage in a transaction or activity in the health care field | |
| | Disclosure | | | | Full disclosure of corporate governance policies and practices | |
| | ESG Oversight | | | | Board oversight over ESG strategy as codified in Board Committee charters; Company appointed Chief Sustainability Officer | |
| | Align Management Incentive Structures with Long-Term Strategy | | ||||
| | Say on Pay Results | | | | Executive Compensation program received more than 95% shareholder support from 2011 through 2020; responsive actions taken to address topics identified by shareholders in connection with 2021 say on pay result of 72% support | |
| | Annual Review of Compensation Program | | | | Compensation and Human Resources Committee annually reviews and approves incentive program design, goals and objectives for alignment with compensation and business strategies | |
| | 2022 Proxy Statement | Overview | | | 23 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
| | Align Management Incentive Structures with Long-Term Strategy | | ||||
| | Incentive Programs Linked to Strategy | | | | Annual and long-term incentive programs are designed to reward financial and operational performance that furthers short- and long-term strategic objectives | |
| | Non-Financial Performance Goals | | | | A portion of our annual incentive award is dependent upon the achievement of goals of customer, provider and employee satisfaction, which are viewed to be important to achieving long-term success for the Company | |
| | Clawback Policy | | | | Clawback policy entitles the Board to seek cash or equity reimbursement from our senior executives if they are directly involved in fraud or misconduct causing a material restatement, material detrimental conduct or violate non-compete, non-solicit or confidentiality provisions. | |
Strong and effective governance practices are critical to UnitedHealth Group’s long-term value creation. The Board has enhanced governance policies over time to align with best practices, drive sustained shareholder value and serve the interests of shareholders. Our key corporate governance practices are highlighted below.
Board Structure and Shareholder Rights
•All members of our Board of Directors are elected annuallyalign with the corporate governance principles developed byour shareholders.•Our Certificate of Incorporation provides, in an uncontested election, each director must be elected by a majority vote. To address a provision in Delaware law that allows a director who has not been re-elected to remain in office until a successor is elected and qualified, we have a policy requiring any director who does not receive a greater number of votes "for" than "against" his or her election in an uncontested election to tender his or her resignation fromtheBoard of Directors following certificationInvestor Stewardship Group (ISG), which includes some of theshareholder vote.•Our Bylaws provide eligible shareholders the right to include shareholder director nominees representing up to 20% of the Board in our proxy statement.•Each share of stock is entitled to one votelargest institutional investors andour Certificate of Incorporationglobal asset
managers and Bylaws do not have any supermajority shareholder approval provisions.
•We have an Executive Chairman of the Board and a Lead Independent Director.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Board and Board Committee Composition and Performance
•All members of our Audit Committee are "audit committee financial experts" as defined by the Securities and Exchange Commission ("SEC").•A non-management director may not serve on more than three other public company boards of directors, and our CEO may not serve on more than one other public company board of directors.•Our directors are required to offer their resignations upon a change in their primary careers.•Our Board of Directors and each Board committee regularly conduct executive sessions of non-management directors. Our Lead Independent Director presides over each executive session of non-management directors. Committee Chairs preside over executive sessions of their respective committees.•Our Board of Directors and Board committees have the authority to retain independent advisors.•Our Board of Directors and Board committees conduct performance reviews annually.
Guidelines and Board Policies
•Our Board of Directors has developed a CEO succession plan with input from our CEO and reviews the plan annually. The CEO succession plan has two components: one addressing an emergency or unanticipated loss of our CEO and one addressing longer-term succession. Material features of this plan include identification of Board members to lead the succession process, identification and development of internal candidates and identification of external resources necessary to ensure a successful transition.•We maintain stock ownership and retention guidelinesadvocates fordirectors and executive officers. See "Compensation Discussion and Analysis — Elements of Our Compensation Program — Other Compensation Practices — Executive Stock Ownership Guidelines and Stock Retention Policy," "Director Compensation — Equity-Based Compensation" and "Director Compensation — Stock Ownership and Retention Guidelines" for further information.•We have a related-person transactions approval policy regarding the review, vote and ratification by our Nominating Committee on all proposed related-person transactions. See "Certain Relationships and Transactions."•We have a clawback policy that entitles the Board of Directors to seek reimbursement from our senior executives if they are involved in fraud or misconduct that causes a material restatement or in the event of a senior executive's violation of non-compete, non-solicit or confidentiality provisions. See "Compensation Discussion and Analysis — Elements of Our Compensation Program — Other Compensation Practices — Potential Impact on Compensation from Executive Misconduct/Compensation Clawbacks."•We have a political contributions policy that is overseen by our Public Policy Strategies and Responsibility Committee (the "Public Policy Committee"). The Company's political contributions and public advocacy efforts and the contributions of our federal and state political action committees are disclosed on our website.•We have an environmental policy that outlines our focus on minimizing our impact on the environment and creating a Company culture that heightens our employees' awareness of the importance of preserving the environment and conserving energy and natural resources.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•Our insider trading policy prohibits all directors, executive officers and employees from engaging in short sales and hedging transactions relating to our common stock, and requires advance approval of the Compensation Committee of any pledging of common stock by directors, executive officers and other members of management.•Our Board of Directors believes that effective Board-shareholder communication strengthens the Board of Directors' role as an active, informed and engaged fiduciary, so we have a communication policy that outlines how shareholders and other interested parties may communicate with the Board of Directors. See "Corporate Governance — Communication with the Board of Directors."•A Nominating Advisory Committee comprised of representatives from the shareholder and medical communities provides input into the composition of our Board of Directors.
Our Certificate of Incorporation and Bylaws, together with Delaware law and NYSE and SEC rules, govern the Company. Our Board has also adopted "Principles of Governance," which set forth many of ourbest practices policies and procedures in corporate governance. The policies and practices covered in our Principles of Governance include shareholder rights and proxy voting; structure, composition and performance of the Board of Directors; stock ownership and retention requirements; Board of Directors operation; individual director responsibilities; and Board committees. Our Principles of Governance are reviewed at least annually by our Nominating Committee and are revised as necessary.
Our Board adopts and oversees enforcement of the Company’s Global Code of Conduct: Our Principles of Ethics & Integrity document is posted onConduct (Code). Foundational to the Company’s compliance and ethics program and subject to periodic ethical risk assessments, our websiteCode defines responsibilities, accountabilities and covers our principles and policiesreporting lines related to business conduct, conflicts of interest, public disclosure practices, legal compliance obligations, and other areas. The Code also describes misconduct reporting and accountability, corporate opportunities,whistleblower legal protections, reporting confidentiality and helpline contact information, violation actions (including termination and possible legal action), non-retaliation principles, fair dealing, and the protection and proper use of personal information and Company assets. The Code is available on the Company’s website.
Any waiver of the Code of Conduct for the Company'sCompany’s executive officers, senior financial officers or directors may be made only by the Board of Directors or a committee of the Board. We will publish any amendments to the Code of Conduct and waivers of the Code of Conduct for an executive officer or director on our website.
Our entire global workforce, including independent contractors and part-time employees, receives periodic training on our Code and other ethical standards.
We strongly and broadly encourage employees to raise ethics and compliance concerns, including concerns about accounting, internal controls or auditing matters. We offer several channels for employees and third parties to report ethics and compliance concerns or incidents, including by telephone or online, and individuals may choose to remain anonymous in jurisdictions where anonymous reporting is permissible. We prohibit retaliatory action against any individual who in good faith raises concerns or questions regarding ethics and compliance matters or reports suspected violations. We train all employees annually and periodically advise them regarding the means by which they may report possible ethics or compliance issues and their affirmative responsibility to report any possible issues. In our 2018 employee survey, 96% of employees said they knew what to do if they believed unethical behavior or misconduct occurred in their work area.
| 2022 Proxy Statement | Code of Conduct | Compliance and Ethics | | |
| |
| |
| | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
Directors | | | |
| | | Corporate Governance | | | |
| | | Executive Compensation | | | |
| | |
| | | |
| | | Annual Meeting | | | |
| | | Other Information | |
Our Board of Directors has adopted the Company's Standards for Director Independence, which are available on our website atwww.unitedhealthgroup.com/about/corporate-governance. The Standards for Director Independence requirements exceed the independence standards set by the NYSE.
Our Board of Directors has determined that William C. Ballard, Jr., Richard T. Burke, Timothy P. Flynn, Michele J. Hooper, F. William McNabb III, Valerie C. Montgomery Rice, M.D., John H. Noseworthy, M.D., Glenn M. Renwick and Gail R. Wilensky, Ph.D. are each "independent" under the NYSE rules and the Company's Standards for Director Independence, and have no material relationships with the Company that would prevent the directors from being considered independent. Stephen J. Hemsley, Executive Chairman of the Board, and David S. Wichmann, CEO, are not independent directors.
In determining independence, the Board of Directors considered, among other factors, the business relationships between the Company and our directors and nominees, their immediate family members (as defined by the NYSE) and their affiliated companies. The Board of Directors considered whether any director or any nominee was a director, partner, significant shareholder or executive officer of an organization that has a relationship with the Company, and also considered charitable contributions that the Company or its affiliates made to organizations with which such directors or nominees are or have been associated. In particular, the Board of Directors evaluated the following relationships and determined that such relationships were in the normal course of business and did not impair the directors' ability to exercise independent judgment:
•Mr. Burke is an owner of Rainy Partners, LLC. Rainy Partners is a customer of the Company and paid the Company premiums for health insurance of approximately $398,600 in 2018. These premiums were determined on the same terms and conditions as premiums for other comparable customers.•Dr. Montgomery Rice is President and Dean of Morehouse School of Medicine. In 2018, Morehouse School of Medicine paid the Company approximately $175,600 for claims software and medical records review services. The Company paid Morehouse School of Medicine approximately $910,000 for services as a network care provider in 2018. Total moneys paid by the Company and the United Health Foundation to Morehouse School of Medicine during 2018 were substantially less than 1% of Morehouse School of Medicine's total revenues for 2018. Dr. Montgomery Rice was not directly involved in these relationships.
The Board of Directors also considered relationships between the Company and organizations on which our non-employee directors or their immediate family members serve only as directors and determined that such relationships did not impair the directors' exercise of independent judgment.
Our Board of Directors believes having independent Board leadership is an important component of our governance structure. As such, our Bylaws require the Company to have either an independent Chairman of the Board or a Lead Independent Director. Our current Board of Directors' leadership structure also separates the positions of CEO and Chairman of the Board. The Board believes this separation is appropriate for the Company at this time because it allows for a division of responsibilities and a sharing of ideas between individuals having different perspectives.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In connection with the CEO succession that took place in 2017, our Board created the position of Executive Chairman. The Board unanimously selected Mr. Hemsley to serve as our Executive Chairman due to his vision for the Company's future and his understanding of the Company and its evolving competitive environment. Given that Mr. Hemsley is not an independent director under applicable NYSE rules, the Board determined to continue the strong voice of independent directors and created the role of Lead Independent Director. Mr. Burke was appointed to serve as Lead Independent Director.
Our Principles of Governance outline the specific duties of the Lead Independent Director, including:
•serving as the principal liaison between the Independent Directors and the Chairman;•presiding at all meetings of the Board at which the Chairman is not present and at executive sessions of the Board's Independent Directors;•calling meetings of the Independent Directors as appropriate and, in coordination with the Chairman, all members of the Board;•facilitating discussion and open dialogue among the Independent Directors during Board meetings, executive sessions and outside of Board meetings;•serving as an ex officio member of each Board committee of which the Lead Independent Director is not a member and working with the Board committee chairs on the performance of their designated roles and responsibilities;•working with the Chairman to approve the agendas and meeting schedules for Board meetings;•working with the Chairman on the appropriateness (including quality and quantity) and timeliness of information provided to the Board;•meeting individually with the Chairman after each regularly scheduled Board meeting;•coordinating the preparation of agendas and materials for executive sessions of the Board's Independent Directors, if any;•leading the Board's annual goal setting and evaluation process for the Chairman;•assisting the Chair of the Nominating and Corporate Governance Committee in reviewing and reporting on the results of the Board and committee performance self-evaluations;•communicating to the Chairman any decisions reached, suggestions, views or concerns expressed by Independent Directors in executive sessions or outside of Board meetings;•meeting periodically with individual Independent Directors to discuss Board and committee performance, effectiveness and composition;•where appropriate, supporting the Company in interactions with shareholders and regulators in consultation with the Chief Executive Officer and Chairman; and•interviewing, along with the Chair of the Nominating and Corporate Governance Committee, all Board candidates and making director candidate recommendations to the Nominating and Corporate Governance Committee.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enterprise-Wide Risk Oversight
Our Board of Directors oversees management'smanagement’s enterprise-wide risk management activities. Risk management activities include assessing and taking actions necessary to manage risk incurred in connection with the long-term strategic direction and operation of our business. Each director on our Board is required to have risk oversight ability for each skill and attribute the director possesses that is reflected in the collective skills section of our director skills matrix described in "Proposal“Proposal 1 — Election of Directors — Director Nomination Process — Criteria for Nomination to the Board"Board” above. Collectively, our Board of Directors uses its committees to assist in its risk oversight function as follows:
•
The Audit and Finance Committee oversees management'smanagement’s internal controls and compliance activities. The Audit and Finance Committee also oversees management'smanagement’s processes to identify and quantify material risks facing the Company, including risks disclosed in the Company'sCompany’s Annual Report on Form 10-K. The enterprise risk management function assists the Company in identifying and assessing the Company'sCompany’s material risks. The Company'sCompany’s General Auditor, who reports to the Audit and Finance Committee, assists the Company in evaluating risk management controls and methodologies. The Audit and Finance Committee receives periodic reports on the enterprise risk management function. The Audit Committee also receives periodic reports onfunction and the Company'sCompany’s cyber security efforts.efforts and meets periodically with management to review the Company’s significant risks and the steps management has taken to monitor, control or mitigate such risks. In connection with its risk oversight role, the Audit and Finance Committee regularly meets privately with representatives from the Company'sCompany’s independent registered public accounting firm and the Company's CFO,Company’s Chief Financial Officer, General Auditor and Chief Legal Officer;
•
•
The Compensation and Human Resources Committee oversees riskrisks associated with our compensation policies, practices and plans;plans and human capital management practices;
•
•
The NominatingGovernance Committee oversees Board processes and corporate governance-related risk;risk, community and charitable activities and overall strategy on ESG policies and practices; and
•
•
The Public PolicyHealth and Clinical Practice Policies Committee oversees (i) management’s initiatives to improve health care affordability, clinical care and safety, enhance the health care experience, achieve better health outcomes, advance health equity and reduce disparities, and (ii) risk associated with the public policy arena, including health care reform and modernization activities, political contributions, government relations, community and charitable activitiesrisk related to health and corporate social responsibility.
clinical practices.
Our Board of Directors maintains overall responsibility for oversight of the work of its various committees by receiving regular reports from the Committee Chairscommittee chairs regarding their work. In addition, discussions about the Company'sCompany’s culture, strategic plan, consolidated and segment business results, capital structure, merger and acquisition-related activities and other business discussed with the Board of Directors include a discussion of the risks associated with the particular item under consideration.
Our Board of Directors and Board committees also have authority to retain independent advisers. Our Board of Directors’ and committee’s respective processes for managing cyber security risk oversight and incentive compensation risk are set forth below.
We believe health care data and related information should be used solely for the purposes of improving individual health, advancing health system performance and to aid in new health care discoveries. We operate in a sector where the use of health care information is highly regulated. Federal, state, and international laws and contractual commitments regulate our collection, use and disclosure of confidential information such as protected health information and personally identifiable information. Our success depends on maintaining a high level of trust among consumers, clients, providers, regulators and our associates. Protecting this information is critical and is reflected in our Code of Conduct, security standards, and privacy policies.
| | 2022 Proxy Statement | | | | 25 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
The Audit and Finance Committee has oversight of our cyber security program and receives regular updates from our Chief Information Security Officer. We devote significant resources to protecting and evolving the security of our computer systems, software, networks and other technology assets in response to a continually changing threat landscape. The operating maturity of our cyber security program is benchmarked against a continuously updated set of control requirements based upon the HITRUST framework and is subject to an annual external certification process by the HITRUST Alliance. An incidence response preparedness assessment was conducted in 2020 by a leading external cyber security company.
We provide annual security-awareness and privacy training to all of our employees, including part-time and temporary, and contractors, which covers timely and relevant topics, including social engineering, phishing, password protection, confidential data protection, asset use and mobile security. Our comprehensive privacy-incident response and prevention program educates associates on the importance of reporting all incidents immediately. Each incident is reviewed and action is taken to address issues identified, mitigate any potential impact and assess our obligations to notify consumers, clients, regulators, the media and others. Information regarding how we manage data privacy and cyber security is available at https://www.unitedhealthgroup.com/content/sustainability/en/responsible-business/data-privacy.html.
Incentive Compensation Risk Assessment
Our Compensation and Human Resources Committee requested that management to conduct an annual risk assessment of the Company'sCompany’s enterprise-wide compensation programs. The risk assessment reviewed both cash incentive compensation plans and individual cash incentive awards paid in 20182021 for the presence of potential design elements that could motivate employees to incur excessive risk. The review included the ratio and level of incentive to fixed compensation, the amount of manager discretion, the level of compensation expense relative to the business units'units’ revenues, and the presence of other design features thatwhich serve to mitigate excessive risk-taking, such as the Company'sCompany’s clawback policy, stock ownership and retention guidelines, multiple performance measures and similar features.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After considering the results of the risk assessment, management concluded that the level of risk associated with the Company'sCompany’s enterprise-wide compensation programs is not reasonably likely to have a material adverse effect on the Company. The results of the risk assessment were reviewed with the Compensation and Human Resources Committee at its February 20192022 meeting. Please see "Compensation“Compensation Discussion and Analysis"Analysis” for a discussion of compensation design elements intended to mitigate excessive risk-taking by our executive officers.
The Compensation and Human Resources Committee also receives an annual report on the Company'sCompany’s compliance
with its equity award program controls.
Governance (ESG) with Our Long-Term Strategy
Directors
What Sustainability Means to Us
Sustainability is an extension of our business strategy, culture and mission as we work to help ensure the health care system works better for everyone. At UnitedHealth Group, we are expectedcommitted to attend Board meetings, meetings of committeesproviding distinct value for those we are privileged to serve, including our shareholders and society broadly.
We are dedicated to earning the opportunity to serve more people and drive shareholder and societal value by focusing on which they servethe following key topics determined through broad stakeholder engagement and the Annual Meeting of Shareholders. All then-current directors attended the 2018 Annual Meeting. During the year ended December 31, 2018, theapproval from our senior leaders and Board of Directors held twelve meetings. All then-current directors attended at least 75% of the meetings of the Board and any Board committees of which they were members in 2018.
The Board of Directors has established four standing committees: Audit, Compensation, Nominating and Public Policy. These committees help the Board fulfill its responsibilities and assist the Board in making informed decisions. Each committee operates under a written charter, and evaluates its charter and conducts a committee performance evaluation annually.
The following table identifies the members of each committee as of April 9, 2019:
*Mr. Burke is the Lead Independent Director and an ex-officio member of the Compensation Committee and Public Policy Committee. As an ex-officio member, Mr. Burke has a standing invitation to attend each committee meeting, but does not count for quorum purposes or vote on committee matters.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors.
| | ||||||
2022 Proxy Statement | Alignment of Environment, Social and Governance (ESG) with Our Long-Term Strategy | | | 26 | |
| | 1 | | | Board of Directors | | | | |
| | | |||||||
| | | | | | ||||
Executive Compensation | ||||||||
| | | | ||||||
| 4 | | | ||||||
| | | | | | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Meeting |
|
|
|
|
|
|
| | | | 6 | | | Other Information | |
| | | | | |||
| | | Maintaining sound governance and oversight of our environmental management efforts. • Minimizing our impact on the environment by reducing our carbon footprint, using water and energy efficiently, implementing comprehensive waste management programs and employee engagements. We target to achieve operational net zero emissions by 2035 (Scope 1 and Scope 2) and will be outlining our plan to achieve these goals in • Engaging our stakeholders — including team members and partner organizations — to promote and practice environmental responsibility. • Creating systemic change by co-chairing the National Academy of Medicine’s Climate Collaborative to meaningfully reduce the carbon footprint of the U.S. health system. | | | ||
| | | Helping to Create a Modern, High-Performing Health System | | | ||
| | | • Expanding access to care through a long-standing commitment to achieve universal coverage by harnessing digital tools and virtual platforms and investing in primary care. • Improving health care affordability through advancing value-based care, optimizing where patients receive care and lowering the cost of prescription drugs. • Enhancing the health care experience by improving patient and clinician satisfaction and providing personalized, dedicated member support and culturally competent care. • Achieving better health outcomes by managing chronic disease, applying a holistic approach to mental health care and improving health literacy. • Advancing health equity with personalized care tailored to an individual’s needs, helping to build a diverse health workforce, improving the health of underserved communities and leveraging data to reduce disparities in care. • Building healthier communities through our social responsibility efforts, including philanthropic grants, in-kind contributions and supporting our employees who volunteer their time and resources in the communities where they work and live. | | | ||
| | | Our People and Culture | | | ||
| | | • Fostering an inclusive, equitable and diverse environment where all team members are appreciated, valued and able to reach their full potential. • Sustaining high performance and resilience by supporting employee well-being and rewarding and recognizing outstanding performance. • Developing and growing our talent with robust virtual onboarding and digital self-assessment tools. | | | ||
| | 2022 Proxy Statement | Alignment of Environment, Social and Governance (ESG) with Our Long-Term Strategy | | | 27 | |
| | 1 | | | Board of Directors | | | | ||||||||||||
| | | Corporate Governance | | | | ||||||||||||||
| | | Executive Compensation | | | | ||||||||||||||
4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | | |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | |||||||||||||||||||||||||||||
| | | • Maintaining strong and effective corporate governance to drive sustained shareholder value and respond to the interests of our shareholders. • Adhering to our values through ethics and compliance that guide our behavior and help us remain a trusted partner. • Maintaining data privacy and cyber security, recognizing our obligation to build and maintain the trust and confidence of our stakeholders and customers, ensuring we can protect the information for all those we serve. • Partnering with suppliers to maximize value in our supply chain to ensure we buy the right goods and services, from the right suppliers, for the right price, in a timely manner. • Committing to supplier diversity by developing a supplier base that reflects the communities and customers we are privileged to serve. | | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our 2020 Sustainability Report, available at Communication withhttps://sustainability.uhg.com/content/dam/UHG/PDF/sustainability/final/2020_SustainabilityReport.pdf, summarizes the Board of Directors
The Board of Directors valuessteps the inputCompany is taking to build a health system that works better for everyone through the organization’s environmental, social and insights ofgovernance efforts. We also attached our shareholders and other interested parties and believes effective communication strengthens the Board of Directors' roleEEO-1 report as an active, informed and engaged fiduciary. The Board of Directors has adopted a Board of Directors Communication Policy to facilitate communication between shareholders and other interested parties and the Board. Under this policy, the Board of Directors has designated the Company's Secretaryexhibit to the Board of Directors as its agentSustainability Report. We have committed to receive and review communications.
The Secretarymap our disclosures to the Sustainability Accounting Standards Board (“SASB”) in our 2021 Sustainability Report.
Sustainability Governance
In close partnership with business leaders from across our enterprise, the Chief Sustainability Officer is responsible for developing and implementing a comprehensive ESG strategy, establishing annual and long-term sustainability goals, performance metrics, a governance structure to achieve them, and helping to shape our environmental, social and governance agendas.
The Governance Committee is responsible for providing oversight over ESG policies and practices, including identifying key ESG topics, ensuring appropriate Board or Board committee oversight of Directors will not forwardthese topics, overseeing the Company’s environmental and climate change initiatives, corporate citizenship activities and reviewing the Company’s ESG sustainability reports. The Audit and Finance Committee oversees management’s processes to identify ESG investment criteria and provide assurance of ESG disclosures. The Compensation and Human Resources Committee reviews the directors communications received which are of a personal nature or notCompany’s strategies, programs and outcomes related to each of human capital management as well as diversity, equity and inclusion. The Health and Clinical Practice Policies Committee oversees management’s efforts and initiatives to expand access to health care, improve health care affordability, clinical care and safety, enhance the dutieshealth care experience, achieve better health outcomes, advance health equity, and responsibilities of the Board of Directors, including, without limitation, junk mail, mass mailings, business solicitations, routine customer service complaints, new product or service suggestions and opinion surveys. The Secretary to the Board of Directors will forward such complaints and suggestions received to the appropriate members of the Company's management.
Appropriate matters to raise in communications to the Board include:
•Board composition;•Board succession planning process;•CEO succession planning process;•Executive compensation;•Use of capital;•Corporate governance; and•General Board oversight, including accounting, internal controls, auditing and other related matters.
The policy, including information on how to contact the Board of Directors, may be found in the corporate governance section of our website,www.unitedhealthgroup.com/about/corporate-governance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
reduce health disparities.
| | | 28 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
Executive Compensation
Overview
UnitedHealth Group'sGroup’s compensation program is designed to attract and retain highly qualified executives and to maintain a strong link between pay and the achievement of enterprise-wide goals. We emphasize and reward teamwork and collaboration among executive officers, which we believe fosters Company growth and performance, optimizes the use of enterprise-wide capabilities, drives efficiencies and integrates products and services for the benefit of our customers and other stakeholders.
In determining 20182021 executive compensation, the Compensation and Human Resources Committee considered the Company'sCompany’s strong growth, operating performance and financial results, all of which were achieved in an uncertain environment, as well as individual executive performance. Some of our key business results for 20182021 were:
Financial
•
Total shareholder return in 2021 was 45%, and 107% from 2019-2021, reflecting continued strong fundamental performance;
•
Revenues increased 12% to $226.2 billion from $201.2$287.6 billion in 2017;2021 from $257.1 billion in 2020;
•
•
•
•
•
•
Return on equity was consistent withat 25.2% in 2021 compared to 24.9% in 2020, reflecting the prior year at 24.4% in 2018;
•Cumulative shareholder return for UnitedHealth Group, which is defined as the increase in stock price, together with dividends reinvested when paid was 122% over the 2016-2018 time periodCompany’s strong operating performance and 258% over the 2014-2018 time period. Cumulative shareholder return for the S&P 500 Index was 30% over the 2016-2018 time periodefficient capital structure; and 50% over the 2014-2018 time period;
•
•
Awards and Recognition
•
•UnitedHealth
United Health Group was the top ranked company in the insurance and managed care sector onFortune's 2019 "World's Fortune’s 2022 “World’s Most Admired Companies" list, based on 2018 results.Companies” list. This is the ninthtwelfth consecutive year UnitedHealth Group has ranked No. 1 overall in its sector. The Company ranked No. 1 on all nine key attributes of reputation — innovation, people management, use of corporate assets, social responsibility, quality of management, financial soundness, long-term investment value, quality of products and services and global competitiveness. The Company was rated No. 1 in innovation for the tenth consecutive year.competitiveness;
•
•
UnitedHealth Group washas been named to both the Dow Jones Sustainability World and North America Indices every year since 1999;
•
UnitedHealth Group received a score of 100 on the Human Rights Campaign Foundation’s Corporate Equality Index 2022, earning the distinction of one of the “Best Places to Work for LGBTQ Equality”;
•
In 2021, and for the 20thtenth consecutive year; and
•year, The Civic 50, a Points of Light initiative that highlights companies that improve the quality of life in the communities where they do business, ranked UnitedHealth Group one of America’s 50 most community-minded companies. In addition, UnitedHealth Group was included amongnamed the 2018leader in the Healthcare Sector category for the fourth time overall;
•
UnitedHealth Group was named to Forbes’ list of 2021 World’s Best EmployersEmployers;
•
Prospanica, an organization that has worked to empower Hispanic professionals for Diversity by Forbes.
- over 30 years, recognized UnitedHealth Group with the 2021 Brillante Award for Corporate Excellence;
Adjusted earnings per share is a non-GAAP financial measure. Refer to Appendix A in this proxy statement for a reconciliation of adjusted earnings per share to the most directly comparable GAAP measure.
| 2022 Proxy Statement | Executive Compensation Summary | | |
| |
| |
| | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
Directors | | | |
| | | Corporate Governance | | | |
| | | Executive Compensation | | | |
| | |
| | | |
| | | Annual Meeting | | | |
| | | Other Information | |
•
The CDP (formerly Carbon Disclosure Project) named UnitedHealth Group to its Leadership Band in 2020 for efforts to reduce greenhouse gas emissions;
•
The Disability Equality Index® named UnitedHealth Group one of the best places to work for disability inclusion in 2021;
•
UnitedHealth Group has been ranked No. 4 in the nation on the 2022 Military Friendly® Employers list; and
•
UnitedHealth Group is recognized as a “Trendsetter” in the 2021 Center for Political Accountability-Zicklin Index of Political Accountability.
The Compensation and Human Resources Committee believes total compensation for the executive officers listed in the 20182021 Summary Compensation Table (the "named“named executive officers"officers” or "NEOs"“NEOs”) should be heavily weighted toward long-term performance-based compensation. In 2018,2021, long-term compensation represented approximately 75% of the total compensation granted to our named executive officers.NEOs. The elements of compensation for our named executive officersNEOs were unchanged from 2017.
2020. We endeavor to maintain strong governance standards in the oversight of our executive compensation programs, including the following policies and practices that were in effect during 2018:
- 2021:
Strong Oversight and Pay Practices
•
Compensation and Human Resources Committee consisting entirely of independent Board members.
•
•
Performance-based compensation arrangements, including performance-based equity awards that use a balanced set of performance measures (including human capital measures), with different metrics used for annual and long-term incentive plans.
•
•
Double-trigger accelerated vesting of equity awards, requiring both a change in control and a qualifying employment termination, which is our only change in control consideration.
•
•
•
•
A compensation clawback policy that entitles the Board of Directors to seek cash or equity reimbursement from our senior executives if they are directly involved in fraud or misconduct that causescausing a material restatement, or in the event ofmaterial detrimental conduct and a senior executive'sexecutive’s violation of non-compete, non-solicit or confidentiality provisions.
•
•
A stock retention policy that generally requires executive officers to hold, for at least one year, one-third of the net shares acquired upon vesting or exercise of any equity award.
•
•
Each of our executive officers and directors werewas in compliance with our stock ownership guidelines as of April 9, 2019. Mr. Wichmann, our CEO, is required to own shares equal to eight times his base salary by the fifth anniversary of his appointment as CEO. As of April 9, 2019, Mr. Wichmann owned shares equal to 169 times his base salary.8, 2022.
•
•Prohibition on repricing of stock options and stock appreciation rights without shareholder approval.
•Prohibition on hedging transactions and advance approval of the Compensation Committee required for pledging transactions.
•
Annual advisory shareholder vote to approve the Company'sCompany’s executive compensation.
•
•
The direct retention by the Compensation and Human Resources Committee of its independent compensation consultant, Pay Governance LLC, whichwho performs no other consulting or other services for the Company.
What We Don’t Do
•
No excise tax gross-ups. Generally no executive-only perquisites.
•
No repricing of stock options and stock appreciation rights or cash buyouts without shareholder approval.
•
No discounted stock options or stock appreciation right awards.
•
No reload of stock options.
•
No hedging and pledging transactions by directors and executive officers.
Former CEO David S. Wichmann
As discussed in detail below and reflectedpreviously disclosed in the 2018Company’s 2021 proxy statement, the terms of Mr. Wichmann’s employment agreement provide for payments approximating his most recent base salary and non-equity incentive compensation award for a two-year period.
Pursuant to applicable SEC rules, the entire amount payable to Mr. Wichmann over the two-year period is included in this year’s Summary Compensation Table, our CEO,Table. The amount set forth for Mr. Wichmann receivedin this proxy statement is consistent with the disclosures made in the Company’s 2021 proxy statement. Mr. Wichmann has not been provided with any additional compensation since his departure from the Company in February 2021.
| | 2022 Proxy Statement | Executive Compensation Summary | | | 30 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
Performance Graph
The following compensation for 2018:
•Base salaryperformance graph compares the cumulative one-year, three-year and five-year return to shareholders on our common stock relative to the cumulative total returns of$1.3 million;•Annual cash incentive award of $4.5 million, which represents 173% of his target opportunity;•Long-term cash incentive award of $890,600the S&P Health Care Index, the Dow Jones US Industrial Average Index and the S&P 500 index for the2016-2018period ended December 31, 2021. The comparisons assume the investment of $100 on December 31, 2016 in our common stock and in each index, and dividends were reinvested when paid.
![[MISSING IMAGE: tm223410d1-lc_comparbwlr.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm223410d1-lc_comparbwlr.jpg)
| | | | | 12/2016 ($) | | | 12/2017 ($) | | | 12/2018 ($) | | | 12/2019 ($) | | | 12/2020 ($) | | | 12/2021 ($) | | ||||||||||||||||||
| | UnitedHealth Group | | | | | 100.00 | | | | | | 139.82 | | | | | | 160.13 | | | | | | 192.13 | | | | | | 232.87 | | | | | | 338.16 | | |
| | S&P Health Care Index | | | | | 100.00 | | | | | | 122.08 | | | | | | 129.97 | | | | | | 157.04 | | | | | | 178.15 | | | | | | 224.70 | | |
| | Dow Jones US Industrial Average | | | | | 100.00 | | | | | | 128.11 | | | | | | 123.65 | | | | | | 154.99 | | | | | | 170.06 | | | | | | 205.68 | | |
| | S&P 500 Index | | | | | 100.00 | | | | | | 121.83 | | | | | | 116.49 | | | | | | 153.17 | | | | | | 181.35 | | | | | | 233.41 | | |
The stock price performance included in this graphic is not necessarily indicative of future stock price performance.
UnitedHealth Group’s market capitalization has grown 42%, 98% and 210% over the one year, three year and five year periods, respectively, for the period which represents above target performance by the Company against pre-set 2016-2018 long-term incentive plan performance goals (this cash plan has been discontinued);ended December 31, 2021.
•A performance-based restricted stock unit opportunity ("performance shares") with a target grant date fair value of $5.55 million, restricted stock units ("RSUs") with a grant date fair value of $2.775 million, and non-qualified stock options with a grant date fair value of $2.775 million; and
•Company matching contributions of $178,875 made under the Company's 401(k) plan and Executive Savings Plan.
|
| | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
Directors | | | |
| | | Corporate Governance | | | |
| | | Executive Compensation | | | |
| | |
| | | |
| | | Annual Meeting | | | |
| | | Other Information | |
The following table sets forth the Company’s compensation program and philosophy, core principles that reinforce our philosophy and process for determining compensation.
| | Program Philosophy and Objectives | | | | Compensation Program Principles | | | | Determination of Compensation | |
| | • Align the economic interests of our executive officers with those of our shareholders. • Reward performance that advances our mission of helping people live healthier lives and helping make the health system work better for everyone. • Reward performance that emphasizes teamwork and close collaboration among executive officers while also recognizing individual performance. • Reward performance that supports the Company’s values. • Foster an entrepreneurial spirit with innovative thinking and action that leverages the ingenuity of our employees. • Attract and retain highly qualified executives. | | | | • Pay-for-performance. A large majority of our executive officers’ total compensation is at risk and only earned based on achievement of enterprise-wide goals. • Enhance the long-term value of the business. Our pay system is weighted toward long-term compensation to promote long-term shareholder value creation and avoid excessive risk-taking. • Reward long-term growth and focus management on sustained success and shareholder value creation. Compensation of our executive officers is heavily weighted toward equity, and we require significant stock ownership and share retention by our management team. This encourages sustained performance and positive shareholder returns. • Provide standard benefits. We provide standard employee benefits and generally do not have “executive-only” benefits or perquisites. | | | | • The Compensation and Human Resources Committee oversees the Company’s risks, policies, and philosophy related to total compensation for executive officers. • The Compensation and Human Resources Committee reviews and approves the compensation for the named executive officers based on its own evaluation, input from the Chair of the Board, our CEO (for all executive officers except himself), internal pay equity considerations, the tenure, role, and performance of each named executive officer, input from its independent consultant and market data. | |
| | 2022 Proxy Statement | Compensation Discussion and Analysis | | | 32 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
Our Compensation Program Philosophy and Objectives2021 Say On Pay Vote; Shareholder Engagement
We seek
Addressing the 2021 Say on Pay Vote
Our annual say on pay vote is one of our opportunities to attract and retain highly qualified executives and establish a strong pay-for-performance alignment by linking senior management compensation to enterprise and individual performance goals. The primary objectives ofreceive feedback from shareholders regarding our executive compensation program are to:
•Alignprogram. The say on pay proposal at theeconomic interests2021 Annual Meeting received 72% as compared to an average of over 95% support from 2011 through 2020. We sought feedback from shareholders to better understand what motivated their votes and what actions we could take to address their concerns.
Shareholder Engagement and Our Response
We contacted shareholders representing approximately 53.5% of our outstanding shares and met with holders of 40.2% of our outstanding shares.
| | | Shareholder Engagement Efforts — Key Statistics | | | ||||
| | | Scope of Engagement: | | | | • Contacted: 46 shareholders representing 53.5% of our outstanding shares • Met with: 27 shareholders representing 40.2% of our outstanding shares | | |
| | | Engagement Team: | | | | • Chair of the Compensation and Human Resources Committee met with 15.1% of outstanding shares • Chief People Officer • Corporate Secretary | | |
The following is a summary of feedback raised by a majority of shareholders when voting on our 2021 say on pay resolution and how the Board/Compensation and Human Resources Committee has responded to those topics.
| | | Topic Raised | | | | Company Comments / Board Response | | |
| | | Overall design and philosophy of the executive compensation program | | | | In our meetings with shareholders, we were pleased to hear strong shareholder support of the overall design of our executive compensation program as well as the Company’s overall pay-for-performance alignment Shareholders overwhelmingly did not indicate a desire for broad changes to our program design | | |
| | | Payment of severance in connection with former CEO’s retirement disclosed in the 2021 proxy statement and reflected in the Summary Compensation Table on page 48 of this proxy statement. | | | | The Compensation and Human Resources Committee confirmed that going forward it has no intention of paying severance in connection with the retirement of an executive officer | | |
| | | Clawback policy only applies if a financial restatement occurs | | | | The Compensation and Human Resources Committee broadened the clawback policy to include material detrimental conduct as a trigger | | |
| | | Improve disclosure of annual incentive plan metrics | | | | The CD&A includes enhanced disclosure on the non-financial metrics included in the annual incentive plan | | |
| | | Target executive compensation should be set at the median for peer group companies | | | | The CD&A includes enhanced disclosure of the rationale for executive compensation targets | | |
| | 2022 Proxy Statement | Compensation Discussion and Analysis | | | 33 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
Additional issues raised in the course of engagement with shareholders included Board tenure, actions focused on carbon emissions and ESG disclosure. As we have disclosed in this proxy statement, the average tenure of our director nominees is 6.6 years and we will map our disclosures to the SASB reporting framework in our 2021 Sustainability Report. We have also previously announced our commitment to achieving operational net zero carbon emissions by 2035.
The Board and the Compensation and Human Resources Committee considered our shareholders’ feedback carefully and continue to strongly believe that our compensation program’s strong design contributes meaningfully to the Company’s success and is strongly aligned with shareholder interests. It remains critical that the Company continues to have an executive officerscompensation program that appropriately attracts, retains and incentivizes management while aligning pay with thoseperformance, driving long-term value creation and reflecting the views of shareholders. We will continue to consider shareholder feedback on an ongoing basis with respect to potential changes to the program while preserving the program’s general design and value to UnitedHealth Group and all of our shareholders.
Compensation Program Principles
Our Compensation Committee uses the following principles to implement our compensation philosophy and achieve our executive compensation program objectives:
•Pay-for-performance.Most of the total compensation of our executive officers is at risk and only earned based on achievement of enterprise-wide goals.•Enhance the long-term value of the business.Our pay system is weighted toward long-term compensation to promote long-term shareholder value creation and avoid excessive risk-taking.•Reward long-term growth and focus management on sustained success and shareholder value creation.Compensation of our executive officers is heavily weighted toward equity and we require significant stock ownership by our management team. This encourages sustained performance and positive shareholder returns.•Provide standard benefits.We provide standard employee benefits and generally do not have "executive-only" benefits or perquisites.
Determination of Total Compensation
Role of the Compensation and Human Resources Committee
The Compensation and Human Resources Committee oversees the Company'sCompany’s risks, policies and philosophy related to total compensation for executive officers. Management recommends appropriate enterprise-wide financial and non-financial performance goals for use in incentive compensation. The Compensation and Human Resources Committee reviews and approves the compensation for the named executive officers based on its own evaluation, input from the Chair of the Board, our Executive Chairman and CEO (for all executive officers except themselves)himself), internal pay equity considerations, the tenure, role and performance of each named executive officer, input from its independent consultant and market data.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In addition, in making compensation decisions, the Compensation Committee considers the results of the Company's annual shareholder advisory votes approving the Company's executive compensation. More than 95% of the votes cast have been in favor of the Company's executive compensation at each of our annual meetings, beginning with our inaugural vote in 2011. The Compensation Committee believes these shareholder votes reflect strong support for the Company's executive compensation program.
The Compensation Committee'sand Human Resources Committee’s Use of an Independent Compensation Consultant
The Compensation and Human Resources Committee retains an independent compensation consultant, Jon Weinstein of Pay Governance LLC, to advise the Compensation and Human Resources Committee on executive and director compensation matters, assess total compensation program levels and program elements for executive officers and evaluate competitive compensation trends. Pay Governance does not provide any other services to the Company and does not perform any work for management. The Compensation and Human Resources Committee has assessed the independence of Mr. Weinstein and of Pay Governance, specifically considering, in accordance with SEC rules, whether Mr. Weinstein and Pay Governance had any relationships with the Company, our officers or our Board members that would impair their independence. Based on this evaluation, the Compensation and Human Resources Committee concluded that Mr. Weinstein'sWeinstein and Pay Governance'sGovernance are independent and their work for the Compensation and Human Resources Committee does not raise any conflict of interest.
Competitive Positioning
The Compensation and Human Resources Committee believes total compensation for the named executive officers should be heavily weighted toward long-term performance-based compensation, but it does not target a specific mix of annual and long-term compensation or cash and equity compensation and does not formulaically set compensation targets.
In general, the Compensation Committee'sand Human Resources Committee’s goal is to achieve total compensation for the named executive officers as a group that falls within a range of the 50th50th to 75th75th percentiles of the market data for our peer group (as discussed below), if paid at target. The Compensation and Human Resources Committee believes this range is an appropriate reflection of the Company'sCompany’s relative size in comparison to our peer group and the broader market, complexity and consistently strong performance over the past several years.years, with the Company positioned above the 75th percentile of our peer group on key measures such as revenue, market capitalization, and employees, as shown below. The following briefly summarizes the processes followed by the Compensation and Human Resources Committee to select competitive compensation benchmark data and how the Compensation and Human Resources Committee uses these data.
| | 2022 Proxy Statement | Compensation Discussion and Analysis | | | 34 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
Peer Group
| | Peer Group | | ||||||
| | Alphabet Inc. | | | Centene Corporation | | | Johnson & Johnson | |
| | Amazon.com, Inc. | | | Cigna Corporation | | | JPMorgan Chase & Co. | |
| | AmerisourceBergen Corporation | | | Citigroup Inc. | | | McKesson Corporation | |
| | Anthem, Inc. | | | CVS Health Corporation | | | Microsoft Corporation | |
| | Apple Inc. | | | Humana Inc. | | | Walgreens Boots Alliance, Inc. | |
| | Bank of America Corporation | | | International Business Machines | | | Wells Fargo & Company | |
| | Cardinal Health, Inc. | | | | ||||
This screening process resulted in the 19 companies set forth above. We are significantly larger than most of our peers as reflected below (data as of December 31, 2021):
| | | | | | | Minimum | | | | 50th Percentile | | | | UnitedHealth Group | | | | Maximum | | |
| | | Annual Revenue | | | | $57B | | | | $139B | | | | $288B (88th percentile) | | | | $470B | | |
| | | Market Cap | | | | $14B | | | | $120B | | | | | | | $2,913B | | | |
| | | Employees | | | | 40,000 | | | | 156,500 | | | | 350,000 (94th percentile) | | | | 1,608,000 | | |
At the request of the Compensation and Human Resources Committee, Pay Governance conducts an annual review of the Company'sCompany’s compensation peer group. This review ensures that the peer group companies remain appropriate from a business and talent perspective andperspective. This occurs at the second quarter Compensation and Human Resources Committee meeting, because recent financial and compensation data are generally available at thatthis time.
The Compensation and Human Resources Committee uses the following screening methodology, which formulates a peer group focused on the characteristics and industries reflected in the prior career experiences of approximately 250 of the Company's senior leaders:
•All U.S. publicly traded companies in the following industries as the starting point:
|
| ||
|
| ||
|
|
•Limit the listmost relevant to the Company:
•
The 40 largest U.S. companies by revenue and equity market capitalizationcapitalization.
•
Apply an industry screen to avoidlimit peer companies of significantly smaller scope; and
•Add major companies located near UnitedHealth Group's headquarters and primary operating locations to reflect relevant geographic markets for talent.
| | – Managed Care | | | – Pharma/Life Sciences | | | – Technology | |
| | – Health Care and Services | | | – Financial Services | | | | |
•
Include the Company’s 4 largest managed care competitors, even if they do not all meet the screening criteria.
| 2022 Proxy Statement | Compensation Discussion and Analysis | | |
| |
| |
| | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
Directors | | | |
| | | Corporate Governance | | | |
| | | Executive Compensation | | | |
| | |
| | | |
| | | Annual Meeting | | | |
| | | Other Information | |
This screening process resulted in the 54 companies set forth under "Peer Group and Managed Care Companies" below. As compared to the peer group, the Company is:
•At the 97th percentile on a revenue basis;•At the 78th percentile on a market capitalization basis;•At the 77th percentile in earnings from operations; and•At the 84th percentile in number of employees.
The Compensation Committee also considers market data from the four largest publicly traded managed care companies with which we compete for business. However, the Compensation Committee does not use this group as a primary reference point for benchmarking compensation practices because the Company is substantially larger, more complex and more diverse than these companies, and because we believe that the Company competes primarily for talent and capital with other successful large companies across a broader group of sectors.
Once the process is concluded and peer group companies are selected, the Compensation and Human Resources Committee generally uses the market data as follows:
•
At the fourth quarter Compensation and Human Resources Committee meeting, Pay Governance presents an annual review of the market competitiveness of the Company'sCompany’s executive compensation programlevels for the Company'sCompany’s executive officers. The review compares the compensation opportunities provided to the Company'sCompany’s executive officers to peer group companies on a position-by-position basis and on an aggregate basis.
•
•
At the first quarter Compensation and Human Resources Committee meeting, the Compensation and Human Resources Committee determines pay opportunities for each officer using the market competitiveness assessment from the previous fourth quarter as a reference point. In addition, the Compensation and Human Resources Committee takes into consideration the Company'sindividual officer’s tenure in such position, Company’s performance against previously established performance goals, each officer'sofficer’s individual performance, internal equity, the Executive Chairman and CEO'sCEO’s recommendations and other relevant business performance that may not be adequately captured by the Company and individual officer goals.
Target total compensation of our named executive officers as a group in 2018,2021, consisting of base salary, target annual cash incentive award, target long-term cash incentive award, and the grant date fair value of equity awards (including performance shares at target) was between the 50th and the 75th percentiles of the market data for our peer group.
Our CEO’s total compensation is below the median of our peer group.
The companies included inCompensation and Human Resources Committee believes this positioning is appropriate because the 2018Company is above the median of peer group companies on all scope metrics and the four managed care companies are listed atCompany’s exceptional long-term performance further supports the endeffectiveness of this Compensation Discussion and Analysis.
Role of Management and CEO in Determining Executive Compensationpositioning.
The Compensation Committee has the responsibility to approve and monitor all compensation for our executive officers. Management recommends appropriate enterprise-wide financial and non-financial performance goals for use in incentive compensation. Our Executive Chairman and CEO assist the Compensation Committee by evaluating the performance of the executive officers who report directly to them and recommending compensation levels for these executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Use of Tally Sheets and Wealth Accumulation Analysis
When approving compensation decisions, the Compensation and Human Resources Committee reviews tally sheet information for each of our executive officers. These tally sheets are prepared by management and quantify the elements of each executive officer'sofficer’s total compensation. The tally sheets include a summary of all equity awards previously granted to each executive officer, the gain realized from past vesting or exercise of equity awards, and the projected value of accumulated equity awards based upon then current stock price scenarios. This is done toThe tally sheets help the Compensation and Human Resources Committee members analyze the compensation each executive officer has accumulated to date and to fully understand the amount the executive officer could potentially accumulate in the future.
Elements of our Compensation Program
The compensation program for our named executive officers consists of the following elements:
| | | | ||||
| ||||||
| | Base salary Annual compensation, not variable | | ||||
| | To provide a base level of cash compensation for executive officers | ||||
| | ||||||
| Annual cash incentive awards Annual performance compensation, variable | | | To encourage and reward executive officers for achieving annual corporate performance, human capital and customer-oriented goals and individual performance | |
| | 2022 Proxy Statement | Compensation Discussion and Analysis | | | 36 | |
| 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
| | Compensation Element | | | Purpose | | |
| | Equity awards Long-term performance compensation, variable | | | To motivate and retain executive officers and align their long-term interests with shareholders through the use of: | ||
• Performance shares to encourage sustained performance and growth and potentially assist executives in building ownership in the Company | | |||||
• RSUs to retain executive officers and build stock ownership positions | | |||||
• Non-qualified stock options to encourage sustained stock price appreciation | | |||||
| | Employee benefits Annual indirect compensation, not variable | | ||||
| | To promote the health, well-being and financial security of employees, including executive officers; constitutes the smallest part of total | | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As reflected in the charts below, the mix of total target compensation granted in 20182021 to our named executive officers, excluding Mr. Wichmann, was heavily weighted towards performance-based and long-term incentive compensation, with long-term incentive awards making up approximately 75% of total target compensation for our named executive officers in aggregate.
![[MISSING IMAGE: tm223410d1-pc_compenpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm223410d1-pc_compenpn.jpg)
 |  | |||
Appointment of Sir Andrew Witty as Chief Executive Officer of Optum
On March 13, 2018, the Company announced that, effective July 1, 2018, Sir Andrew Witty would replace Larry Renfro as Chief Executive Officer of Optum. Sir Andrew is the former Chief Executive Officer of GlaxoSmithKline plc. (GSK), a Fortune Global 500 company and one of the largest pharmaceutical companies in the world. In light of this appointment, Sir Andrew stepped down from the UnitedHealth Group Board of Directors on March 13, 2018.
Sir Andrew was selected to be Optum's CEO because of his experience leading a complex, multinational business organization, global perspective and outstanding accomplishments in health care worldwide, where he has distinguished himself as an internationally recognized business leader and drove some of the largest and most impactful decisions and innovations in health care around the globe. During his nine-year tenure as GSK's CEO (from 2008 to 2017), Sir Andrew led the delivery of substantial portfolio change and growth across GSK's three business units while remaining disciplined on costs and advancing the progression of the company's pipeline of innovative products. Sir Andrew led a number of ground breaking corporate transactions. Alongside acquisitions, the creation of important joint ventures in the fields of HIV, Vaccines and Consumer Health allowed GSK to strengthen leading positions in important fields. He also led GSK in the adoption of an equitable pricing strategy to make much needed medicines and vaccines more affordable to people in the world's poorest countries. Sir Andrew's deep experience with the use of data and analytics and new technologies to improve outcomes, better serve consumers, lower costs and drive value across the health care system further qualified him as a unique candidate for the Optum CEO role.
Base Salary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sir Andrew's compensation is generally targeted at the 60th percentile of peer group companies. As part of his employment, he received an employment agreement with terms similar to those provided to our other named executive officers. In addition, Sir Andrew received a new hire equity award consisting of restricted stock units with five-year ratable vesting and a grant date fair value of $10 million. The vesting terms of this new hire award are one year longer than the Company's typical vesting provisions. In designing Sir Andrew's compensation package, the Compensation Committee considered Sir Andrew's compensation while serving as GSK's CEO, current market data and equity-based alternatives to attract and retain Sir Andrew over the long-term. The Compensation Committee also agreed to provide Sir Andrew with tax equalization payments to ensure that, as a U.S. non-resident, his overall tax obligation is the same as if he were taxed exclusively in the United Kingdom where he resides, including assistance in tax return preparation due to the complexity of multi-jurisdictional filing requirements. The Compensation Committee believes Sir Andrew's employment terms and compensation are appropriate due to his experience as the CEO of one of the world's largest companies and in light of his unique skill set as discussed above, and were necessary to encourage Sir Andrew to join the Company. The elements of Sir Andrew's compensation and the terms of his employment agreement are discussed in more detail below in the applicable sections of this CD&A.
Annual Compensation
The CompensationHuman Resources Committee generally determines base salary levels for our named executive officers early in the fiscal year. OnThe Compensation and Human Resources Committee increased Mr. Witty’s salary to $1,500,000 effective February 18, 2018,3, 2021 upon his promotion to Chief Executive Officer. Messrs. McMahon’s and Rex’s salaries were increased by the Compensation Committee approved aneffective February 28, 2021 to reflect Mr. McMahon’s promotion to President and Mr. Rex’s expanded duties. Effective February 28, 2021, Mr. Thompson’s salary was increased to $1,000,000 effective April 7, 2021 upon his promotion to Chief Executive Officer, UnitedHealthcare. Ms. Short’s salary increase was effective April 7, 2021 when she resumed her role as Chief Legal Officer. These changes are reflected in the base salary for Messrs. Rex and Nelson to $1,000,000. This increase reflected strong performance and aligned these executives' salaries to market data.
| | 2022 Proxy Statement | Compensation Discussion and Analysis | | | 37 | |
Name | 2018 Base Salary ($) | 2017 Base Salary ($) | Increase From 2018 to 2017 (%) | |||||||||||||
Stephen J. Hemsley | | | 1,000,000 | | | | 1,000,000 | | | | 0% | | | |||
| | | | | | | | | |||||||||
David S. Wichmann | | | 1,300,000 | | | | 1,300,000 | | | | 0% | | | |||
| | | | | | | | | |||||||||
John F. Rex | | | 1,000,000 | | | | 850,000 | | | | 18% | | | |||
| | | | | | | | | |||||||||
Andrew P. Witty | | | 1,100,000 | | | | N/A | | | | N/A | | | |||
| | | | | | | | | |||||||||
Steven H. Nelson | | | 1,000,000 | | | | 900,000 | | | | 11% | | | |||
| | | | | | | | | |||||||||
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
| | Name | | | 2020 Base Salary | | | 2021 Base Salary | | ||||||
| | Andrew Witty | | | | | 1,100,000 | | | | | | 1,500,000 | | |
| | John F. Rex | | | | | 1,000,000 | | | | | | 1,200,000 | | |
| | Dirk C. McMahon | | | | | 1,000,000 | | | | | | 1,200,000 | | |
| | Brian R. Thompson | | | | | 800,000 | | | | | | 1,000,000 | | |
| | Marianne D. Short | | | | | 850,000 | | | | | | 900,000 | | |
2021 Annual Incentive Plan Performance Goals
Annual cash incentive awards may be paid if our Company meets or exceeds annual performance goals established for the year as determined by the Compensation and Human Resources Committee. In establishing the performance measures for the 20182021 annual cash incentive awards, the Compensation and Human Resources Committee sought to align broadly the compensation of our executive officers with key elements of the Company's 2018Company’s 2021 business plan. Development of the Company's 2018Company’s 2021 business plan was a robust process that involved input from all of the Company'sCompany’s business units and was reviewed with the Company'sCompany’s Board of Directors in the fourth quarter of 2017 and the first quarter of 2018.on multiple occasions. These performance goals are based on enterprise-wide metrics because the Compensation and Human Resources Committee believes that the named executive officers share responsibility to support the goals and performance of the Company as key members of the Company'sCompany’s leadership team.
TableWe assess our progress toward enhancing customer experiences using the Net Promoter System (NPS), which holistically measures the experiences we deliver to the Company’s customers, including how likely a person is to recommend our Company to their friends or family. Similarly, listening to our team members is one of Contentsthe key ways we help build and reinforce a culture of inclusion and encourage employee engagement. We recognize that improved employee sentiment leads to increased talent and improved productivity, and for well over a decade, we have measured employee sentiment annually. We use our human capital management metric — the Employee Experience Index (EXI) — to measure an employee’s sense of commitment and belonging to the Company, establishing a direct link between our executive compensation program and our commitment to human capital management. We believe both metrics — NPS as well as EXI — demonstrate meaningful measures of executive performance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table sets forth the performance measures and goals established for 2018,2021, as well as actual 20182021 performance results:
| 2021 Performance Measure | |||||||||||||||||||
| | Weight | | Threshold Performance | | Target Performance | | Maximum Performance | | 2021 Performance | | |||||||||
| | Revenue* | | | | | 30% | | | | $266.0 billion | | | $280.0 billion | | | $294.0 billion | | | $284.0 billion | |
| Operating Income* | | | 30% | | | $19.9 billion | | | $ | | | $26.9 billion | | | $23.3 billion | | |||
| Cash Flows from Operations* | | | | | 15% | | | | $ | | | $ | | | $ | | | $ | |
| | Stewardship: • Net Promoter System (NPS) • Employee Experience Index (EXI) | | | | | 25% | | | | 1.2 points above 2020 results for NPS; 4.2 points below 2020 results for EXI | | | 2.5 points above 2020 results for NPS; at 2020 results for EXI | | | |||||
results for EXI | | 1.7 points below 2020 results for NPS (below threshold); 2.4 points below target for EXI | | |||||||||||||||||
| | 2022 Proxy Statement | Compensation Discussion and Analysis | | | 38 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | |||
| | | Other Information | |
- *The
Company'sCompany’s annual incentive plan allows for adjustments to theCompany'sCompany’s reported results for the impact of changes in accounting principles, extraordinary items and unusual or non-recurring gains or losses, including significant differences from the assumptions contained in the financial plan upon which the incentive targets were established. Adjustments to reported results are intended to better reflectexecutives'executives’ line ofsight/ability to affect payouts,sight, align award payments with growth of theCompany'sCompany’s business, avoid artificial inflation or deflation of awards due to unusual or non-recurring items in the applicable period and emphasize theCompany'sCompany’s preference for long-term and sustainable growth.NoThe Compensation and Human Resources Committee adjusted 2021 revenue, operating income and cash flows from operations to exclude impacts resulting from the COVID-19 pandemic, unrealized investment gains, and other non-recurring items. These adjustmentshave been maderemove benefits to management from items over which they had no control which were not contemplated in theCompany's reported2021 plan and had the net effect of decreasing the financial resultsfor 2018.and negatively affecting executive compensation.Context for the20182021 Annual Cash Incentive Plan Performance GoalsThe20182021 financial performance measures at target level represented, respectively, year-over-year growth in revenues of$26.6$22.9 billion, or13.2%9%; year-over-year growth in operating income of$2.1$1.0 billion, or13.6%4%; and year-over-yearincreasedecrease in operating cash flows of$1.9$1.7 billion or14.0%. These targets included expected financial8%, and all of these measures were impacted by the COVID-19 pandemic. 2021 targeted cash flows declined from 2020 actual resultsfromas 2020 cash flows were impacted by theacquisition of Empresas Banmedica in January 2018, the impact of the return of the Health Insurance Industry Tax, the impact of the Tax Cuts and Jobs Act enacted on December 22, 2017, and the view that there would be a continued challenging business environment in 2018.COVID-19 pandemic, primarily due to timing factors.
The20182021 non-financial performance measures were based on surveydataresults and, at target levels, represented levels at or above2017 performance in all categories.2020 performance. These measures were viewed to be important to longer-term financial success, customer satisfaction and employee welfare that might not be immediately reflected in annual financial results. The Compensation and Human Resources Committeewas of the viewbelieves that the breadth of financial and non-financial performance measures for the20182021 annual cash incentive award would motivate executive officers to achieve results that contribute to value creation for our shareholders on a long-term basis, reward performance advancing the Company’s mission and values, and avoid excessive risks.1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationAt the beginning of
2018,2021, the Compensation and Human Resources Committee believedthatachievement of the annual incentive goals required substantial performance on a broad range of initiatives contained in the20182021 business plan. These initiatives included the following:•Execute on Optum’s growth initiatives, with major focus areas including further expansion of patients served in value-based care arrangements and the continued build-out of care delivery capabilities, technology-enabled services, and advancing the scope of pharmacy care services offerings;•Growenrollmentpeople served inUnitedHealthcare medical benefit plans by approximately 2.2 million to 2.9 million people (excluding the planned TRICARE exit);UnitedHealthcare;••Continue to enhance the quality and operations of our government benefitbusinesses to compensate for continued expected funding pressures;businesses;••Continue to innovate in commercial benefit products, services, and distribution;••Deliver ever more effective and comprehensive clinical management, and continue expandingthe proportion of our spending withvalue-based elements in our network;••EnhanceFurther enhance customer service and increase theCompany's net promoter scoreCompany’s NPS across all business platforms;•Execute on Optum's growth and alignment initiatives, with major focus areas including care delivery, technology-enabled services and pharmacy care services;and••Further improve our consolidated operating cost ratio after considering the impact ofthe return of the Health Insurance Industry Tax andchanges in businessmix.mix, repeal of the health insurance tax, and effects from COVID-19.
With respect to these initiatives,theOptum achieved double digit percentage revenue and operating earnings growth, and added new patients in accountable, value-based arrangements. The Companymet enrollmentsignificantly exceeded its targetsacross all lines with the exception of Medicaid and Medicare Supplement businesses, adding a total of 2.4 million new members in health benefits (excluding the planned TRICARE exit),for people served by UnitedHealthcare, and improved net promoter scores in many, but not all, of its35businesses. UnitedHealthcare
| | 2022 Proxy Statement | Compensation Discussion and Analysis | | | 39 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
demonstrated excellence in its Medicare plans by sustaining the percentage of members in 4+further improving its Medicare Star rated Medicare plans in the 80% range. Optum exceeded its revenue growth target and achieved double digit percentage revenue growth at its OptumHealth and OptumInsight businesses and continued strong growth at OptumRx of over 9%. Optum also exceeded earnings growth projections, consumers served growth and adjusted scripts growth targets. In addition, our contracts with value-based elements totaled $74 billion in annual spending, including $18 billion through risk-transfer agreements.ratings. The consolidated operating cost ratio decreased to 14.1% excluding the impact of the Health Insurance Industry Tax and the Company achieved or made substantial progress on all other initiatives listed above.
Revenues for 20182021 grew 12.5%, slightly below target,12% from the prior year, while operating income was at target. Cashgrew 7% and cash flows from operations for 2018increased 1%. 2021 revenues, operating income and cash flows from operations were above target due to an improved working capital position.
each impacted by the COVID-19 pandemic.
Non-financial performance measures were at target levels for Employee Engagement, slightly below target for Net Promoter Score (NPS) and atabove threshold for Teamwork. NPS improved significantly year-over-yearEXI, and the Company's current employee engagement and teamwork scores were within the top quartile of companies as measured by the external vendor who calculates this measure.below threshold for NPS. Diluted earnings per share increased 14% and adjusted earnings per share increased 28%13%1 in 2018. The Company's total shareholder return in 2018 was 15%, and was 119% from 2016-2018, reflecting continued strong fundamental performance.
Table of Contents2021.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
While the Company uses defined performance measures and weightings to determine an overall funding level for the Company'sCompany’s bonus pool, individual annual cash incentive awards are not purely formulaic. In determining the amount of the actual annual incentive award to be paid to each officer, the Compensation and Human Resources Committee considers the CEO'sCEO’s recommendations for executive officers, the business performance underlying each of the performance measures, macroeconomic factors disproportionately impacting business performance, individual executive performance, market positioning, teamwork and related matters. The Compensation and Human Resources Committee retains discretion to pay an annual incentive award that is higher or lower than the performance level achieved based on these considerations if threshold performance is achieved on any performance measure. However, the overall pool cannot be exceeded.
Determination of 20182021 Annual Cash Incentive Award Opportunities
At the beginning of each year, the Compensation and Human Resources Committee approves an "annualannual cash incentive target opportunity"opportunity for each executive officer as a percentage of the executive officer'sofficer’s base salary. In February 2018, the Compensation Committee approved an increase in the annual cash incentive target opportunity for Messrs. Rex and Nelson to 150% and 200%, respectively. This increase reflected strong performance and aligned their incentive opportunities to market data for leaders in their positions.
The target opportunities established for the named executive officers are intended to increase collaboration, teamwork and accountability across the enterprise, to recognize the skills and versatility of each executive officer and to reflect relative contributions to the success of the overall enterprise. At the end of the fiscal year, the Compensation and Human Resources Committee reviews the Company'sCompany’s performance against the goals set at the beginning of the year and determines annual cash incentive awards. The Compensation and Human Resources Committee has the discretion to increase or decrease the awards made in view of actual performance, individual contributions and overall business and market conditions.
The Compensation and Human Resources Committee evaluated the Company's 2018Company’s 2021 performance against the performance goals, overall business results, economic conditions and individual performance objectives,objectives. The Committee noted the strong 2021 business results discussed above while also noting that performance was below threshold for NPS and exercised its discretion to adjustbelow target for EXI. Accordingly, the 2018Committee determined that the 2021 annual cash incentive awards such that they represented between 100% and 173%for officers should be awarded at 85% of the targets set for named executive officers except Mr. Hemsley who did not participate in any annual incentive opportunity. When Mr. Hemsley was appointed executive chair, the Compensation Committee determined to deliver all of Mr. Hemsley's incentive compensation in equity to foster a long-term strategic orientation, consistent with the specifications of his role. In exercising this discretion, the Compensation Committee considered the dollar amounts of the awards in addition to the percentage of target paid. set.
The target percentages for annual cash incentive awards to our named executive officers and the actual 20182021 annual cash incentive awards paid are set forth in the table below. Mr. Wichmann did not receive an annual cash incentive award in 2021. An explanation of how the individual amounts were determined follows the table.
2018 Annual Cash Incentive Awards | |||||||||||||||||||||
| | | | | | | | | | | ||||||||||||
Name | Target Percentage (% of Salary) | Target Award Value ($) | Actual Award Paid ($) | Paid Award (% of Target) | |||||||||||||||||
David S. Wichmann | | | 200 | % | | | 2,600,000 | | | | 4,500,000 | | | | 173 | % | | ||||
| | | | | | | | | | | ||||||||||||
John F. Rex | | | 150 | % | | | 1,500,000 | | | | 2,500,000 | | | | 167 | % | | ||||
| | | | | | | | | | | ||||||||||||
Andrew P. Witty | | | 200 | % | | | 2,200,000 | | | | 2,200,000 | | | | 100 | % | | ||||
| | | | | | | | | | | ||||||||||||
Steven H. Nelson | | | 200 | % | | | 2,000,000 | | | | 2,000,000 | | | | 100 | % | | ||||
| | | | | | | | | | | ||||||||||||
adjusted earnings per share to the most directly comparable GAAP measure.
| 2022 Proxy Statement | Compensation Discussion and Analysis | | |
| |
| |
| | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
Directors | | | |
| | | Corporate Governance | | | |
| | | Executive Compensation | | | |
| | |
| | | |
| | | Annual Meeting | | | |
| | | Other Information | |
| | 2021 Annual Cash Incentive Awards | | ||||||||||||||||||||||||
| | Name | | | Target Percentage (% of Salary) | | | Target Award Value ($) | | | Actual Award Paid ($) | | | Paid Award (% of Target) | | ||||||||||||
| | Andrew Witty | | | | | 200 | | | | | | 3,000,000 | | | | | | 2,550,000 | | | | | | 85% | | |
| | John F. Rex | | | | | 200 | | | | | | 2,400,000 | | | | | | 2,050,000 | | | | | | 85% | | |
| | Dirk C. McMahon | | | | | 200 | | | | | | 2,400,000 | | | | | | 2,050,000 | | | | | | 85% | | |
| | Brian R. Thompson | | | | | 200 | | | | | | 2,000,000 | | | | | | 1,700,000 | | | | | | 85% | | |
| | Marianne D. Short | | | | | 135 | | | | | | 1,215,000 | | | | | | 1,030,000 | | | | | | 85% | | |
In determining the 20182021 annual cash incentive award amounts for the named executive officers, the Compensation and Human Resources Committee took into account the Company'sCompany’s performance against the 20182021 annual performance goals set forth in the table above and business results described under "Context“Context for the 20182021 Annual Cash Incentive Plan Performance Goals,"” including each executive officer'sofficer’s role in achieving those results,results.
The Compensation and a qualitative assessment of individual performance and accomplishments. Individual factors considered are as follows:
•Mr. Wichmann's individual performance evaluation was conducted by Mr. Hemsley with input from the independent members of the Board of Directors. Mr. Wichmann's 2018 performance evaluation reflected exceptional performance in the following areas: strategic focus; vision and values; corporate performance, Board relations; leadership and organization effectiveness; corporate reputation and government relations; and overall performance.•Mr. Rex's individual performance considerations included exceptional performance as Chief Financial Officer and additional enterprise responsibilities as part of the Office of the Chief Executive; oversight of all finance, audit and financial compliance functions across the enterprise and responsibility for treasury, long-term capital allocation and financial planning, mergers and acquisitions and venture and private equity investment activity; and high regard by the Company's investors.•Mr. Witty's individual performance considerations included his strategic vision for Optum, commitment to the Company's mission and culture, the strong operational performance of Optum in 2018 as described above, including strong execution and engagement of Optum leaders and its employee base.•Mr. Nelson's individual performance considerations included progress in increasing the amount of medical spend covered under value-based arrangements, commitment to the Company's mission and culture, inconsistent operating performance of UnitedHealthcare, including the business results described above that met or exceeded some, but not all, of the targets set, and expansion into to new specialty business lines.
The CompensationHuman Resources Committee did not make specific assessments of, quantify or otherwise assign relative weightings to the factors listed above as it reached its decisions with respect to any of the named executive officers. See the 20182021 Summary Compensation Table and other related compensation tables below for details regarding 20182021 total compensation for the named executive officers.
Long-term incentive compensation, consisting solely of equity awards in 2018,2021, represents the largest portion of executive officer compensation. The combination of long-term incentives we employ provides a compelling performance-based compensation opportunity, aids in aligning and retaining the senior management team and accelerates the advancement of business unit capabilities across the enterprise.
The Compensation and Human Resources Committee determined that long-term equity-based compensation for 20182021 should include grants of performance shares, RSUs, and non-qualified stock options to achieve balance and effectiveness in our equity-based compensation and to align the interests of our executive officers and our shareholders. The mix of equity-based compensation granted in February 20182021 was as follows, based on the grant date fair value of the total award: 50% performance shares, 25% RSUs, and 25% non-qualified stock options.
Performance share grants were selected to ensure a strong pay-for-performance alignment of the Company'sCompany’s compensation program with drivers of shareholder value.value, specifically weighted equally between cumulative earnings per share and average return on equity for the three-year performance period. Participants can earn between 0% and 200% of the target performance share award based upon actual results. The performance share payouts are determined formulaically, subject to the authority of the Compensation and Human Resources Committee to make appropriate adjustments to account for events not contemplated when the performance targets were set. RSU grants were selected because they are full value shares with time vesting (typically, ratably over four years) and, as such, provide added retention value. Non-qualified stock options were selected because they have value only if the Company'sCompany’s stock price increases and, as such, provide incentives for sustained long-term stock price appreciation.
Non-qualified stock options typically vest ratably over four years. Our equity award types, vesting terms, and termination provisions are summarized in the chart below.
Non-qualified stock options typically vest ratably over four years. Our equity award types, vesting terms, and termination provisions are summarized in the chart below.
| 2022 Proxy Statement | Compensation Discussion and Analysis | | | 41 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
| |
| | | |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Performance Share Award (3-year performance period with cliff vesting) | | | | • Unvested performance share awards will vest if, within two years of a change in control, an executive terminates employment for Good Reason or is terminated without Cause (i.e., | | |||||||||||||||||||||
| | | | | | • If the executive officer is retirement-eligible, upon retirement, the number of performance shares earned at the end of the performance period based on actual performance, if any, will vest as if the executive officer had been continuously employed throughout the entire performance period, provided the executive officer served for at least one year of the performance period. | | |||||||||||||||||||||
| | | | | | • Upon termination of employment for Good Reason or without Cause (as these terms are defined in the award agreement), the executive officer will receive at the end of the applicable performance period, a pro rata number of performance shares that are earned, if any, based on the number of full months employed plus the number of months for any severance period. | | |||||||||||||||||||||
| | | | | | • Upon death or disability, the executive officer will receive at the end of the applicable performance period, the number of performance shares that are earned, if any. | | |||||||||||||||||||||
| | RSU Award (4-year ratable vesting*) And Stock Option Award (4-year ratable vesting) | | | | • Unvested award will vest in full if, within two years of a change in control, an executive terminates employment for Good Reason or is terminated without Cause (i.e., “double trigger” vesting), as these terms are defined in the award agreement. • Unless the executive officer is retirement-eligible, award is subject to earlier termination upon certain events related to termination of employment. | | |||||||||||||||||||||
| | | | | | • Unvested award will vest in full upon death or disability. | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
Except as provided in footnote 4 to the Outstanding Equity Awards at 2021 Fiscal Year-End table.
Long-Term Awards
2016-2018
2019-2021 Long-Term Goals and Context
The long-term performance share program creates financial incentives for achieving or exceeding three-year financial goals for the enterprise as follows:follows. The table below shows the goals for the 2019-2021 plan, as well as the Company’s actual performance against plan:
| | 2019-2021 Performance Measure | | | Weight | | | Threshold Performance | | | Target Performance | | | Maximum Performance | | | 2019-2021 Performance | | |||||||||||||||
| | Cumulative Adjusted Earnings Per Share | | | | | 50% | | | | $45.33 | | | $47.95 | | | $51.60 | | | $49.31 | | ||||||||||||
| | Return on Equity | | | | | 50% | | | | | | 22.2% | | | | | | 24.2% | | | | | | 26.2% | | | | | | 24.8% | | |
2016-2018 | Weight | Threshold Performance | Target Performance | Maximum Performance | Actual 2016-2018 Performance | | |||||||||||||||||
Cumulative Adjusted Earnings Per Share | | 50% | | $25.16 | | | $26.55 | | | $28.48 | | | $28.49 | | | ||||||||
| | | | | | | | | | | | | ||||||||||||
Return on Equity | | 50% | | | 18.5% | | | | 20.5% | | | | 22.5% | | | | 20.5% | | | ||||
| | | | | | | | | | | | | ||||||||||||
The performance measures and goals for the 2016-20182019-2021 performance period were established during the first quarter of 20162019 based on the Company'sCompany’s long-term business plan. The first year of the long-term business plan was based on the Company's 2016Company’s 2019 business plan. Subsequent years were based on assumptions and growth initiatives developed by the Company'sCompany’s business units and reviewed by the Board of Directors.
Key assumptions and elements of the 2016-20182019-2021 long-term business plan were:
•
Continued expansion of the Optum Care Delivery platform and capabilities;
•
Medicaid, Medicare Advantage, Medicare Supplement and Global growth in people served over the three-year period;
•
Commercial risk-based and fee-based health insurance growth in people served in all years, leveraging enhanced products, services, and distribution including a continued focus on diversification into ancillary businesses;
•
An expectation that medical cost trends would be consistent with historical levels;
| | 2022 Proxy Statement | Compensation Discussion and Analysis | | | 42 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
•
Modest US economic growth with a gradual increase in interest rates, and a more rapidly growing economy in Brazil, with a stable Brazilian Real — U.S. Dollar exchange rate;
•
•Medicaid, Medicare Advantage, Medicare Supplement, Part D and Global enrollment growth over the three-year period;
•Commercial risk-based health insurance growth from expansion into exchanges and growth in existing markets, leveraging enhanced products, services and distribution. Commercial fee-based health insurance enrollment growth in all years;
•Continued funding pressure in government businesses;
•An expectation that medical cost trends would be consistent with historical levels and that there would not be net favorable or unfavorable development in previously reported medical cost payable estimates;
•
Delivery of more effective and comprehensive clinical management;
•
•
Continued growth and enhancement of the quality and operations of our government businesses to compensate for continued expected funding pressures;businesses;
•
•
Continued growth and alignment of the Optum businesses, including growth in technology-enabled services and specialty networks products and services, driving distinctive revenue, margin, and earnings performance;
•
•Development and expansion of the Optum Care Delivery platform and capabilities;
•
Ongoing improvements to our consolidated operating cost ratio on a comparable business mix basis; and
•
•
Effective cross-enterprise collaboration among various business units for the benefit of customers and our overall reputation and performance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To achieve maximum performance for both the long-term cash incentive plan and the performance share plan, the Company would have had to achieve cumulative three-year adjusted earnings per share ("AEPS"(“AEPS”) performance of $28.48$51.60 and an average return on equity ("ROE"(“ROE”) of 22.5%26.2%. These maximum performance levels corresponded to a compound annual growth rate in AEPS of 18.1%15% over the three-year period. For long-term compensation purposes (see adjustments described below), the Company generated cumulative AEPS of $28.49,$49.31, which was abovebetween target and maximum performance levels, and accompanying ROE of 20.5%24.8%, which was atbetween target and maximum performance levels. This represented a compound annual AEPS growth rate of 18.8%14% over the three-year performance period.
period, consistent with the Company’s projected long-term growth rate of 13% to 16%.
Factors thatwhich positively or negatively influenced our results subsequent to the approval of the long-term business plan in early 20162019 included:
•
•
Significant acquisition activities over the three-year period;
•
•
•
Growth in investment and
•Greater than anticipated downward rate pressure in Medicare Advantage payment rates received other income from the federal government in 2017.
Company’s continued collaborative growth and innovation efforts with Optum Ventures; and
•
The permanent repeal of the Health Insurance Tax.
Similar to the annual incentive plan, the Company'sCompany’s long-term incentive plan allows for adjustments to the Company'sCompany’s reported results in determining long-term incentive plan awards, namely adjustments that account for the impact of changes in accounting principles, extraordinary items, and unusual or non-recurring gains or losses. Two adjustments were made in measuring 2016-20182019-2021 performance, which resulted in lowering the payouts to the named executive officers:
•
Excluded from 20182020 and 2021 results waswere the income tax benefit as a result ofimpacts from unusual events not contemplated when the Tax Cutsperformance targets were set; and Jobs Act enacted on December 22, 2017, which lowered the federal statutory income tax rate to 21%.
•
•
Excluded from 20162019, 2020 and 20172021 results waswere impacts from capital allocation actions not contemplated when the income tax benefitperformance targets were set, primarily from adoption of Accounting Standards Update 2016-09, which modifies several aspects of the accounting for share-based payment awards, including income tax consequences.
merger and acquisition activity and share repurchase activity.
| | 2022 Proxy Statement | Compensation Discussion and Analysis | | | 43 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
Since these two eventsfactors were outside ofnot contemplated in the control of management, resultingperformance targets, and would have resulted in a net benefit to management, they were excluded from final results.
2016-2018 Long-Term Cash Incentive Awards
The Long-Term Cash Incentive program has been phased outresults, reducing the calculated payout ratio and the 2016-2018related compensation.
| | Long-Term Performance Shares | | ||||||||||||||||||||||||||||||
| | Name | | | Threshold Shares (#) | | | Target Shares (#) | | | Maximum Shares (#) | | | Actual Shares Paid (#) | | | Paid Award (% of Target) | | |||||||||||||||
| | Andrew Witty* | | | | | 47 | | | | | | 24,051 | | | | | | 48,102 | | | | | | 32,229 | | | | | | 134% | | |
| | John F. Rex | | | | | 26 | | | | | | 13,309 | | | | | | 26,618 | | | | | | 17,835 | | | | | | 134% | | |
| | Dirk C. McMahon | | | | | 20 | | | | | | 10,458 | | | | | | 20,916 | | | | | | 14,014 | | | | | | 134% | | |
| | Brian R. Thompson | | | | | 15 | | | | | | 7,606 | | | | | | 15,212 | | | | | | 10,193 | | | | | | 134% | | |
| | Marianne D. Short | | | | | 17 | | | | | | 8,556 | | | | | | 17,112 | | | | | | 11,466 | | | | | | 134% | | |
| | David S. Wichmann** | | | | | 47 | | | | | | 24,337 | | | | | | 48,674 | | | | | | 32,612 | | | | | | 134% | | |
*
As previously disclosed, Mr. Witty’s 2019 performance period is the last cycleshares were granted as two separate grants, 18,063 target shares on February 14, 2019 and 5,988 target shares on November 6, 2019, for a total of the Long-Term Cash Incentive Award program. No new participants were added24,051 target shares.
**
Due to the Long-Term Cash Incentive program after 2016. Atlength of Mr. Wichmann’s tenure with the beginningCompany and under the standard terms of each three-year performance period, the Compensation Committee approved a "long-term cash incentive target opportunity" for each participating executive officer as a percentage of the executive officer's average base salary over the performance period. At the end of the performance period, the Compensation Committee reviewed the Company's achievement of the performance goals set at the beginning of the performance period and determined long-term cash incentiveequity awards based on such performance. In determining these awards, the Compensation Committee can use discretion to increase or decrease the actual awards in view of actual performance and individual contributions, but did not exercise such discretion for these awards.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the 2016-2018 performance period, the target opportunity for each participating executive officer was 50% of average base salary, and the maximum cash incentive award that an executive officer could earn was set by the Compensation Committee to be equal to two times the applicable long-term cash incentive target opportunity. In choosing this target opportunity, the Compensation Committee believed it was important to provide the same relative target opportunity to all of the named executive officers to increase collaboration, teamwork and accountability across the enterprise and to recognize the skills and versatility of each executive officer.
The target percentages for long-term cash incentive awards to our named executive officers and the actual long-term cash incentive awards paid for the 2016-2018 performance period are set forth in the table below:
Long-Term Cash Incentive Award | |||||||||||||||||||||||||||
| | | | | | | | | | | | | | | ||||||||||||||
Name | Target Percentage (% of 3-Year Average Base Salary) | Threshold Award Value ($) | Target Award Value ($) | Maximum Award Value ($) | Actual Award Paid ($) | Paid Award (% of Target) | |||||||||||||||||||||
Stephen J. Hemsley | | | 50% | | | | 2,102 | | | 584,423 | | | 1,168,846 | | | 876,700 | | | 150% | | | ||||||
| | | | | | | | | | | | | | | ||||||||||||||
David S. Wichmann | | | 50% | | | | 2,136 | | | 593,718 | | | 1,187,436 | | | 890,600 | | | 150% | | | ||||||
| | | | | | | | | | | | | | | ||||||||||||||
The primary factors considered by the Compensation Committee in the determination of the long-term cash incentive award amounts were achievement of the 2016-2018 AEPS and ROE goals between target and maximum performance levels. Because the Long-Term Cash Incentive Award program is being phased out, with no new participants added after 2016, Messrs. Rex, Witty and Nelson did not participate in the program.
2016-2018 Performance Share Awards
The use of performance shares as a component of the overallemployees receiving equity awards, grantedMr. Wichmann’s award was based upon the Compensation Committee's desire to encourage superior performance and build executive ownership; consideration of competitive market data; the value of utilizing a balanced system to facilitate prudent decision-making and mitigate risk; and past conversations with shareholders about the desirability of this type of equity award as a central component of a pay-for-performance program. The actual shares that were earnedeligible for the 2016-2018 performance period were above target due to the Company's strong ROE and earnings growth performance and are set forth in the table below as well as reflected in the 2018 Option Exercises and Stock Vested table:
retirement vesting.
Long-Term Performance Shares | ||||||||||||||||||||||||||
| | | | | | | | | | | | | |||||||||||||||
Name | Threshold Shares (#) | Target Shares (#) | Maximum Shares (#) | Actual Shares Paid (#) | Paid Award (% of Target) | |||||||||||||||||||||
Stephen J. Hemsley | | | 151 | | | | 42,057 | | | | 84,114 | | | | 63,086 | | | | 150 | % | | |||||
| | | | | | | | | | | | | |||||||||||||||
David S. Wichmann | | | 107 | | | | 29,687 | | | | 59,374 | | | | 44,531 | | | | 150 | % | | |||||
| | | | | | | | | | | | | |||||||||||||||
John F. Rex | | | 40 | | | | 11,246 | | | | 22,492 | | | | 16,869 | | | | 150 | % | | |||||
| | | | | | | | | | | | | |||||||||||||||
Steven H. Nelson | | | 53 | | | | 14,844 | | | | 29,688 | | | | 22,266 | | | | 150 | % | | |||||
| | | | | | | | | | | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Awards
Equity Award Practices
The Compensation Committee'sand Human Resources Committee’s equity award policy requires that all grants of equity to be made at set times. We do not have a specific program, plan or practice to time equity compensation awards to named executive officers in coordination with our release of material information.
The Company does not pay dividend equivalents on performance shares granted to employees. Unvested shares of RSUs receive dividend equivalents, which are subject to the same terms as the RSUs and will be forfeited if the underlying RSUs do not vest. The determination to pay dividend equivalents on RSUs was made after considering market practices.
The aggregate number of shares subject to equity awards made in 20182021 for all employees was approximatelyless than 1% of the Company'sCompany’s shares outstanding at the end of 2018.
2021.
Equity Awards — 2018
2021
In February 2018,2021, the Compensation and Human Resources Committee granted the following target number of performance shares, RSUs and stock options to our named executive officers:
| | Name | | | Target Number of Performance Shares (#) | | | Annual RSU Award (#) | | | Annual Stock Option Award (#) | | |||||||||
| | Andrew Witty | | | | | 17,958 | | | | | | 10,969 | | | | | | 51,325 | | |
| | John F. Rex | | | | | 14,242 | | | | | | 8,699 | | | | | | 40,703 | | |
| | Dirk C. McMahon | | | | | 14,242 | | | | | | 8,699 | | | | | | 40,703 | | |
| | Brian R. Thompson | | | | | 6,559 | | | | | | 6,193 | | | | | | 28,684 | | |
| | Marianne D. Short | | | | | 5,622 | | | | | | 2,811 | | | | | | 12,779 | | |
| | David S. Wichmann | | | | | — | | | | | | — | | | | | | — | | |
| | 2022 Proxy Statement | Compensation Discussion and Analysis | | | 44 | |
Name | Target Number of Performance Shares (#) | Annual RSU Award (#) | Annual Stock Option Award (#) | |||||||||||||
Stephen J. Hemsley | | | 19,856 | | | | 9,928 | | | | 53,042 | | | |||
| | | | | | | | | |||||||||
David S. Wichmann | | | 24,489 | | | | 12,245 | | | | 65,418 | | | |||
| | | | | | | | | |||||||||
John F. Rex | | | 11,031 | | | | 5,516 | | | | 29,468 | | | |||
| | | | | | | | | |||||||||
Andrew P. Witty | | | 17,183 | | | | 8,592 | | | | 47,096 | | | |||
| | | | | | | | | |||||||||
Steven H. Nelson | | | 14,892 | | | | 7,446 | | | | 39,781 | | | |||
| | | | | | | | | |||||||||
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
The grant date fair values and terms of these equity awards are discussed in the 20182021 Grants of Plan-Based Awards table.
Table of Contents Please see the “Long-Term Incentive Compensation” section above for additional details regarding the rationale underlying the Compensation and Human Resources Committee’s determination to award performance shares, RSUs and stock options.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits
In 2006, the accrued value of the benefit payable under Mr. Hemsley's individual supplemental executive retirement plan agreement (the "SERP") was frozen based on his then-current age and average base salary and converted into a lump sum cash benefit of $10,703,229. On June 7, 2016, the Company amended Mr. Hemsley's SERP to convert the $10,703,229 cash benefit into deferred stock units ("DSUs") to further align Mr. Hemsley's interests with those of shareholders, allow Mr. Hemsley to earn a return on the SERP balance that will be tied to the Company's stock price performance, and provide the opportunity for Mr. Hemsley to receive deferred dividend equivalents on the SERP balance. Pursuant to the amended SERP, the number of DSUs issued was based on the amount of the cash benefit divided by the average closing price of the Company's common stock over the preceding five trading days from the date of conversion of the cash balance. Mr. Hemsley is eligible to receive dividend equivalents in the form of additional DSUs, which are paid at the same rate and at the same time that dividends are paid to the Company's shareholders. During 2018, Mr. Hemsley received dividend equivalents in the form of an additional 1,110 DSUs that were added to the SERP balance. Upon termination of Mr. Hemsley's employment for any reason, the DSUs held in the SERP will be converted into shares of common stock and will be paid six months and one day after his termination.
Benefits
In addition to generally available benefits, our executive officers are eligible to receive supplemental long-term disability coverage equal to 60% of base salary, and all of our named executive officers other than Mr. Hemsley, receive supplemental group term life insurance coverage of $2 million. Executive officers are also eligible to participate in our non-qualified Executive Savings Plan. See the 20182021 Non-Qualified Deferred Compensation table for additional information regarding contributions, earnings and distributions for each named executive officer under the Executive Savings Plan. Our Executive Savings Plan does not provide for guaranteed or above-market interest.
In 2020, we discontinued providing company matching credits under this plan.
Perquisites
We generally do not provide perquisites such as excise tax gross-ups company automobiles, security services, private jet services, financial planning services or club membershipsperquisites to our executive officers. We have agreed to provide Mr.Andrew Witty with tax equalization payments to ensure that, as a U.S. non-resident, his overall tax obligation is the same as if he were taxed exclusively in the United Kingdom, where he resides, including assistance in tax return preparation due to the complexity of multi-jurisdictional filing requirements. We generally prohibit personal use of corporate aircraft by any executive officer unless the Company is reimbursed for the full incremental cost to the Company of such use. Because there is essentially no incremental cost to the Company, we permit on occasion an executive officer'sofficer’s family member to accompany the executive officer on a business flight on Company aircraft provided a seat is available.
Employment Agreements and Post-Employment Payments and Benefits
The Company has a policy of enteringentered into employment agreements with each of our named executive officers. These employment agreements are described in greater detail in "Executive“Executive Employment Agreements."
Table of ContentsAgreements” and “2021 Summary Compensation Table.”
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Stock Ownership Guidelines and Stock Retention Policy
The Compensation and Human Resources Committee believes that executive stock ownership aligns management'smanagement’s interests with those of shareholders and fosters a long-term outlook, while also mitigating compensation risk. Under our stock ownership guidelines, each executive officer must beneficially own at least the following amounts of the Company'sCompany’s common stock within five years of the executive officer'sofficer’s election or appointment as an executive officer:
•for the Executive Chairman, eight times base salary;
•
for the CEO, eight times base salary;
•
•
for executive officers who are direct reports of the CEO, or the Chief Executive Officer of Optum or UnitedHealthcare, three times base salary; and
•
•
for any other executive officers who are not direct reports of the CEO, two times base salary.
Stock options and stock appreciation rights ("SARs") do not count towards satisfying the ownership requirements under the guidelines, regardless of their vesting status, and performance shares do not count towards satisfying the ownership requirements until they are vested. Time-based RSUs and restricted stock awards are counted toward the satisfaction of the ownership requirements. The Compensation and Human Resources Committee periodically reviews compliance with the ownership requirements. As of April 9, 2019,8, 2022, all of our named executive officers were in compliance with the ownership requirements, including Mr. Wichmann, who owned shares with a value equal to 169 times his base salary.
requirements.
| | 2022 Proxy Statement | Compensation Discussion and Analysis | | | 45 | |
| | 1 | | | Board of Directors | | | | 2 | | | Corporate Governance | | | | 3 | | | Executive Compensation | | | | 4 | | | Audit | | | | 5 | | | Annual Meeting | | | | 6 | | | Other Information | |
The Board has established a stock retention policy for executive officers that are subject to Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"“Exchange Act”), which includes our named executive officers. Under this policy, Section 16 officers are generally required to retain for at least one year one-third of the net shares acquired upon the vesting or exercise of any equity awards.
Transactions in Company Securities; Prohibition on Hedging, and Short Sales
and Pledging
In general, SEC rules prohibit uncovered short sales of our common stock by our executive officers, including the named executive officers. Accordingly, our insider trading policy prohibits short sales and hedging transactions of our common stock by all employees and directors. OurHedging transactions include, for example, purchase or sale of options (puts or calls, whether covered or uncovered), equity swaps or other derivatives directly linked to the Company’s securities. Additionally, our insider trading policy prohibits hedgingpledging transactions by all directors and executive officers and discourages our employees from pledging transactions.
Consideration of Risk in Named Executive Officer Compensation
Our compensation programs are balanced, focused on long-term pay-for-performance, allow for discretion and requires advance approvalare overseen by an independent Compensation and Human Resources Committee. The Compensation and Human Resources Committee believes the design of the Compensation Committeecompensation program for our executive officers does not encourage excessive or unnecessary risk-taking, as illustrated by the following list of features:
•
Our annual cash bonus program includes a variety of financial and non-financial measures that require substantial performance on a broad range of initiatives;
•
Our equity awards are delivered through a balanced mix of performance shares, RSUs and stock options to encourage sustained performance over time;
•
A large majority of management compensation is delivered in long-term incentives that vest over multiple years;
•
No duplicative metrics between annual and long-term incentive programs;
•
Payouts are capped under the annual incentive and performance share programs;
•
We have stock ownership guidelines for our executive officers;
•
We require executive officers to hold, for at least one year, one-third of the net shares acquired upon vesting or exercise of any pledgingequity award granted; and
•
We have a clawback policy that entitles the Board to seek reimbursement from any executive directly involved in misconduct causing a restatement of common stock by directors,financials, detrimental conduct or violation of certain employment agreement provisions, including any non-compete, non-solicit or confidentiality provisions. Actions that trigger the clawback policy may require an executive officersto reimburse all or a portion of certain annual incentive payments and equity awards. The Board also has the right to cancel or reduce the executive’s rights to any incentive payment or equity awards.
In addition, our Compensation and Human Resources Committee retains discretion to adjust compensation for quality of performance, adherence to Company values and other members of management. In 2018, no executive officer or director sought or received advance approval from the Compensation Committee regarding pledging transactions, and no executive officer had any pledges outstanding.
factors.
factors.
| 2022 Proxy Statement | Compensation Discussion and Analysis | | |
| |
| |
| | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
|
Directors | | | |
| | | Corporate Governance | | | |
| | | Executive Compensation | | | |
| | |
| | | |
| | | Annual Meeting | | | |
| | | Other Information | |
As discussed in Accounting and Tax Considerations Name and Principal Position Stephen J. Hemsley Executive Chairman David S. Wichmann CEO John F. Rex Executive Vice President and CFO Andrew P. Witty Executive Vice President and CEO, Optum(7) Steven H. Nelson Executive Vice President and CEO, UnitedHealthcare Stephen J. Hemsley David S. Wichmann John F. Rex Andrew P. Witty Steven H. Nelson Stephen J. Hemsley David S. Wichmann John F. Rex Andrew P. Witty Steven H. Nelson Stephen J. Hemsley David S. Wichmann John F. Rex Andrew P. Witty Steven H. Nelson Stephen J. Hemsley David S. Wichmann Stephen J. Hemsley David S. Wichmann John F. Rex Andrew P. Witty Steven H. Nelson Name Stephen J. Hemsley Performance Share Award(3)(4) RSU Award(3) Stock Option Award(3) David S. Wichmann Annual Cash Incentive Award(2) Performance Share Award(3)(4) RSU Award(3) Stock Option Award(3) John F. Rex Annual Cash Incentive Award(2) Performance Share Award(3)(4) RSU Award(4) Stock Option Award(4) Andrew P. Witty Annual Cash Incentive Award(2) Performance Share Award(3)(4) RSU Award(3) RSU Award(5) Stock Option Award(3) Steven H. Nelson Annual Cash Incentive Award(2) Performance Share Award(3)(4) RSU Award(3) Stock Option Award(3) executive officer equal two times each executive Name Stephen J. Hemsley David S. Wichmann John F. Rex Andrew P. Witty Steven H. Nelson Name Stephen J. Hemsley David S. Wichmann John F. Rex Andrew P. Witty(6) Steven H. Nelson Stephen J. Hemsley Steven H. Nelson Stephen J. Hemsley David S. Wichmann John F. Rex Steven H. Nelson Stephen J. Hemsley David S. Wichmann John F. Rex Steven H. Nelson Stephen J. Hemsley David S. Wichmann Steven H. Nelson Name (a) Stephen J. Hemsley David S. Wichmann John F. Rex Andrew P. Witty Steven H. Nelson Stephen J. Hemsley David S. Wichmann John F. Rex Andrew P. Witty Steven H. Nelson Summary of Compensation Components 2021 Summary Compensation Table for a description of Name Stephen J. Hemsley Cash Payments Annual Cash Incentive(1) DSUs in the SERP Insurance Benefits Acceleration of Equity(2) Total(3) David S. Wichmann Cash Payments Annual Cash Incentive(1) Insurance Benefits Acceleration of Equity(2) Total(3) John F. Rex Cash Payments Annual Cash Incentive(1) Insurance Benefits Acceleration of Equity(2) Total(3) Andrew P. Witty Cash Payments Annual Cash Incentive(1) Insurance Benefits Acceleration of Equity(2) Total(3) Steven H. Nelson Cash Payments Annual Cash Incentive(1) Insurance Benefits Acceleration of Equity(2) Total(3) Thompson; and $23,828,434 for Ms. Short. We made significant investments in our employee population in 2021 and as a result we saw a meaningful (~10%) increase in the compensation of our median employee. We consistently applied total ” Audit Management represented to the Fee Category Audit Fees Audit-Related Fees(1) Total Audit and Audit-Related Fees Tax Fees(2) All Other Fees(3) Total 2022. Termination Pay — Proposal 4 political process and its existing political contribution reports do align with our values and mission. www.virtualshareholdermeeting.com/UNH2022 and enter the control number provided on your proxy card, voting instruction form or Notice. follow up matters directly. By Telephone or Internet. All shareholders of record can vote by telephone from the United States and Canada, using the toll-free telephone number on the proxy card, or through the www.virtualshareholdermeeting.com/UNH2022 to vote during the meeting. political contributions congruency report. ” Other Shareholder Proposals for Presentation at the Name and Address of Beneficial Owner The Vanguard Group, Inc.(1) 100 Vanguard Boulevard Malvern, Pennsylvania 19355 BlackRock, Inc.(2) 55 East 52nd Street New York, New York 10055 FMR LLC(3) 245 Summer Street Boston, Massachusetts 02210 another entity. Any member of the As required under SEC rules, transactions in which the Company was or is to be a participant since the beginning of the Company’s last fiscal year and the amount involved exceeds $120,000, and in which any related person had or will have a direct or indirect material interest, are disclosed below. 2021. 2021. comparable real estate transactions. GAAP net earnings attributable to UnitedHealth Group common shareholders Revaluation of U.S. net deferred tax liabilities due to tax reform Intangible amortization Tax effect of intangible amortization Adjusted net earnings attributable to UnitedHealth Group common shareholders GAAP diluted earnings per share Revaluation of U.S. net deferred tax liabilities due to tax reform per share Intangible amortization per share Tax effect per share of intangible amortization Adjusted diluted earnings per share Potential Impact on Compensation from Executive Misconduct/Compensation ClawbacksIf the Board of DirectorsCompensation and Human Resources Committee determines that an executive officer has engaged in fraud or misconduct,detrimental conduct as defined in the Board of Directorsclawback policy, the Compensation and Human Resources Committee may take a range of actions to remedy the misconduct,detrimental conduct prevent its recurrence and impose such discipline as would be appropriate, including, without limit: (i) terminating employment andemployment; (ii) initiating legal action against the executive officer.officer; and (iii) requiring reimbursement of (or canceling or reducing) rights to any annual incentive payments or equity awards subject to the clawback policy. In addition, with respect to our senior executives, including our named executive officers, if the fraud or misconduct causes, in whole or in part, a material restatement of the Company'sCompany’s financial statements, action may include (a) seeking reimbursement of the entire amount of cash incentive compensation awarded to the executive officer, if the executive officer would have received a lower (or no) cash incentive award if calculated based on the restated financial results; (b) canceling all outstanding vested and unvested equity awards subject to the clawback policy and requiring the executive officer to return to the Company all gains from equity awards realized during the 12-month period following the filing of the incorrect financial statements; and (c) seeking reimbursement of the entire amount of any bonus paid.Consideration of Risk in Named Executive Officer CompensationOur compensation programs are balanced, focused on long-term pay-for-performance, allow for discretion and are overseen by an independent Compensation Committee. The Compensation Committee believes that the design of the compensation program for our executive officers does not encourage excessive or unnecessary risk-taking, as illustrated by the following list of features:•Our annual cash bonus program includes a variety of financial and non-financial measures that require substantial performance on a broad range of initiatives;•Our equity awards are delivered through a balanced mix of performance shares, RSUs and stock options to encourage sustained performance over time;•We have stock ownership guidelines for our executive officers;•We generally require executive officers to hold, for at least one year, one-third of the net shares acquired upon vesting or exercise of any equity award granted; and•We have a clawback policy that entitles the Board of Directors to seek reimbursement from any executive involved in fraud or misconduct causing a restatement of financials, or violation of certain employment agreement provisions, including any non-compete, non-solicit or confidentiality provisions. The executive would be required to reimburse the Company the entire amount of a bonus paid, not just the amount that would not have been earned had the executive received a lower award based on the restated earnings.In addition, our Compensation Committee retains discretion to adjust compensation for quality of performance, adherence to Company values and other factors."Enterprise-Wide“Enterprise-Wide Incentive Compensation Risk Assessment,"” a compensation risk assessment is performed annually and the results are reviewed with the Compensation and Human Resources Committee. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationInternal Revenue Code Section 162(m)(6) addresses the tax deductibility of compensation paid by health insurance providers, including the Company. Section 162(m)(6) provides an annual tax deduction limit of $500,000 per person per year for compensation that we pay to any of our employees, directors, officers and any other individuals who provide services to or on behalf of the Company. Any outstanding stock optionsWhile the Compensation and SARs that were granted prior to 2010 are not subject to the tax deduction limitation. While theHuman Resources Committee considers the impact of Section 162(m)(6), it believes that shareholder interests are best served by not restricting the Committee'sCompensation and Human Resources Committee’s discretion and flexibility in crafting the executive compensation program, even if non-deductible compensation expenses could result. The Compensation and Human Resources Committee alsoconsiders the accounting consequences of its compensation decisions.Peer Group and Managed Care Companies Peer Group Managed Care Companies3M CompanyCompensation and Human Resources Committee Report Gilead Sciences Inc. Aetna Inc.Abbott Laboratories HCA HealthcareAnthem Inc.AbbVie Inc.Hewlett-Packard CompanyCIGNA Corp.Accenture, plcHumana Inc.Humana Inc.Aetna Inc.International Business Machines Corp.American Express CompanyJohnson & JohnsonAmerican International Group, Inc.JPMorgan Chase & Co.Ameriprise Financial, Inc.MasterCard IncorporatedAmerisourceBergen CorporationMcKesson CorporationAmgen Inc.Medtronic plcAnthem Inc.Merck & Co. Inc.Bank of America CorporationMetLife, Inc.Berkshire Hathaway Inc.Microsoft CorporationBest Buy Co., Inc.Morgan StanleyBiogen Inc.Oracle CorporationBristol-Myers Squibb CompanyPfizer Inc.Cardinal Health, Inc.Procter & Gamble Co.Cargill, IncorporatedPrudential Financial, Inc.CIGNA Corp.Target Corp.Cisco Systems, Inc. The Allstate CorporationCitigroup, Inc.The Goldman Sachs Group, Inc.CVS Health CorporationThe Travelers Companies, Inc.Eli LillyCompensation and CompanyU.S. BancorpExpress Scripts Holding CompanyUnited Parcel Service, Inc.FedEx CorporationVisa, Inc.General Electric CompanyWalgreens Boots Alliance, Inc.General Mills, Inc.Wells Fargo & Company 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationThe CompensationHuman Resources Committee has reviewed and discussed the above Compensation Discussion and Analysis with management. Based on its review and discussions, the Compensation and Human Resources Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the proxy statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. This report was provided by the following independent directors who comprise the Compensation and Human Resources Committee: Members of the Compensation and Human Resources Committee Timothy P. Flynn (Chair)
Valerie C. Montgomery Rice, M.D.
John H. Noseworthy, M.D. The members of the Compensation and Human Resources Committee listed above participated in the review, discussion and recommendation with respect to the Compensation Discussion and Analysis be included in the proxy statementAnalysis. 2022 Proxy Statement | Compensation and Human Resources Committee Report 47 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information Compensation and incorporated by reference into the Company's Annual Report on Form 10-K for the year ended December 31, 2018. This report was provided by the following independent directors who comprise the Compensation Committee:William C. Ballard, Jr. (Chair)Richard T. BurkeTimothy P. FlynnGail R. Wilensky, Ph.D.CompensationHuman Resources Committee Interlocks and Insider ParticipationDuring fiscal 2018, Messrs. Ballard, Burke,2021, Mr. Flynn Witty and Dr.Drs. Noseworthy and Wilensky served on the Compensation and Human Resources Committee. Mr. Witty stepped down fromDr. Montgomery Rice joined the Board on March 13, 2018.Compensation and Human Resources Committee in February 2022, replacing Dr. Wilensky. None of these persons had ever been an officer or employee of the Company or any of its subsidiaries while serving on the Compensation and Human Resources Committee. Furthermore, during 2018,2021, none of these persons served as a member of the compensation committeeCompensation and Human Resources Committee (or other board committee performing equivalent functions) or as a director of another entity where an executive officer of such entity served on ourCompensation and Human Resources Committee or Board. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationThe following table provides certain summary information for the years ended December 31, 2018, 20172021, 2020 and 20162019 relating to compensation paid or granted to, or accrued by us on behalf of our named executive officers.Name and Principal Position Year Salary
($)(2) Bonus
($) Stock
Awards
($)(3) Option
Awards
($)(4) Non-Equity
Incentive Plan
Compensation
($)(5) All Other
Compensation
($)(6) Total
($) Andrew Witty(1)
Chief Executive Officer 2021 1,450,769 — 10,781,573 3,593,777 2,550,000 57,024 18,433,143 2020 418,846 550,000 8,025,223 2,675,007 920,000 268,100 12,857,176 2019 1,100,000 — 9,375,614 3,125,046 2,750,000 175,360 16,526,020 John F. Rex
Executive Vice President
and CFO 2021 1,161,539 — 8,550,501 2,850,024 2,050,000 25,904 14,637,967 2020 1,000,000 — 6,750,241 2,250,044 2,500,000 96,777 12,597,062 2019 1,000,000 — 5,250,133 1,750,040 2,500,000 126,912 10,627,085 Dirk C. McMahon
President and Chief
Operating Officer 2021 1,161,539 — 8,550,501 2,850,024 2,050,000 31,424 14,643,488 2020 1,000,000 — 6,750,241 2,250,044 2,500,000 106,199 12,606,484 2019 896,154 — 4,125,367 1,375,005 2,500,000 70,454 8,966,980 Brian R. Thompson
Executive Vice President
and CEO, UnitedHealthcare 2021 951,154 — 4,813,113 2,187,555 1,700,000 19,184 9,671,006 2020 — — — — — — — 2019 — — — — — — — Marianne D. Short(1)
Executive Vice President
and Chief Legal Officer 2021 844,231 — 3,375,309 1,125,063 1,030,000 62,490 6,437,093 2020 850,000 — 2,250,181 2,250,044 1,500,000 88,305 6,938,530 2019 850,000 — 3,375,085 1,125,012 1,500,000 113,580 6,963,677 David S. Wichmann(1)
Former CEO 2021 393,077 — — — — 10,828,016 11,221,093 2020 1,400,000 — 9,600,592 3,200,038 3,500,000 172,083 17,872,713 2019 1,384,615 — 9,600,348 3,200,033 4,500,000 201,993 18,886,989 *Year Salary
($)(1)Bonus
($)Stock
Awards
($)(2)Option
Awards
($)(3)Non-Equity
Incentive Plan
Compensation
($)(4)Change in
Pension Value
and
Non-Qualified
Deferred
Compensation
Earnings
($)(5)All Other
Compensation
($)(6)Total
($) 2018 1,000,000 — 6,750,246 2,250,042 876,700 281,015 194,510 11,352,513 2017 1,206,538 — 8,325,219 2,775,462 5,745,600 230,853 170,481 18,454,153 2016 1,300,000 — 7,012,640 2,337,015 4,908,500 148,398 137,358 15,843,911 2018 1,300,000 — 8,325,394 2,775,032 5,390,600 — 316,330 18,107,356 2017 1,162,308 — 8,325,566 2,775,328 4,909,800 — 216,974 17,389,976 2016 1,100,000 — 4,950,066 1,649,664 4,474,500 — 142,216 12,316,446 2018 976,923 — 3,750,212 1,250,033 2,500,000 — 110,744 8,587,912 2017 842,308 — 3,750,131 1,250,201 2,000,000 — 88,205 7,930,845 2016 721,923 — 3,125,283 1,875,049 1,400,000 — 62,968 7,185,223 2018 613,462 — 16,300,304 2,100,011 2,200,000 — 18,773 21,232,550 2018 984,615 — 5,062,684 1,687,510 2,000,000 — 28,215 9,763,024 2017 857,692 — 3,150,092 1,050,190 2,500,000 — 22,470 7,580,444 *"Compensation“Compensation Discussion and Analysis"Analysis” above for a description of our executive compensation program necessary for an understanding of the information disclosed in this table. Please also see "Executive“Executive Employment Agreements"Agreements” below for a description of the material terms of each named executive officer'sofficer’s employment agreement.(1)All principal positions set forth above are as of December 31, 2021. Andrew Witty has served as Chief Executive Officer of the Company since February 3, 2021. David Wichmann served as Chief Executive Officer of the Company until February 2, 2021. Mr. Wichmann has not been provided with any additional compensation since his departure from the Company in 2021. Mr. Wichmann entered into an Amended and Restated Employment Agreement with the Company on December 1, 2014, and an Amendment to Employment Agreement on August 16, 2017. Mr. Wichmann’s employment ended on March 31, 2021. The terms of his employment agreement provide for him 2022 Proxy Statement | Interlocks and Insider Participation | 2021 Summary Compensation Table 48 (1) 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information to receive payments equal to his most recent base salary and non-equity incentive compensation award for a two-year period following his departure and for him to be subject to restrictive covenants, including non-competition and non-solicitation provisions. These terms are the same as the disclosures made in our 2021 proxy statement, and no modification to these terms has been made since that filing. Ms. Short retired as Executive Vice President and Chief Legal Officer on February 28, 2022.(2)Amounts reported reflect the base salary earned by named executive officers in the years ended December 31, 2018, 20172021, 2020 and 2016. Amounts2019. Amount reported for 2018Mr. Wichmann for 2021 include the following amounts$23,585 deferred by the named executive officersMr. Wichmann under our Executive Savings Plan. Mr. Witty was ineligible to participate in the Executive Savings Plan during his tenure as a director from the beginning of the fiscal year through March 13, 2018. Amount
Deferred $ 60,000 $ 78,000 $ 58,615 — — 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformation(2)2018, 20172021, 2020 and 20162019 and are computed in accordance with FASB ASC Topic 718, based on the closing stock price on the grant date. The grant date fair value of RSUs granted in 20182021 and the grant date fair value of performance shares granted in 20182021 if target performance and maximum performance iswere achieved are as follows: Restricted
Stock Units
($) Performance Shares Name Target
($) Maximum
($) Andrew Witty 3,593,883 7,187,690 14,375,380 John F. Rex 2,850,140 5,700,361 11,400,722 Dirk C. McMahon 2,850,140 5,700,361 11,400,722 Brian R. Thompson 2,187,873 2,625,240 5,250,480 Marianne D. Short 1,125,103 2,250,206 4,500,412 Performance Shares Restricted
Stock Units Name Target Maximum $ 2,250,082 $ 4,500,164 $ 9,000,328 $ 2,775,207 $ 5,550,187 $ 11,100,374 $ 1,250,146 $ 2,500,066 $ 5,000,132 $ 12,100,263 $ 4,200,041 $ 8,400,082 $ 1,687,561 $ 3,375,123 $ 6,750,246 20182021 Grants of Plan-Based Awards table for more information on stock awards granted in 2018.2021.(4)(3)The actual value to be realized by a named executive officer depends upon the performance of the Company'sCompany’s stock and the length of time the award is held. No value will be realized with respect to any award if the Company'sCompany’s stock price does not increase following the award'saward’s grant date or if the executive officer does not satisfy the vesting criteria.The amounts reported in this column for 20182021 reflect the aggregate grant date fair value of stock options granted in 20182021 computed in accordance with FASB ASC Topic 718. For a description of the assumptions used in computing the aggregate grant date fair value, see Note 11 to the Consolidated Financial Statements included in the Company'sCompany’s Annual Report on Form 10-K for the year ended December 31, 2018.2021.(5)(4)Amounts reported include bothreflect annual and long-term cash incentive awards to our named executive officers under our 2008 Executive Incentive Plan. The 20182021 annual incentive awards, including amounts deferred by the named executive officers, were the following:Name Total Amount of
Annual Cash
Incentive Award
($) Amount of Annual
Cash Incentive
Award Deferred
($) Andrew Witty 2,550,000 — John F. Rex 2,050,000 — Dirk C. McMahon 2,050,000 123,000 Brian R. Thompson 1,700,000 — Marianne D. Short 1,030,000 — Name Total Amount of
Annual Cash
Incentive Award Amount of Annual
Cash Incentive
Award Deferred — — $ 4,500,000 $ 270,000 $ 2,500,000 $ 150,000 $ 2,200,000 — $ 2,000,000 — The long-term cash incentive awards for the 2016-2018 incentive period under our 2008 Executive Incentive Plan, including amounts deferred by the named executive officers, are set forth below. Because the long-term cash incentive award program is being phased out, with no new participants added after 2016, Messrs. Rex, Witty and Nelson did not participate in the program.Name Period Total Amount of
Long-Term Cash
Incentive Award Amount of
Long-Term Cash
Incentive Award
Deferred 2016-2018 $ 876,700 — 2016-2018 $ 890,600 $ 53,436 2022 Proxy Statement | 2021 Summary Compensation Table 1
DirectorsCorporate
GovernanceExecutive
CompensationAuditAudit55 Annual
MeetingOther
Information (6)(5)Named executive officers participate in our Executive Savings Plan, which is a non-qualified deferred compensation plan. The Executive Savings Plan does not credit above-market earnings or preferential earnings to the amounts deferred, and accordingly, no non-qualified deferred compensation earnings have been reported. Under the Executive Savings Plan, there are no measuring investments tied to Company stock performance. The measuring investments are a predetermined collection of unaffiliated mutual funds identified by the Company.As described in the Compensation Discussion and Analysis section of the 2017 proxy statement, on June 7, 2016, the Company amended Mr. Hemsley's SERP to convert the cash benefit into DSUs. The DSUs held in the SERP are eligible to receive dividend equivalents in the form of additional DSUs, which are paid at the same rate and at the same time that dividends are paid to the Company's shareholders. The amounts reported in the table reflect the value of dividend equivalents granted.(6)Name Company Matching
Contributions
Under 401(k)
Savings Plan
($) Insurance
Premiums
($) Separation Pay
($) Tax
Equalization
and Tax Return
Preparation
($) Andrew Witty — 10,320 — 46,704 John F. Rex 13,050 12,854 — — Dirk C. McMahon 13,050 18,374 — — Brian R. Thompson 13,050 6,134 — — Marianne D. Short 13,050 49,440 — — David S. Wichmann 13,050 2,966 10,812,000 — Name Year Company Matching
Contributions
Under 401(k)
Savings Plan Company Matching
Contributions
Under Executive
Savings Plan Insurance
Premiums Hart-Scott-
Rodino
Filing Fee Employment
Onboarding
and Tax
Equalization 2018 $ 12,375 $ 180,000 — — — 2018 $ 12,375 $ 166,500 $ 12,455 $ 125,000 — 2018 $ 8,981 $ 89,308 $ 12,455 — — 2018 — — — — $ 15,588 2018 $ 12,375 — $ 15,840 — — 20182021 if the aggregate amount of such compensation to each of such named executive officersofficer was less than $10,000. The Company providesprovided each of Messrs. Wichmann, Rex, Witty and Nelsonthe named executive officers a $2 million face value term life insurance policy. The value of Company stock owned by Mr. Wichmann exceeded limits set forth in the Hart-Scott-Rodino (HSR) regulations and he was required to make an HSR filing in 2018 in order to maintain and increase his stock ownership levels in the Company. Due to Mr. Wichmann's position as CEO and a director of the Company, he is not able to rely on the passive investor exemption contained in the HSR regulations. Pursuant to a policy approved by the Compensation Committee, the Company made the payment of the $125,000 HSR filing fee on Mr. Wichmann's behalf. This amount was imputed as income to Mr. Wichmann, and Mr. Wichmann did not receive any tax gross-up on this amount. The employment onboarding payments for Mr. Witty were made to assist him in finding temporary housing in the United States as part of the commencement of his employment with the Company. Mr.Andrew Witty is also provided with tax equalization pursuant to the Company'sCompany’s tax equalization policy to ensure that as a U.S. non-resident, his overall tax obligation is the same as if he were taxed exclusively in the United Kingdom where he resides.Kingdom. This policy also provides assistance in preparation of tax returns due to the complexity of multi-jurisdictional filing requirements.(7)The terms of Mr. Witty became CEO of Optum, effective July 1, 2018. Compensation paidWichmann’s employment agreement provided for payments approximating his most recent base salary and non-equity incentive compensation award for a two-year period following departure and is subject to restrictive covenants, including non-competition and non-solicitation provisions during this two-year period. Pursuant to applicable SEC rules, the entire amount payable to Mr. Wichmann over the two-year period is included in connectionthe table. The amount set forth in this footnote for Mr. Wichmann is consistent with the disclosures made in the Company’s 2021 proxy statement. Mr. Witty's service as a director,Wichmann has not been provided with any additional compensation since his departure from the beginning of the fiscal year through March 13, 2018, is reportedCompany in the Director Compensation Table.2021.2022 Proxy Statement | 2021 Summary Compensation Table 1
DirectorsCorporate
GovernanceExecutive
CompensationAuditAudit55 Annual
MeetingOther
Information The following table presents information regarding each grant of an award under our compensation plans made during 20182021 to our named executive officers for fiscal year 2018.2021.Name Grant
Date Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards Estimated Future Payouts
Under Equity Incentive
Plan Awards All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#) All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#) Exercise
or Base
Price of
Option
Awards
($/Sh) Grant Date
Fair Value
of Stock
and Option
Awards
($)(1) Threshold
($) Target
($) Maximum
($) Threshold
(#) Target
(#) Maximum
(#) Andrew Witty Annual Cash Incentive Award(2) — 2,700,000 3,000,000 6,000,000 — — — — — — — Performance Share Award(3)(4) 6/7/2021 — — — 26 17,958 35,916 — — — 7,187,690 RSU Award(3) 2/22/2021 — — — — — — 10,969 — — 3,593,883 Stock Option Award(3) 2/22/2021 — — — — — — — 51,325 327.64 3,593,777 John F. Rex Annual Cash Incentive Award(2) — 2,160,000 2,400,000 4,800,000 — — — — — — — Performance Share Award(3)(4) 6/7/2021 — — — 21 14,242 28,484 — — — 5,700,361 RSU Award(3) 2/22/2021 — — — — — — 8,699 — — 2,850,140 Stock Option Award(3) 2/22/2021 — — — — — — — 40,703 327.64 2,850,024 Dirk C. McMahon Annual Cash Incentive Award(2) — 2,160,000 2,400,000 4,800,000 — — — — — — — Performance Share Award(3)(4) 6/7/2021 — — — 21 14,242 28,484 — — — 5,700,361 RSU Award(3) 2/22/2021 — — — — — — 8,699 — — 2,850,140 Stock Option Award(3) 2/22/2021 — — — — — — — 40,703 327.64 2,850,024 Brian R. Thompson Annual Cash Incentive Award(2) — 1,800,000 2,000,000 4,000,000 — — — — — — — Performance Share Award(3)(4) 6/7/2021 — — — 10 6,559 13,118 — — — 2,625,240 RSU Award(3) 2/22/2021 — — — — — — 4,006 — — 1,312,526 RSU Award(3) 6/7/2021 — — — — — — 2,187 — — 875,347 Stock Option Award(3) 2/22/2021 — — — — — — — 18,745 327.64 1,312,525 Stock Option Award(3) 6/7/2021 — — — — — — — 9,939 400.25 875,030 Marianne D. Short Annual Cash Incentive Award(2) — 1,093,500 1,215,000 2,430,000 — — — — — — — Performance Share Award(3)(4) 6/7/2021 — — — 9 5,622 11,244 — — — 2,250,206 RSU Award(3) 6/7/2021 — — — — — — 2,811 — — 1,125,103 Stock Option Award(3) 6/7/2021 — — — — — — — 12,779 400.25 1,125,063 David S. Wichmann Annual Cash Incentive Award Mr. Wichmann was not granted any incentive awards in 2021. Performance Share Award RSU Award Stock Option Award Estimated Future Payouts
Under Non-Equity Incentive
Plan AwardsEstimated Future Payouts
Under Equity Incentive
Plan AwardsAll Other
Stock
Awards:
Number
of Shares
of StockAll Other
Option
Awards:
Number of
Securities
UnderlyingExercise
or Grant
Price of
OptionGrant Date
Fair Value
of Stock
or Option Grant
DateThreshold
($)Target
($)Maximum
($)Threshold
(#)Target
(#)Maximum
(#)or Units
(#)Options
(#)Awards
($/Sh)Awards
($)(1) 2/13/2018 — — — 46 19,856 39,712 — — — 4,500,164 2/13/2018 — — — — — — 9,928 — — 2,250,082 2/13/2018 — — — — — — — 53,042 226.64 2,250,042 — 2,340,000 2,600,000 5,200,000 — — — — — — — 2/13/2018 — — — 57 24,489 48,978 — — — 5,550,187 2/13/2018 — — — — — — 12,245 — — 2,775,207 2/13/2018 — — — — — — — 65,418 226.64 2,775,032 — 1,350,000 1,500,000 3,000,000 — — — — — — — 2/13/2018 — — — 26 11,031 22,062 — — — 2,500,066 2/13/2018 — — — — — — 5,516 — — 1,250,146 2/13/2018 — — — — — — — 29,468 226.64 1,250,033 — 1,980,000 2,200,000 4,400,000 — — — — — — — 6/5/2018 — — — 40 17,183 34,366 — — — 4,200,041 6/5/2018 — — — — — — 8,592 — — 2,100,143 6/5/2018 — — — — — — 40,912 — — 10,000,120 6/5/2018 — — — — — — — 47,096 244.43 2,100,011 — 1,800,000 2,000,000 4,000,000 — — — — — — — 2/13/2018 — — — 34 14,892 29,784 — — — 3,375,123 2/13/2018 — — — — — — 7,446 — — 1,687,561 2/13/2018 — — — — — — — 39,781 226.64 1,687,510 *"Compensation“Compensation Discussion and Analysis"Analysis” above for a description of our executive compensation program necessary for an understanding of the information disclosed in this table.(1)(1)The actual value to be realized by a named executive officer depends upon the appreciation in value of the Company'sCompany’s stock and the length of time the award is held. No value will be realized with respect to any stock option award if the Company'sCompany’s stock price does not increase following the grant date. For a description of the assumptions used in computing grant date fair value for stock option awards pursuant to FASB ASC Topic 718, see Note 11 to the Consolidated Financial Statements included in the Company'sCompany’s Annual Report on Form 10-K for the year ended December 31, 2018.2021. The grant date fair value of each RSU award and targeted grant date value of each performance share award were computed in accordance with FASB ASC Topic 718 based on the closing stock price on the grant date. Under the 20112020 Stock Incentive Plan, all equity-based compensation awards are subject to one year minimum vesting and exercisability requirements, subject to an exception for a limited number of shares not to exceed 5%. Equity-based compensation awards to employees are generally subject to three or four year vesting provisions. For additional information on vesting of 2021 Grants of Plan-Based Awards, see footnote 3 below. 2022 Proxy Statement | 2021 Grants of Plan-Based Awards 51 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information (2)(2)Amounts represent estimated payouts of annual cash incentive awards granted under our Executive Incentive Plan in 2018.2021. The Executive Incentive Plan permits a maximum annual bonus pool for executive officers equal to 2% of the Company'sCompany’s net income (as defined in the plan) and no executive officer may receive more than 25% of such annual bonus pool. The Compensation and Human Resources Committee has generally limited annual cash incentive payouts to not more than two times the target amount, and the maximum amounts shown for each named 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationofficer'sofficer’s target amount. In order for any amount to be paid, the Company must achieve approved performance measures of (i) revenue, (ii) operating income, (iii) cash flow, (iv) net promoter score,NPS, and (v) employee engagement and (vi) employee teamwork.experience index. The estimated threshold award represents the amount that may be paid if threshold performance is achieved on each of the performance measures. Once threshold performance is achieved on an approved performance measure, the Compensation and Human Resources Committee has the discretion to pay an award. The actual annual cash incentive amounts earned in connection with the 20182021 awards are reported in the 20182021 Summary Compensation Table.(3)Amounts represent grants under the 20112020 Stock Incentive Plan withPlan. Please refer to the chart on page 42 for a summary of our equity award types, vesting terms set forth below. In addition, theand termination provisions. RSUs are eligible to receive dividend equivalents, which are subject to the same terms as the RSUs and will be forfeited if the underlying RSUs do not vest. No dividend equivalents are paid on performance shares.Award Type and Vesting Terms(4)Termination ProvisionsPerformance Share Award (3-year performance period with cliff vesting) •Unvested performance share awards will vest if, within two years of a change in control, an executive terminates employment for Good Reason or is terminated without Cause (i.e., "double trigger" vesting). The number of performance awards that vest will be dependent upon the performance vesting criteria that have been satisfied.•If the executive officer is retirement-eligible, upon retirement, the number of performance shares that are earned at the end of the performance period based on actual performance, if any, will vest as if the executive officer had been continuously employed throughout the entire performance period, provided the executive officer had served for at least one year of the performance period.•Upon death, disability or termination of employment for Good Reason or other than for Cause (as these terms are defined in the award agreement), the executive officer will receive at the end of the applicable performance period, a pro rata number of performance shares that are earned, if any, based on the number of full months employed plus, if applicable, the number of months for any severance period. RSU Award(4-year ratable vesting*) •Unless the executive officer is retirement-eligible, award is subject to earlier termination upon certain events related to termination of employment.and •Unvested award will vest in full upon death or disability.Stock Option Award(4-year ratable vesting) •Unvested award will vest in full if, within two years of a change in control, an executive terminates employment for Good Reason or is terminated without Cause (i.e., "double trigger" vesting), as these terms are defined in the award agreement. *Except as provided in footnote 4 to the Outstanding Equity Awards at 2018 Fiscal Year-End table with respect to Messrs. Hemsley, Wichmann, and Nelson. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformation(4)20112020 Stock Incentive Plan at each of the threshold, target and maximum levels. The performance share award will be paid out in shares of Company common stock. The number of performance shares that the executive officer will receive will be determined at the conclusion of the 2018-20202021-2023 performance period and will be dependent upon the Company'sCompany’s achievement of a cumulative AEPS measure and an average ROE measure approved by the Compensation and Human Resources Committee. The Compensation and Human Resources Committee has the discretion to reduce the number of performance shares an executive officer is entitled to receive. The estimated threshold award represents the number of performance shares that may be awarded if threshold performance is achieved on one of the performance measures.(5)Represents a grant made to Mr. Witty in connection with his appointment as Chief Executive Officer, Optum. These RSUs vest ratably over 5 years. Compensation paid in connection with Mr. Witty's service as a director, from the beginning of the fiscal year through March 13, 2018, is reported in the Director Compensation Table.
2022 Proxy Statement | 2021 Grants of Plan-Based Awards 1
DirectorsCorporate
GovernanceExecutive
CompensationAuditAudit55 Annual
MeetingOther
Information The following table presents information regarding outstanding equity awards held at the end of fiscal year 20182021 by our named executive officers.Name Option Awards Stock Awards Date of
Option
Grant Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable Option
Exercise/
Grant
Price ($) Option
Expiration
Date(1) Stock
Award
Grant Date Number
of
Shares or
Units of
Stock
That
Have Not
Vested (#) Market
Value of
Shares or
Units of
Stock
That Have
Not Vested
($)(2) Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares or
Units That
Have Not
Vested (#) Equity
Incentive
Plan
Awards:
Market
Value of
Unearned
Shares or
Units That
Have Not
Vested ($)(2) Andrew Witty 2/22/2021 — 51,325(3) 327.64 2/22/2031 2/22/2021 11,119(3) 5,583,295 — — 2/13/2020 12,704 38,113(3) 302.20 2/13/2030 6/7/2021 — — 17,958(5) 9,017,430 11/6/2019 8,922 8,923(3) 250.52 11/6/2029 2/13/2020 6,845(3) 3,437,148 — — 2/26/2019 12,693 25,385(3) 262.98 2/26/2029 2/13/2020 — — 17,704(5) 8,889,887 6/5/2018 11,774 11,774(3) 244.43 6/5/2028 11/6/2019 1,549(3) 777,815 — — — — — — — 2/26/2019 4,733(3) 2,376,629 — — — — — — — 6/5/2018 2,275(3) 1,142,369 — — — — — — — 6/5/2018 17,329(6) 8,701,584 — — John F. Rex 2/22/2021 — 40,703(3) 327.64 2/22/2031 2/22/2021 8,818(3) 4,427,871 — — 2/13/2020 10,686 32,058(3) 302.20 2/13/2030 6/7/2021 — — 14,242(5) 7,151,478 2/26/2019 18,705 18,705(3) 262.98 2/26/2029 2/13/2020 5,759(3) 2,891,824 — — 2/13/2018 22,101 7,367(3) 226.64 2/13/2028 2/13/2020 — — 14,891(5) 7,477,367 2/8/2017 43,561 — 160.31 2/8/2027 2/26/2019 3,488(3) 1,751,464 — — 6/7/2016 56,416 — 136.94 6/7/2026 2/13/2018 1,465(3) 735,635 — — 2/9/2016 31,623 — 111.16 2/9/2026 — — — — — 2/10/2015 25,504 — 108.97 2/10/2025 — — — — — 2/12/2014 44,757 — 70.24 2/12/2024 — — — — — Dirk C. McMahon 2/22/2021 — 40,703(3) 327.64 2/22/2031 2/22/2021 8,437(4) 4,236,555 — — 2/13/2020 10,686 32,058(3) 302.20 2/13/2030 6/7/2021 — — 14,242(5) 7,151,478 2/26/2019 14,696 14,697(3) 262.98 2/26/2029 2/13/2020 5,759(4) 2,891,824 — — 2/13/2018 24,310 8,104(3) 226.64 2/13/2028 2/13/2020 — — 14,891(5) 7,477,367 2/8/2017 39,205 — 160.31 2/8/2027 2/26/2019 2,741(4) 1,376,366 — — 2/9/2016 56,921 — 111.16 2/9/2026 2/13/2018 1,612(4) 809,450 — — 2/10/2015 11,643 — 108.97 2/10/2025 — — — — — Brian R. Thompson 6/7/2021 — 9,939(3) 400.25 6/7/2031 6/7/2021 2,209(3) 1,109,227 — — 2/22/2021 — 18,745(3) 327.64 2/22/2031 6/7/2021 — — 6,559(5) 3,293,536 2/13/2020 5,936 17,811(3) 302.20 2/13/2030 2/22/2021 4,061(3) 2,039,191 — — 8/12/2019 6,504 6,504(3) 243.20 8/12/2029 2/13/2020 3,199(3) 1,606,346 — — 2/26/2019 10,688 10,689(3) 262.98 2/26/2029 2/13/2020 — — 8,273(5) 4,154,204 2/13/2018 13,260 4,421(3) 226.64 2/13/2028 8/12/2019 1,069(3) 536,788 — — 2/8/2017 6,535 — 160.31 2/8/2027 2/26/2019 1,993(3) 1,000,765 — — — — — — — 2/13/2018 880(3) 441,883 — — Marianne D. Short 6/7/2021 — 12,779(3) 400.25 6/7/2031 6/7/2021 2,717(4) 1,364,314 — — 2/13/2020 10,686 32,058(3) 302.20 2/13/2030 6/7/2021 — — 5,622(5) 2,823,031 2/26/2019 12,024 12,025(3) 262.98 2/26/2029 2/13/2020 5,759(4) 2,891,824 — — 2/13/2018 17,680 5,894(3) 226.64 2/13/2028 2/26/2019 2,242(4) 1,125,798 — — 2/8/2017 31,539 — 160.31 2/8/2027 2/13/2018 1,173(4) 589,010 — — David S. Wichmann 2/13/2020 — 45,594(3) 302.20 3/31/2026 2/13/2020 8,190(4) 4,112,527 — — 2/26/2019 — 34,203(3) 262.98 3/31/2026 2/13/2020 — — 21,179(5) 10,634,823 2/13/2018 — 16,355(3) 226.64 3/31/2026 2/26/2019 6,377(4) 3,202,147 — — — — — — — 2/13/2018 3,253(4) 1,633,461 — — 2022 Proxy Statement | Outstanding Equity Awards at 2021 Fiscal Year-End 53 Option/SAR Awards Stock Awards Date of
Option/
SAR
GrantNumber of
Securities
Underlying
Unexercised
Options/
SARs (#)
ExercisableNumber of
Securities
Underlying
Unexercised
Options/
SARs (#)
UnexercisableOption/
SAR
Exercise/
Grant
Price ($)Option/
SAR
Expiration
Date(1) Stock
Award
Grant DateNumber
of
Shares or
Units of
Stock
That
Have Not
Vested (#)Market
Value of
Shares or
Units of
Stock
That Have
Not Vested
($)(2)Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares or
Units That
Have Not
Vested (#)Equity
Incentive
Plan
Awards:
Market
Value of
Unearned
Shares or
Units That
Have Not
Vested ($)(2) 2/13/2018 — 53,042 (3) 226.64 2/13/2028 2/13/2018 9,629 (4) 2,398,776 — — 2/8/2017 24,176 72,530 (3) 160.31 2/8/2027 2/13/2018 — — 19,856 (5) 4,946,527 2/9/2016 59,135 59,135 (3) 111.16 2/9/2026 2/8/2017 13,361 (4) 3,328,492 — — 2/10/2015 77,758 25,920 (3) 108.97 2/10/2025 2/8/2017 — — 34,621 (5) 8,624,784 2/12/2014 83,918 — 70.24 2/12/2024 2/9/2016 11,004 (4) 2,741,316 — — 2/6/2013 99,312 — 57.38 2/6/2023 2/10/2015 5,701 (4) 1,420,233 — — 2/9/2010 114,036 — 33.00 2/9/2020 — — — — — 2/13/2018 — 65,418 (3) 226.64 2/13/2028 2/13/2018 11,877 (4) 2,958,798 — — 8/15/2017 7,507 22,524 (3) 194.50 8/15/2027 2/13/2018 — — 24,489 (5) 6,100,700 2/8/2017 15,932 47,798 (3) 160.31 2/8/2027 8/15/2017 3,727 (4) 928,470 — — 2/9/2016 41,742 41,743 (3) 111.16 2/9/2026 8/15/2017 — — 9,731 (5) 2,424,187 2/10/2015 54,888 18,297 (3) 108.97 2/10/2025 2/8/2017 8,804 (4) 2,193,252 — — 2/12/2014 50,351 — 70.24 2/12/2024 2/8/2017 — — 22,816 (5) 5,683,922 2/6/2013 59,587 — 57.38 2/6/2023 2/9/2016 7,767 (4) 1,934,915 — — 2/9/2010 76,024 — 33.00 2/9/2020 2/10/2015 4,024 (4) 1,002,459 — — 2/23/2009 113,122 — 29.74 2/23/2019 — — — — — 2/13/2018 — 29,468 (3) 226.64 2/13/2028 2/13/2018 5,592 (4) 1,393,079 — — 2/8/2017 10,890 32,671 (3) 160.31 2/8/2027 2/13/2018 — — 11,031 (5) 2,748,043 6/7/2016 28,208 28,208 (3) 136.94 6/7/2026 2/8/2017 6,019 (4) 1,499,453 — — 2/9/2016 15,811 15,812 (3) 111.16 2/9/2026 2/8/2017 15,595 (5) 3,885,026 2/10/2015 19,128 6,376 (3) 108.97 2/10/2025 6/7/2016 4,759 (4) 1,185,562 — — 2/12/2014 44,757 — 70.24 2/12/2024 2/9/2016 2,943 (4) 733,160 — — 2/6/2013 52,972 — 57.38 2/6/2023 2/10/2015 1,403 (4) 349,515 — — 6/5/2012 80,000 — 56.04 6/5/2022 — — — — — 6/5/2018 — 47,096 (3) 244.43 6/5/2028 6/5/2018 8,681 (4) 2,162,611 — — — — — — — 6/5/2018 — — 17,183 (5) 4,280,629 — — — — — 6/5/2018 41,336 (6) 10,297,624 — — 2/13/2018 — 39,781 (3) 226.64 2/13/2028 2/13/2018 7,222 (4) 1,799,145 — — 2/8/2017 — 27,444 (3) 160.31 2/8/2027 2/13/2018 — — 14,892 (5) 3,709,895 2/9/2016 — 20,872 (3) 111.16 2/9/2026 2/8/2017 5,056 (4) 1,259,551 — — 2/10/2015 — 8,594 (3) 108.97 2/10/2025 2/8/2017 — — 13,100 (5) 3,263,472 — — — — — 2/9/2016 3,883 (4) 967,333 — — — — — — — 2/10/2015 1,891 (4) 471,086 — — 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information (1)The expiration date shown is the latest date that stock options/SARsoptions may be exercised. Stock options/SARsoptions may terminate earlier in certain circumstances, such as in connection with the named executive officer'sofficer’s termination of employment.(2)(2)Based on the per share closing market price of our common stock on December 31, 20182021 of $249.12.$502.14.(3)(3)Vest 25% annually over a four-year period beginning on the first anniversary of the grant date.(4)Table of Contents 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformation(4)officer'sofficer’s award that otherwise would have vested on the next specified vesting date is cancelled to pay applicable FICA taxes owed by the executive officer. The cancellation occurs in the year of grant if the executive officer is retirement eligible during that year or in the first year the executive officer becomes retirement eligible. The remainder of the award vests proportionally over the remaining vesting period. Messrs. Hemsley, WichmannMr. McMahon and NelsonMs. Short are retirement eligible. These RSUseligible while Mr. Wichmann’s equity grants are eligible to and did receive dividend equivalents converted into additional shares; accordingly, the number of shares shown has been rounded up to the nearest whole share. For more information on RSUs cancelled in 2018, please see the 2018 Option Exercises and Stock Vested table.for retirement treatment.(5)(5)Vest 100% at the end of the three-year performance period. The number of performance shares that the executive officer will receive is dependent upon the achievement of a cumulative EPS measure and an average ROE measure approved by the Compensation and Human Resources Committee. The number of performance shares reported above for grants made in 20182021 and 20172020 is at the target number established by the Compensation and Human Resources Committee because we currently believe that is the probable outcome of the performance conditions based on the Company'sCompany’s performance through December 31, 2018.2021.(6)(6)Vest 20% annually over a five-year period beginning on the first anniversary of the grant date.The following table presents information regarding the exercise of stock options during fiscal year 20182021 by our named executive officers and vesting of restricted stock awardsperformance shares and RSUs held by our named executive officers for fiscal year 2018.2021.Name Option Awards Stock Awards Number of
Shares
Acquired on
Exercise
(#) Value
Realized on
Exercise
($)(1) Number of
Shares
Acquired on
Vesting
(#) Value
Realized on
Vesting
($) Andrew Witty — — 48,418 22,442,929 John F. Rex 52,972 18,760,034 24,968 11,295,940 Dirk C. McMahon — — 20,769 9,315,737 Brian R. Thompson — — 14,871 6,694,048 Marianne D. Short 39,213 9,422,492 16,611 7,464,946 David S. Wichmann 458,832 110,411,515(2) 45,520 20,719,074 (1) Option Awards Stock Awards Number of
Shares
Acquired on
Exercise
(#)Value
Realized on
Exercise
($)(1) Number of
Shares
Acquired on
Vesting
(#)Value
Realized on
Vesting
($) 169,683 42,897,559 (2) 85,279 20,656,413 (3)(4)(5) — — 59,439 14,459,960 (3)(4)(5) — — 27,830 6,699,437 (3)(4) — — — — 38,249 6,087,629 (2) 30,555 7,402,019 (3)(4)(5) (1)(2)For Mr. Wichmann, the amount reflects option awards granted over an eight-year period from 2013-2020. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformation(2)The value was computed as described in footnote 1 above and was based on the following:Name Date of
Award Exercise
Date Number of
Options
Exercised Market Price
at Exercise Exercise
Price 2/23/2009 11/30/2018 169,683 $ 282.55 $ 29.74 2/12/2014 9/7/2018 10,071 $ 270.88 $ 70.24 2/10/2015 9/7/2018 8,594 $ 270.80 $ 108.97 2/9/2016 9/7/2018 10,436 $ 270.82 $ 111.16 2/8/2017 9/7/2018 9,148 $ 270.72 $ 160.31 (3)Reflects the vesting of a portion of the RSUs granted. The value realized on vesting was computed based on the following:Name Date of
Award Vesting
Date Number of
Shares Acquired
on Vesting Market Price
at Vesting Value Realized
on Vesting 2/12/2014 2/12/2018 7,113 $ 225.69 $ 1,605,287 2/10/2015 2/10/2018 5,624 $ 220.96 $ 1,242,603 2/9/2016 2/9/2018 5,427 $ 220.96 $ 1,199,120 2/8/2017 2/8/2018 3,595 $ 216.46 $ 778,201 2/12/2014 2/12/2018 4,075 $ 225.69 $ 919,615 2/10/2015 2/10/2018 3,609 $ 220.96 $ 797,400 2/9/2016 2/9/2018 3,310 $ 220.96 $ 731,272 2/8/2017 2/8/2018 2,370 $ 216.46 $ 512,946 8/15/2017 8/15/2018 1,009 $ 260.61 $ 263,056 2/12/2014 2/12/2018 3,794 $ 225.69 $ 856,281 2/10/2015 2/10/2018 1,383 $ 220.96 $ 305,611 2/9/2016 2/9/2018 1,451 $ 220.96 $ 320,708 6/7/2016 6/7/2018 2,354 $ 248.98 $ 586,182 2/8/2017 2/8/2018 1,978 $ 216.46 $ 428,250 2/12/2014 2/12/2018 3,258 $ 225.69 $ 735,384 2/10/2015 2/10/2018 1,694 $ 220.96 $ 374,245 2/9/2016 2/9/2018 1,653 $ 220.96 $ 365,240 2/8/2017 2/8/2018 1,357 $ 216.46 $ 293,830 (4)Also reflects the performance shares earned for the 2016-2018 performance period that ended on December 31, 2018 because performance targets were met. The value shown as realized on December 31, 2018 is based on the number of shares earned for the 2016-2018 performance period using the per share closing market price of our common stock on December 31, 2018, although shares were not issued until the Compensation Committee certified the performance results on February 26, 2019:Name Date of
Award Performance
Period
Completion Date Number of
Shares Acquired
on Vesting Market Price
at End of
Performance
Period Value Realized
on Vesting 2/9/2016 12/31/2018 63,086 $ 249.12 $ 15,715,984 2/9/2016 12/31/2018 44,531 $ 249.12 $ 11,093,563 2/9/2016 12/31/2018 16,869 $ 249.12 $ 4,202,405 2/9/2016 12/31/2018 22,266 $ 249.12 $ 5,546,906 (5)Reflects the cancellation on December 14, 2018 of RSUs for the payment of FICA tax liability. The value realized was computed based on a closing stock price of $265.02 on December 14, 2018.Name Date of
Award Vesting
Date Number of
Shares
Acquired
on Vesting Market Price
at Vesting Value Realized
on Vesting 2/13/2018 12/14/2018 435 $ 265.02 $ 115,218 2/13/2018 12/14/2018 536 $ 265.02 $ 142,108 2/13/2018 12/14/2018 326 $ 265.02 $ 86,414 (6)For information regarding DSUs held by Mr. Witty in connection with this service as a director, please see the Director Compensation Table. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationThe following table presents information regarding the present value of accumulated benefits payable under our non-qualified defined-benefit pension plans covering our named executive officers for fiscal year 2018. 2022 Proxy Statement | 2021 Option Exercises and Stock Vested NamePlan NameNumber ofYearsCreditedService (#)PresentValue ofAccumulatedBenefit ($)PaymentsDuring LastFiscal Year($)54 Stephen J. HemsleyIndividual Agreement for Supplemental Executive Retirement Pay1 —(1)Board ofDirectors20,459,928(1)— David S. WichmannN/A— —2 Corporate
Governance — 3 John F. RexExecutiveN/A—
Compensation —4 Audit —5 Annual
Meeting Andrew P. WittyN/A6 ——— Steven H. NelsonOtherN/A———
Information (1)In 2006, the amount of Mr. Hemsley's supplemental retirement benefit was frozen based on his age and average base salary at the time and converted into a lump sum of $10,703,229. On June 7, 2016, the Company amended Mr. Hemsley's SERP to convert the $10,703,229 cash benefit into a number of DSUs based on the average closing price of the Company's common stock over the preceding five trading days from the date of conversion ($135.846), which resulted in 78,789 DSUs issued on June 7, 2016. The DSUs held in the SERP are eligible to receive dividend equivalents in the form of additional DSUs, which are paid at the same rate and at the same time that dividends are paid to the Company's shareholders. During 2018, Mr. Hemsley received dividend equivalents equal to 1,110 DSUs, which were added to the SERP. As of December 31, 2018, the amount of the benefit to which Mr. Hemsley is entitled is 82,129 DSUs, which had a value of $20,459,928 as of December 31, 2018. The SERP balance will be paid six months and one day after termination of his employment for any reason. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationThe following table presents information as of the end of 20182021 regarding the non-qualified deferred compensation arrangements for our named executive officers for fiscal year 2018.2021.Name (a) Executive
Contributions
in Last FY
($)(1)(2)
(b) Registrant
Contributions
in Last FY
($)(1)(3)
(c) Aggregate
Earnings
in Last FY
($)(4)
(d) Aggregate
Withdrawals/
Distributions
($)(5)
(e) Aggregate
Balance at
Last FYE
($)(6)
(f) Andrew Witty — — — — — John F. Rex — — 491,483 — 2,677,037 Dirk C. McMahon 150,000 — 331,681 — 2,421,380 Brian R. Thompson — — 177,671 — 1,357,756 Marianne D. Short — — 180,017 — 2,421,859 David S. Wichmann 233,585 — 3,926,597 — 17,674,674 (1) Executive
Contributions
in Last FY
($)(1)(2)
(b)Registrant
Contributions
in Last FY
($)(1)(3)
(c)Aggregate
Earnings
in Last FY
($)(4)
(d)Aggregate
Withdrawals/
Distributions
($)(5)
(e)Aggregate
Balance at
Last FYE
($)(6)
(f) 360,000 180,000 (683,465 ) — 14,463,891 372,588 166,500 (373,466 ) — 7,765,073 178,615 89,308 (81,393 ) — 994,602 — — — — — — — — — — (1)20182021 Summary Compensation Table.(2)(2)Named executive officers are eligible to participate in our Executive Savings Plan, which is a non-qualified deferred compensation plan. Under the plan, employees may generally defer up to 80% of their eligible annual base salary (100% prior to January 1, 2007) and up to 100% of their annual and long-term cash incentive awards. Amounts deferred, including Company credits, are credited to a bookkeeping account maintained for each participant, and are distributable pursuant to an election made by the participant as to time and form of payment that is made prior to the time of deferral. The Company maintains a Rabbi Trust for the plan. The Company'sCompany’s practice is to set aside amounts in the Rabbi Trust to be used to pay for all benefits under the plan, but the Company is under no obligation to do so except in the event of a change in control.(3)(3)For amounts deferred prior to 2020, for the first 6% of the employee'semployee’s base salary and annual incentive award deferrals under our Executive Savings Plan, the Company providesprovided a matching credit of up to 50% of amounts deferred at the time of each deferral. ThisCompany matching credit does not apply to deferrals of long-term cash incentive awards or other special incentive awards.credits were discontinued in 2019.(4)(4)Amounts deferred are credited with earnings from measuring investments selected by the employee from a predetermined collection of unaffiliated mutual funds identified by the Company. The Executive Savings Plan does not credit above market earnings or preferential earnings to amounts deferred. The returns on the mutual funds available to employees during 2018 ranged from –14.91% to 1.75%, with a median return of –6.18% for the year ended December 31, 2018. Employees may change their selection of measuring investments on a daily basis.(5)(5)Under our Executive Savings Plan, unless an employee in the plan elects to receive distributions during the term of his or her employment with the Company, benefits will be paid no earlier than at the beginning of the year following the employee'semployee’s termination. However, upon a showing of severe financial hardship, an employee may be allowed to access funds in his or her deferred compensation account earlier. Benefits can be received either as a lump sum payment, in five or ten annual installments, in pre-selected amounts and on pre-selected dates or a combination thereof. An employee may change his or her election with respect to the timing and form of distribution for such deferrals under certain conditions. However, for deferrals relating to services performed on or after January 1, 2004, employees may not accelerate the timing of the distributions.
2022 Proxy Statement | 2021 Non-Qualified Deferred Compensation 1
DirectorsCorporate
GovernanceExecutive
CompensationAuditAudit55 Annual
MeetingOther
Information (6)(6)columnscolumn (b) and (c) as well as the following amounts reported in the summary compensation table for prior years:Name Amount
Previously
Reported Andrew Witty — John F. Rex 1,100,203 Dirk C. McMahon 420,000 Brian R. Thompson — Marianne D. Short 1,670,620 David S. Wichmann 4,783,867 Name Amount
Previously
Reported $ 8,685,064 $ 3,257,315 $ 412,280 — — We have entered into an employment agreement with each of the named executive officers. The following is a summary of the material terms of those agreements.Stephen J. HemsleyOn November 7, 2006, the Board of Directors entered into an employment agreement with Mr. Hemsley. On December 14, 2010, the employment agreement was amended to extend the employment period to December 1, 2014. The employment agreement extends automatically for additional one-year periods after December 1, 2014, unless sooner terminated in accordance with its terms. During the period of his employment, the Board of Directors will nominate Mr. Hemsley for election to the Board of Directors by the shareholders of the Company.Summary of Compensation ComponentsUnder his employment agreement, any increases to Mr. Hemsley's base salary are at the sole discretion of the Compensation Committee and ultimately the independent members of the Board of Directors. Mr. Hemsley's employment agreement does not set any minimum or target level for any bonus or other incentive compensation. All bonus and incentive compensation awards are solely at the discretion of the Compensation Committee. Mr. Hemsley is eligible to participate in the Company's generally available employee benefit programs.Termination ProvisionsUpon termination of Mr. Hemsley's employment for any reason, he is entitled to a supplemental retirement benefit, payable in common stock upon settlement of DSUs, which will be paid six months and one day after his termination. See "Compensation Discussion and Analysis — Other Compensation — Supplemental Retirement Benefits" and "2018 Pension Benefits" for more information.If Mr. Hemsley's employment is terminated by the Company without Cause, other than upon expiration of the term of the employment agreement, or by Mr. Hemsley for Good Reason, the Company will pay Mr. Hemsley a lump sum in an amount equal to his annual base salary for 12 months.If Mr. Hemsley's employment is terminated because of his death or permanent disability, the Company will pay him or his beneficiaries a lump sum in an amount equal to two years total compensation of base salary plus the average bonus for the last two calendar years, excluding any special or one-time bonus or incentive compensation payments. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationIf Mr. Hemsley's employment is terminated by the Company for Cause, by Mr. Hemsley without Good Reason or because of his retirement or upon expiration of the term of the employment agreement, he will not be entitled to any further compensation from the Company other than earned but unpaid salary and benefits.Material DefinitionsAs defined in the employment agreement, "Cause" generally means (a) willful and continued failure to perform his duties after written notice and a failure to remedy the deficiency, (b) a violation of the Company's Code of Conduct that is materially detrimental to the Company and is not remedied after written notice, (c) engaging in fraud, material dishonesty or gross misconduct in connection with the Company's business, (d) conviction of a felony, or (e) willful and material breach of the employment agreement that is not remedied after written notice.As defined in the employment agreement, "Good Reason" generally means (a) an assignment of duties inconsistent with his position or duties or other diminution of duties, (b) a relocation of primary work location by more than 25 miles, (c) failure by the Board of Directors to nominate Mr. Hemsley to serve on the Board of Directors, (d) the Company's failure to pay or provide Mr. Hemsley's base salary, incentive compensation or other benefits, or (e) any other material breach of Mr. Hemsley's employment agreement that is not remedied.Non-Solicitation, Non-Competition and Confidentiality ProvisionsPursuant to the employment agreement, Mr. Hemsley is subject to provisions prohibiting his solicitation of the Company's employees and customers or competing with the Company during the term of the employment agreement and the longer of two years following termination or the period that severance payments are made to him under the employment agreement. In addition, he is prohibited at all times from disclosing confidential information related to the Company.David S. WichmannOn December 1, 2006, the Company entered into an employment agreement with Mr. Wichmann. On August 16, 2017, the employment agreement was amended to reflect Mr. Wichmann serving as CEO.Summary of Compensation ComponentsUnder his employment agreement, any adjustments to Mr. Wichmann's base salary are at the sole discretion of the Compensation Committee and ultimately the independent members of the Board of Directors. Mr. Wichmann's employment agreement does not set any minimum or target level for any bonus or other incentive compensation. All bonus and incentive compensation awards are solely at the discretion of the Compensation Committee. Mr. Wichmann is eligible to participate in the Company's generally available employee benefit programs. In addition, the Company provides Mr. Wichmann with a $2 million term life insurance policy and additional long-term disability coverage, which covers 60% of eligible base salary subject to the terms of the policy. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationTermination ProvisionsIf Mr. Wichmann's employment is terminated by the Company without Cause, or by Mr. Wichmann for Good Reason, the Company will provide Mr. Wichmann with outplacement services and will pay Mr. Wichmann severance compensation equal to the sum of (a) 200% of his annualized base salary as of his termination date, (b) 200% of the average of his last two calendar year bonuses, excluding any equity awards and any special or one-time bonus or incentive compensation payments, and (c) $12,000 to offset the costs of benefit continuation coverage. The severance compensation will be payable over a 24-month period.If Mr. Wichmann's employment is terminated because of his death or disability, by the Company for Cause, or by Mr. Wichmann without Good Reason, he will not be entitled to any further compensation from the Company other than earned but unpaid salary and benefits.Material DefinitionsAs defined in the employment agreement, "Cause" means (a) material failure to follow the Company's reasonable direction, or to perform any duties reasonably required on material matters; (b) material violation of, or failure to act upon or report known or suspected violations of, the Company's Code of Conduct; (c) conviction of any felony, commission of any criminal, fraudulent or dishonest act, or any conduct that is materially detrimental to the Company's interests, or (d) material breach of the employment agreement. The Company must provide Mr. Wichmann with written notice of Cause within 120 days of discovery, and Mr. Wichmann will have 60 days to remedy the conduct, if the conduct is reasonably capable of being remedied.As defined in the employment agreement, "Good Reason" exists if the Company (a) reduces Mr. Wichmann's base salary or long- or short-term target bonus percentage other than in connection with a general reduction affecting a group of similarly situated employees, (b) moves Mr. Wichmann's primary work location more than 50 miles, (c) makes changes that substantially diminish Mr. Wichmann's duties or responsibilities, or (d) changes Mr. Wichmann's reporting relationship.Non-Solicitation, Non-Competition and Confidentiality ProvisionsPursuant to the employment agreement, Mr. Wichmann is subject to provisions prohibiting his solicitation of the Company's employees and customers or competing with the Company during the term of the employment agreement and for two years following termination of his employment for any reason. In addition, he is prohibited at all times from disclosing confidential information related to the Company.John F. Rex, Andrew P. Witty and Steven H. NelsonMessrs. Rex, Witty and Nelson have entered into employment agreements with the Company. Under those agreements, each reports to the CEO of the Company. The table below and the narrative that follows summarize the material terms of their respective employment agreements. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformation Compensation Component Andrew
Witty John F.
Rex Compensation ComponentDirk C.
McMahonJohn F. RexAndrew P. WittySteven H. Nelson Brian R.
Thompson Marianne D.
Short Base salary(1) Base salary(1) ✓ ✓ ✓ ✓ ✓ Participation in incentive compensation plans(1) ✓ ✓ ✓ ✓ ✓ ✓ Stock-based awards(1) ✓ ✓ ✓ ✓ $2 million term life insurance policy(2) ✓ ✓ ✓ ✓ ✓ Long-term disability policy(2)(3) ✓ One-time sign-on / promotion equity award and / or bonus ✓ ✓ ✓ ✓ Generally available employee benefit programs ✓ ✓ ✓ ✓ ✓ Any adjustments to base salary, actual bonuses payable and stock-based awards are at the discretion of the Compensation and Human Resources Committee.(2)(2)Benefit provided at the Company'sCompany’s expense.(3)(3)Annual benefit covers 60% of eligible base salary in the event of a qualifying long-term disability, subject to the terms of the policy.Termination Provisions and Material DefinitionsEach employment agreement and each executive officer'sofficer’s employment may be terminated (a) by mutual agreement, (b) by the Company with or without Cause, (c) by the executive officer, and (d) upon the executive officer'sofficer’s death or disability that renders him or her incapable of performing the essential functions of his or her job, with or without reasonable accommodation. Each executive officer may also terminate his or her employment agreement and employment at any time for Good Reason. If the executive officer'sofficer’s employment is terminated by the Company without Cause or by the executive officer for Good Reason, the Company will provide the executive officer with outplacement services consistent with those provided to similarly situated executives and pay the executive officer severance compensation equal to the sum of (a) 200% of his or her annualized base salary as of his or her termination date, (b) 200% of the average of his or her last two calendar year bonuses, or if termination occurs within two years from the start of employment with the Company, 200% of his or her target incentive, excluding any equity awards and any special or one-time bonus or incentive compensation payments, and (c) $12,000 to offset the costs of benefit continuation coverage. The severance compensation will be payable over a 24-month period. In addition, if the Company terminates Mr. Rex'sRex’s employment 2022 Proxy Statement | Executive Employment Agreements 56 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information without Cause, or if Mr. Rex terminates employment for Good Reason, Mr. Rex has the option to remain employed in an advisory capacity for one year (at his then-current annual base salary and target bonus) following notification of termination.
Material DefinitionsTableAs defined in each executive officer’s employment agreement, “Cause” means (a) material failure to follow the Company’s reasonable direction, or to perform any duties reasonably required on material matters; (b) material violation of, Contents 1Boardor failure to act upon or report known or suspected violations of, the Company’s Code of Conduct; (c) conviction of any felony, commission of any criminal, fraudulent or dishonest act, or any conduct that is materially detrimental to the Company’s interests, or (d) material breach ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationApplicable definitions for the employment agreements follow.agreement. The Company must provide the executive office with written notice of Cause within 120 days of discovery, and the executive will have 60 days to remedy the conduct, if the conduct is reasonably capable of being remedied. TermDefinition CauseMeans: •Material failure to follow the Company's reasonable direction or to perform any duties reasonably required on material matters; •A material violation of, or failure to act upon known or suspected violations of, the Company's Code of Conduct; •Conviction of any felony, commission of any criminal, fraudulent or dishonest act, or any conduct that is materially detrimental to the Company's interests; or •Material breach of the employment agreement.The Company must provide the executive officer with written notice of Cause within 120 days of discovery, and the executive officer will have 60 days to remedy the conduct, if the conduct is reasonably capable of being remedied. Good ReasonExists if the Company: •Reduces the executive officer's base salary or long- or short-term target bonus percentage other than in connection with a general reduction affecting a group of similarly situated employees; •Moves the executive officer's primary work location more than 50 miles; or •Makes changes that substantially diminish the executive officer's duties or responsibilities.*The executive officer must give the Company written notice of the circumstances constituting Good Reason within 120 days of becoming aware of the circumstances, and the Company will have 60 days to remedy the circumstances.
circumstances constituting Good Reason within 120 days of discovery, and the Company will have 60 days to remedy the circumstances, if they are reasonably capable of being remedied.*Nelson, "Good Reason"McMahon and Ms. Short, “Good Reason” also exists if the Company changes eitherthe executive officer'sofficer’s reporting relationship, and forrelationship. For Mr. Rex, "Good Reason"“Good Reason” also exists if the Company makes a change so that hechanges resulting in Mr. Rex no longer servesserving as both CFOChief Financial Officer of the Company and as a member of the Office of the CEOChief Executive Officer. The executive officer must provide the Company with written notice of the Company.Non-Solicitation, Non-Competition and Confidentiality ProvisionsPursuant to their respective employment agreements, eachEach executive officer is subject to provisions prohibiting his or her solicitation of the Company'sCompany’s employees and customers or competing with the Company during the term of the employment agreement and for two years following termination of employment for any reason. In addition, each executive officer is prohibited at all times from disclosing Company confidential information related toinformation.Please see the Company.ContentsMr. Wichmann’s employment agreement. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationThe following table describes the potential payments to named executive officers upon termination of employment or a change in control of the Company as of December 31, 2018.2021, except for Mr. Wichmann because he was not employed by the Company as of December 31, 2021. Please see the Summary Compensation Table for a description of the payments to which Mr. Wichmann was entitled pursuant to the terms of his employment agreement. Amounts are calculated based on the benefits available to the named executive officers under existing plans and arrangements, including each of their employment agreements described under "Executive“Executive Employment Agreements."Agreements” and “2021 Summary Compensation Table.” 2022 Proxy Statement | Potential Payments Upon Termination or Change in Control 57 For Good Reason
or Not For Cause
($)Death
($)Disability
($)Retirement
($)Change
In Control
($) 1,000,000 11,000,000 11,000,000 — — — — — — — 20,459,928 20,459,928 20,459,928 20,459,928 20,459,928 — — 420,000 — — 42,884,671 36,712,225 36,712,225 42,884,671 42,884,671 64,344,599 68,172,153 68,592,153 63,344,599 63,344,599 10,612,000 — — — — — 5,200,000 5,200,000 5,200,000 — — 2,000,000 780,000 — — 38,495,661 31,726,074 31,726,074 38,495,661 38,495,661 49,107,661 38,926,074 37,706,074 43,695,661 38,495,661 5,412,000 — — — — — 3,000,000 3,000,000 3,000,000 — — 2,000,000 600,000 — — 19,102,186 18,469,874 18,469,874 — 21,596,828 24,514,186 23,469,874 22,069,874 3,000,000 21,596,828 6,612,000 — — — — — 4,400,000 4,400,000 4,400,000 — — 2,000,000 660,000 — — 9,591,432 14,108,092 14,108,092 — 16,961,762 16,203,432 20,508,092 19,168,092 4,400,000 16,961,762 5,712,000 — — — — — 4,000,000 4,000,000 4,000,000 — — 2,000,000 600,000 — — 18,886,001 15,325,080 15,325,080 18,886,001 18,886,001 24,598,001 21,325,080 19,925,080 22,886,001 18,886,001 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information Name For Good Reason
or Not For Cause
($) Death
($) Disability
($) Retirement
($) Change
In Control
($) Andrew Witty Cash Payments 7,232,000 — — — — Annual Cash Incentive(1) — 6,000,000 6,000,000 6,000,000 — Insurance Benefits — 2,000,000 900,000 — — Continued Equity Vesting(2) 56,897,821 58,878,493 58,878,493 — 67,853,241 Total(3) 64,129,821 66,878,493 65,778,493 6,000,000 67,853,241 John F. Rex Cash Payments 7,412,000 — — — — Annual Cash Incentive(1) — 4,800,000 4,800,000 4,800,000 — Insurance Benefits — 2,000,000 720,000 — — Continued Equity Vesting(2) 35,585,400 37,191,647 37,191,647 — 44,451,085 Total(3) 42,997,400 43,991,647 42,711,647 4,800,000 44,451,085 Dirk C. McMahon Cash Payments 7,412,000 — — — — Annual Cash Incentive(1) — 4,800,000 4,800,000 4,800,000 — Insurance Benefits — 2,000,000 720,000 — — Continued Equity Vesting(2) 43,202,976 35,943,538 35,943,538 43,202,976 43,202,976 Total(3) 50,614,976 42,743,538 41,463,538 48,002,976 43,202,976 Brian R. Thompson Cash Payments 4,612,000 — — — — Annual Cash Incentive(1) — 4,000,000 4,000,000 4,000,000 — Insurance Benefits — 2,000,000 600,000 — — Continued Equity Vesting(2) 22,046,864 23,905,515 23,905,515 — 27,485,271 Total(3) 26,658,864 29,905,515 28,505,515 4,000,000 27,485,271 Marianne D. Short Cash Payments 4,812,000 — — — — Annual Cash Incentive(1) — 2,430,000 2,430,000 2,430,000 — Insurance Benefits — 2,000,000 540,000 — — Continued Equity Vesting(2) 21,005,403 19,123,382 19,123,382 21,005,403 21,005,403 Total(3) 25,817,403 23,553,382 22,093,382 23,435,403 21,005,403 (1)Represents the maximum amount the Compensation and Human Resources Committee may in its discretion determine, but is not required, to pay the executive officer (or the executive officer'sofficer’s estate, if applicable) based upon a prorated portion of the award that the executive officer would have received but for his death, disability or retirement, calculated at the achievement of the maximum performance target, as more fully described in footnote 2 to the 20182021 Grants of Plan-Based Awards table. For the purposes of this table, the potential amounts have not been prorated because the table assumes a death, disability or retirement as of December 31, 2018.2021.(2) 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformation(2)20182021 ($249.12)502.14), (ii) intrinsic value of the unvested stock options, which is calculated based on the difference between the closing price of our stock on December 31, 20182021 ($249.12)502.14) and the exercise or grant price of the unvested stock options as of that date, and (iii) the number of performance shares earned if target performance is achieved multiplied by the closing stock price on December 31, 20182021 ($249.12)502.14). If maximum performance is achieved for the performance shares, the amounts for Acceleration ofContinued Equity Vesting would be (a) for "For“For Good Reason or Not for Cause," $56,455,981” $74,805,137 for Mr. Hemsley; $52,704,470 for Mr. Wichmann; $25,735,255Witty; $50,214,245 for Mr. Rex; $13,872,061$57,831,821 for Mr. McMahon; $29,494,605 for Mr. Thompson; and $23,828,434 for Ms. Short; (b) for “Death” and “Disability,” $67,811,061 for Mr. Witty; and $25,859,368 for Mr. Nelson; (b) for "Death" and "Disability," $44,111,089 for Mr. Hemsley; $39,165,296 for Mr. Wichmann; $21,975,989$44,561,054 for Mr. Rex; $15,535,051$43,312,945 for 2022 Proxy Statement | Potential Payments Upon Termination or Change in Control 58 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information Mr. McMahon; $27,773,499 for Mr. Thompson; and $20,064,392 for Ms. Short; (c) for “Retirement,” $57,831,821 for Mr. McMahon; and $23,828,434 for Ms. Short; and (d) for “Change in Control,” $85,760,557 for Mr. Witty; and $18,737,525 for Mr. Nelson; (c) for "Retirement," $56,455,981 for Mr. Hemsley; $52,704,470 for Mr. Wichmann; and $25,859,368 for Mr. Nelson; and (d) for "Change in Control," $56,455,981 for Mr. Hemsley; $52,704,470 for Mr. Wichmann; $28,229,897$59,079,930 for Mr. Rex; $21,242,391$57,831,821 for Mr. Witty; and $25,859,368McMahon; $34,933,012 for Mr. Nelson.For "For“For Good Reason or Not for Cause,"” the amount includes the value of unvested equity awards held by the named executive officer that will not immediately vest upon termination but will continue to vest through any applicable severance.severance period. For "Retirement,"“Retirement,” the amount includes the value of certain unvested equity awards granted in 2015, 2016, 20172018, 2019, 2020 and 20182021 that will continue to vest and be exercisable for a period of five years (but not after the award'saward’s expiration date). The value of the awards that will not immediately vest is based on their intrinsic values on December 31, 2018.2021. However, because these awards would continue to vest after termination of employment or retirement, the actual value the named executive officer would receive is not determinable. At December 31, 2018, Messrs. Hemsley, Wichmann,2021, Mr. McMahon and NelsonMs. Short had met the retirement eligibility provisions.(3)Does not include the value of benefits, plans or arrangements that would be paid or available following termination of employment that do not discriminate in scope, terms or operation in favor of our executive officers and that are generally available to all salaried employees or accrued balances under any non-qualified deferred compensationplan that is described above.As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing the following information about the relationship between the annual total compensation of our median employee and the annual total compensation of our CEO.For purposes of reporting annual total compensation and the ratio of annual total compensation of our CEO to our median employee, both the CEO and median employee'semployee’s annual total compensation were calculated consistent with the Summary Compensation Table executive compensation disclosure requirements, plus the value of employer-paid health insurance contributions. Our median employee compensation was $57,412$61,379 and our Chief Executive Officer'sCEO’s compensation was $18,124,873.$18,448,785. Accordingly, our CEO to median employee pay ratio is 316:301:1.Our enterprise-wide Company compensation philosophy is designed to attract and retain high-quality talent and provide market-competitive total compensation opportunities that support our pay-for-performance culture. Actual pay practices vary for employees by level and geographic location based on competitive market factors. The most significant difference in the pay practices for our CEO versus our median employee is the use of variable/at-risk compensation. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationdirectcash compensation as the measure to determine the median employee in our global employee population as of October 1, 2018.2021. That workforce population consisted of 272,625333,499 global full-time, part-time, temporary and seasonal employees employed on that date. 85,332113,443 of those employees were located outside the United States and we then applied the de minimis exemption to exclude 11,53015,384 employees in the Philippines (4.2%Chile (4.6% of our global employee population). 2022 Proxy Statement | CEO Pay Ratio 59 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information We have a broad and diverse workforce with approximately 60%59% of the people represented in three key talent pillars (85,000(38% clinicians, 45,00012% customer-facing employees and 30,0009% information and computer technologists). Our median employee (one of our customer-facing employees) is a non-exempt, full-time employee who works within our operations function as a senior claimscustomer service representative lead in the United States.A summary of our workforce population is provided in the charts below:
1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformation![[MISSING IMAGE: tm223410d1-pc_geograpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm223410d1-pc_geograpn.jpg)
Proposal 2022 Proxy Statement | CEO Pay Ratio 60 1 Board of
Directors 2 — Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information PROPOSAL 2: Advisory Approval of the Company'sCompany’s Executive Compensation The Board of Directors recognizes the significant interest of shareholders in executive compensation matters. As required by Section 14A of the Exchange Act, we are seeking shareholders'shareholders’ views on our executive compensation philosophy and practices through an advisory vote on the following resolution at the Annual Meeting:"“Resolved, that the shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables and the related narrative disclosures."The Compensation Discussion and Analysis, compensation tables and related narrative disclosures appear on pages 28-6732-61 of this proxy statement.As discussed in the Compensation Discussion and Analysis, the Board of Directors believes that our executive compensation program attracts and retains highly qualified executives while linking executive compensation directly to Company-wide performance and long-term shareholder interests. In deciding how to vote on this proposal, the Board of Directors asks you to consider the key points with regard to our executive compensation program included in the Compensation Discussion and Analysis and in the "Executive Summary"“Executive Summary” section on pages 28-2929-31 of this proxy statement.Following our 2021 say on pay vote, we sought feedback from shareholders to better understand what motivated their votes and what actions we could take to address their concerns about our executive compensation program. We were pleased to hear strong shareholder support of the overall design of our executive compensation program as well as the Company’s overall pay-for-performance. Shareholders overwhelmingly did not indicate a desire for broad changes to our program design. For more information on our engagement program and changes made to respond to the 2021 Say on Pay vote, please see pages 33-34 under the heading “Our 2021 Say on Pay Vote; Shareholder Engagement.”This advisory proposal, commonly referred to as a "Say-on-Pay"“Say on Pay” proposal, is not binding on the Board of Directors. Although the voting results are not binding, the Board and the Compensation and Human Resources Committee will review and consider them when evaluating our executive compensation program. More than 95% of the votes cast were in favor of our executive compensation program at each of our annual meetings since our inaugural vote in 2011.In addition to our annual advisory vote to approve the Company'sCompany’s executive compensation, we are committed to ongoing engagement with our shareholders on executive compensation and corporate governance issues. These engagement efforts take place throughout the year where appropriate through meetings, telephone calls and correspondence involving our senior management, directors and representatives of our shareholders.For these reasons, the Board of Directors recommends you vote FOR approval of the compensation of the named executive officers, as disclosed in this proxy statement. Executed proxies will be voted FOR approval of the compensation of the named executive officers unless you specify otherwise. 1
Directors recommends you vote FOR approval of the compensation of the named executive officers, as disclosed in this proxy statement. Executed proxies will be voted FOR approval of the compensation of the named executive officers unless you specify otherwise.2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationAUDIT2022 Proxy Statement | PROPOSAL 2: Advisory Approval of the Company’s Executive Compensation 61 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information The Audit and Finance Committee (the “Committee”) of our Board of Directors is comprised of three non-employee directors, all of whom are audit committee financial experts, as defined by the SEC. The Board of Directors has determined all of the members of the Audit Committee are independent within the meaning of the listing standards of the NYSE, the rules of the SEC and the Company'sCompany’s Standards for Director Independence. The Audit Committee operates under a written charter adopted by the Board of Directors accessible in the corporate governance section of our website atwww.unitedhealthgroup.com/about/corporate-governanceAbout/CorporateGovernance.aspx.The Audit Committee has responsibility for selecting and evaluating the independent registered public accounting firm, which reports directly to the Audit Committee, overseeing the performance of the Company'sCompany’s internal audit function, and assisting the Board of Directors in its oversight of enterprise risk management, including privacy, cyber security, data protection, ethics and data security.compliance. Management has primary responsibility for the Company'sCompany’s consolidated financial statements and the overall reporting process, for maintaining adequate internal control over financial reporting and, with the assistance of the Company'sCompany’s internal auditors, for assessing the effectiveness of the Company'sCompany’s internal control over financial reporting. Deloitte & Touche LLP ("Deloitte"(“Deloitte”) has served as the Company'sCompany’s independent registered public accounting firm since 2002.While it is not the duty of the Audit Committee to plan or conduct audits, the AuditThe Committee engages with the Company'sCompany’s independent registered public accounting firm and the internal auditors regarding the overall scope and plans for their respective audits. The Company'sCompany’s independent registered public accounting firm is responsible for performing an independent audit of the Company'sCompany’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States), expressing an opinion as to the conformity of the consolidated financial statements with generally accepted accounting principles (“GAAP”) in the United States of America, and auditing management'smanagement’s assessment of the effectiveness of internal control over financial reporting. The Audit Committee'sCommittee’s responsibility is to monitor and oversee these processes. The Audit Committee also oversees management'sprocesses and to oversee management’s processes to identify and quantify material risks facing the Company, including risks disclosed in the Company'sCompany’s Annual Report on Form 10-K. The Audit Committee meets regularly with the internal auditors and independent registered public accounting firm, with and without management present, to discuss the results of their examinations, the evaluation of the Company'sCompany’s internal control over financial reporting and the overall quality of the Company'sCompany’s accounting and reporting.The Audit Committee has adopted a Policy for Approval of Independent Auditor Services (the "Policy"“Policy”) outlining the scope of services the independent registered public accounting firm may provide to the Company. The Policy sets forth guidelines and procedures the Company must follow when retaining the independent registered public accounting firm to perform audit, audit-related, tax and other services. The Policy also specifies certain non-audit services that may not be performed by the independent registered public accounting firm under any circumstances. Pursuant to these guidelines, the Audit Committee approves fee thresholds annually for each of these categories, and services within these thresholds are deemed pre-approved. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationAudit Committee that the Company'sCompany’s consolidated financial statements were prepared in accordance with generally accepted accounting principles.GAAP. The Audit Committee has reviewed and discussed with management and Deloitte in separate sessions the Company'sCompany’s consolidated financial statements for the years ended December 31, 2018, December 31, 2017,2021, 2020 and December 31, 2016, management's2019, management’s annual report on the Company'sCompany’s internal control over financial reporting and Deloitte'sDeloitte’s attestation. The Audit Committee discussed with management and Deloitte the process used to support certifications by the Company'sCompany’s CEO and CFO as required by the SEC and the Sarbanes-Oxley Act of 2002 to accompany the Company's 2022 Proxy Statement | Audit and Finance Committee Report 62 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information Company’s periodic filings with the SEC and the process used to support management'smanagement’s annual report on the Company'sCompany’s internal controls over financial reporting.The Audit Committee discussed with Deloitte matters required to be discussed by Auditing Standard No. 1301, "Communications with Audit Committees" issued by the applicable Public Company Accounting Oversight Board standards and Rule 2-07 of Regulation S-X. Deloitte provided to the Audit Committee the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding Deloitte'sDeloitte’s communications with the Audit Committee concerning independence, and the Audit Committee discussed with Deloitte the accounting firm'sfirm’s independence. In considering the independence of Deloitte, the Audit Committee took into consideration whether the provision of non-audit services is compatible with maintaining the independence of Deloitte. In connection with its selection of Deloitte as the Company'sCompany’s independent registered public accounting firm for the year ending December 31, 2019,2022, the Audit Committee conducted a performance evaluation of Deloitte'sDeloitte’s services.Based upon the Audit Committee'sCommittee’s review of the financial statements, its independent discussions with management and Deloitte, and the Audit Committee'sits review of the representation of management and the report of the independent registered public accounting firm, to the Audit Committee, and subject to the limitations of the Audit Committee'sits role, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements for the years ended December 31, 2018, December 31, 2017,2021, 2020 and December 31, 2016,2019 be included in the Company'sCompany’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018,2021 filed with the SEC.Members of the Audit and Finance CommitteeGlenn M. Renwick, ChairMichele J. HooperF. William McNabb III, Chair
Michele J. Hooper
Paul R. Garcia 1
DirectorsCorporate
GovernanceExecutive
CompensationAuditAudit55 Annual
MeetingOther
Information Aggregate fees billed to the Company for the fiscal years ended December 31, 20182021 and 2017,2020, represent fees billed by the Company'sCompany’s principal independent registered public accounting firm, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates, which includes Deloitte Consulting (collectively, "Deloitte & Touche"“Deloitte”). The Audit and Finance Committee pre-approved the audit and non-audit services provided in the years ended December 31, 20182021 and 2017,2020, by Deloitte, & Touche, as reflected in the table below. Fee Category 2021
($) 2020
($) Audit Fees(1) 17,767,000 16,992,000 Audit-Related Fees(2) 7,897,000 8,324,000 Total Audit and Audit-Related Fees 25,664,000 25,316,000 Tax Fees(3) 1,002,000 1,536,000 All Other Fees(4) — 163,000 Total 26,666,000 27,015,000 (1) Year 2018 2017 $ 19,465,000 $ 21,077,000 3,154,000 3,723,000 $ 22,619,000 $ 24,800,000 1,550,000 2,266,000 90,000 102,000 $ 24,259,000 $ 27,168,000 (1)Audit-Related(2)Audit Related Fees for 20182021 and 20172020 include service organization controls (SOC) reports, benefit plan and other required audits, an audit ofassurance services for one of our subsidiaries, and certain AICPA agreed-upon procedures andagreed upon procedures. Audit Related Fees for 2020 also included due diligence services.(3)(2)Tax Fees include tax compliance, planning and support services. In 20182021 and 20172020, approximately $499,000$166,000 and $285,000,$528,000, respectively, of Tax Fees were related to international tax services, approximately $771,000$598,000 and $1,787,000,$719,000, respectively, of Tax Fees were for businesstax operating model operating design services and audit support and approximately $280,000$238,000 and $194,000,$289,000, respectively, of Tax Fees were related to tax compliance (review and preparation of corporate and expatriate tax returns, review of the tax treatment for certain expenses and claims for refunds).(4)(3)All Other Fees include consulting feesfees.Audit and fees relating to communications training for international employees. Audit Committee'sFinance Committee’s Consideration of Independence of Independent Registered Public Accounting FirmThe Audit and Finance Committee has reviewed the nature of non-audit services provided by Deloitte & Touche and has concluded these services are compatible with maintaining the firm'sfirm’s ability to serve as our independent registered public accounting firm.The Audit and Finance Committee has adopted a Policy for Approval of Independent Auditor Services (the "Policy") outlining the scope of services Deloitte & Touche may provide to the Company. The Policy sets forth guidelines and procedures the Company must follow when retaining Deloitte & Touche to perform audit, audit-related, tax and other services. The Policy also specifies certain non-audit services thatwhich may not be performed by Deloitte & Touche under any circumstances. Pursuant to these guidelines, the Audit and Finance Committee approves fee thresholds annually for each of these categories, and services within these thresholds are deemed pre-approved. The Audit and Finance Committee has delegated authority to the Chair of the Audit and Finance Committee to pre-approve permitted audit and non-audit services between regularly scheduled quarterly Audit and Finance Committee meetings, provided that such pre-approvals are presented to the Audit and Finance Committee at its next scheduled meeting. All fees reported above were approved pursuant to the Policy. The services provided by our independent registered public accounting firm and related fees are discussed with the Audit and Finance Committee, and the Policy is evaluated and updated periodically by the Audit and Finance Committee. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationProposal 2022 Proxy Statement | Independence of Independent Registered Public Accounting Firm | Audit and Non-Audit Services Approval Policy 64 1 Board of
Directors 2 Corporate
Governance 3 — Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information PROPOSAL 3: Ratification of Independent Registered Public Accounting Firm The Audit and Finance Committee is directly responsible for the appointment, evaluation, compensation, retention and oversight of the independent registered public accounting firm retained to audit the Company'sCompany’s financial statements. The Audit and Finance Committee has appointed Deloitte & Touche LLP ("Deloitte") as our independent registered public accounting firm for the year ending December 31, 2019.2022. Deloitte has been retained as our independent registered public accounting firm since 2002. The Audit and Finance Committee is responsible for approving audit fees associated with the retention of Deloitte. In order to assure continuing auditor independence, the Audit and Finance Committee periodically considers whether there should be a rotation of our independent registered public accounting firm. Further, as part of the Audit Committee'sand Finance Committee’s assessment of Deloitte and in conjunction with the mandated rotation of the audit firm'sfirm’s lead engagement partner, in November 2015,October 2020, the Audit and Finance Committee interviewed candidates to become Deloitte'sDeloitte’s new lead engagement partner and following those interviews, selected the individual who became the new lead engagement partner beginning in 2017.Based on its most recent evaluation of Deloitte, the members of the Audit and Finance Committee believe the continued retention of Deloitte as the Company'sCompany’s independent registered public accounting firm is in the best interest of the Company and its shareholders. Among the factors considered by the Audit and Finance Committee in reaching this recommendation were the following: the quality and efficiency of Deloitte'sDeloitte’s historical and recent audit plans and performance; Deloitte'sDeloitte’s capabilities and expertise in handling the breadth and complexity of the Company'sCompany’s U.S. and global operations; external data on audit quality and performance, including recent Public Company Accounting Oversight Board (PCAOB)PCAOB reports on Deloitte; the appropriateness of Deloitte'sDeloitte’s fees for audit and non-audit services; Deloitte'sDeloitte’s independence and objectivity; and the quality and candor of Deloitte'sDeloitte’s communications with management and the Audit and Finance Committee.The Board of Directors has proposed that shareholders ratify the appointment of Deloitte at the Annual Meeting. If shareholders do not ratify the appointment of Deloitte, the Audit and Finance Committee will reconsider the appointment but is not obligated to appoint another independent registered public accounting firm. The Audit and Finance Committee evaluates, at least every three years, whether to rotate our independent registered public accounting firm.Representatives of Deloitte are expected to be present at the meeting,Annual Meeting, will have an opportunity to make a statement and will be available to respond to appropriate questions from shareholders.The Board of Directors recommends you vote FOR ratification of the appointment of Deloitte as our independent registered public accounting firm for the year ending December 31, 2019. Executed proxies will be voted FOR ratification of this appointment unless you specify otherwise. 1
Directors recommends you vote FOR ratification of the appointment of Deloitte as our independent registered public accounting firm for the year ending December 31, 2022. Executed proxies will be voted FOR ratification of this appointment unless you specify otherwise.2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationANNUAL MEETING2022 Proxy Statement | PROPOSAL 3: Ratification of Independent Registered Public Accounting Firm 65 TABLE OF CONTENTS1 Proposal Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 — Audit 5 Annual
Meeting 6 Other
Information Annual Meeting PROPOSAL 4: Shareholder Proposal Regarding Amendment to Proxy Access BylawSeeking Shareholder Ratification of Termination Pay We have been informed that John Chevedden intends to introduce the proposal set forth below at the Annual Meeting. In accordance with SEC rules, the text of the proposal is printed verbatim from the submission. The Company will provide to shareholders the address and reported holdings of the Company'sCompany’s common stock for the proposal sponsor promptly upon receiving an oral or written request. The Board of Directors has recommended a vote against this proposal for the reasons set forth following the proposal.![[MISSING IMAGE: tm223410d1-fc_sharebw.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm223410d1-fc_sharebw.jpg){kind=small}
Shareholders request that the Board seek shareholder approval of any senior manager’s new or renewed pay package that provides for severance or termination payments with an estimated value exceeding 2.99 times the sum of the executive’s base salary plus target short-term bonus.“Severance or termination payments” include cash, equity or other compensation that is paid out or vests due to Proxy Access Bylaw
a senior executive’s termination for any reason. Payments include those provided under employment agreements, severance plans, and change-in-control clauses in long-term equity plans, but not life insurance, pension benefits, or deferred compensation earned and vested prior to termination.RESOLVED:“Estimated total value” includes: lump-sum payments; payments offsetting tax liabilities; perquisites or benefits not vested under a plan generally available to management employees; post-employment consulting fees or office expense; and equity awards if vesting is accelerated, or a performance condition waived, due to termination. Stockholders askThe Board shall retain the boardoption to seek shareholder approval after material terms are agreed upon.Generous performance-based pay can be good but shareholder ratification of directors“golden parachute” severance packages with a total cost exceeding 2.99 times base salary plus target short-term bonus better aligns management pay with shareholder interests.For instance at one company if the CEO is terminated without cause, whether or not his termination follows a change in control, he will receive $39 million in termination payments, nearly 7-times his base salary plus short-term bonus.It is in the best interest of UnitedHealth shareholders to amend its proxy access bylaw provisions and any associated documents,be protected from such lavish management termination packages for one person.It is important to includehave this policy in place so that UnitedHealth management stays focused on improving company performance as opposed to seeking a business combination to mostly to trigger a management golden parachute windfall.This proposal is more important at UnitedHealth because of the following change:No limitation shall be placedtendency to overpay management or provide the wrong management pay incentives. UNH management pay was rejected by 27% of shares in 2021 when a 5% rejection is the norm. And Ms. Gail Wilensky on the management pay committee was rejected by up to 35-times the number of stockholders that can aggregate their sharesnegative votes compared to achieveother UNH directors. 2022 Proxy Statement | PROPOSAL 4: Shareholder Proposal Seeking Shareholder Ratification of Termination Pay 66 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information This proposal topic won 58% support at the 3% of common stock required to nominate directors under our Company's proxy access provisions.Under current provisions, even if the 20 largest public pension funds were able to aggregate their shares, they would not meet the 3% criteria for a continuous 3-years at most companies examined by the Council of Institutional Investors. Additionally many of the largest investors of major companies are routinely passive investors who would be unlikely to be part of the proxy access2021 FedEx annual meeting.A 2015 General Electric shareholder aggregation process. Our company has a strict 20 participant limit for shareholder proxy access.Under this proposal it is likely that the number of shareholders who participate in the aggregation process would still be a modest number duesimilar to the rigorous rules our company adopted for aFedEx proposal won 40% GE shareholder support with 2.2 billion votes in favor. This may have represented 51% support from the GE shares that had access to make an applicationindependent proxy voting advice and are not forced to qualify as onerely on the biased recommendations of the aggregation participants. Plus it is easy for our management to reject potential aggregating shareholders becauseespecially on issues of management simply needs to find one item lacking from a listpay.Please vote yes:Shareholder Ratification of requirements. Supporting StatementNow is a good time to adopt this proposal given these critical issues that deserve strict oversight and the avoidance of reoccurrences:New York Attorney General request for information on policies of pharmacy benefit managers and insurers related to prescribing opioid medications.November 2018DOJ joined whistleblower lawsuits over alleged overcharging of Medicare Advantage Program.August 2018 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationClass Action of alleged overcharged co-payment amounts of prescription drugs. May 2018 Insulin: Proposed Class Action suit filed by patients over high prices.March 2018EpiPen: Purported Class Action over inflated EpiPen prices.January 2018This proposal would put shareholders in a better position to ask for Board refreshment. For instance the following directors had excessively long-tenure which was made worse by elevating these directors to very important roles. Long tenure can seriously erode director independence at shareholder expense.Richard Burke41-yearsLead DirectorGail Wilensky25-yearsWilliam Ballard25-yearsStephen Hemsley18-yearsInsider ChairmanTwo members of the executive pay committee each had 25-years tenure.The majority of the nomination committee had an average tenure of 33-years.The Board of Directors unanimously recommends a vote AGAINST the foregoing proposal for the following reasons:We have carefully considered this proposal and have concluded that it is unnecessary and not necessary or in the best interests of the Company orand its shareholders.The Company’s termination policy and payment are appropriate.BackgroundThe proposal is unnecessary. The total estimated value of the cash severance benefits provided in employment agreements with our executive officers is well below the 2.99x cap the proposal seeks.The Company offers executives accelerated vesting of equity awards only in very limited situations which are consistent with market practices.The benefits covered by the shareholder proposal include not only cash payments but also the value of outstanding equity awards that accelerate upon a termination event. We do not offer accelerated vesting of equity awards when termination is without cause or for good reason. We provide accelerated vesting of equity awards in the limited situations of death, disability, or, in the event of a change of control of the Company, when an executive’s termination is without cause or for good reason (i.e., double-trigger). These limited acceleration provisions were approved by our shareholders and are considered to be appropriate and consistent with market practices. These provisions do not penalize executives or their families in the rare and unfortunate event of their disability or death. In February 2016, the event of a change of control of the Company, these provisions are designed to incent our executive officers to remain with the Company and maximize value for our shareholders.The proposal would restrict our ability to structure executive compensation effectively.Shareholder interests are best protected by providing flexibility to the Compensation and Human Resources Committee to assess the needs of the Company, the competition for talent and other relevant factors in making decisions regarding benefits for executives — all within a clearly defined set of principles. The Compensation and Human Resources Committee is composed entirely of independent directors and is advised regularly by an independent compensation consultant. Our Board believes the Company’s current executive compensation policies and practices align the interests of our executives with those of our shareholders and provide appropriate limits on post-termination compensation.The proposal prevents the Company from using long-term equity awards which are effective in maximizing long-term shareholder value.Since the proposal would include the value of outstanding equity awards in the severance multiple, the Board believes the proposal would effectively prevent the Company from using long-term equity in its compensation plans. This would directly conflict with the objective of aligning shareholder and executive interests.Equity awards are a fundamental component of executive compensation programs. Total target compensation granted in 2021 to our named executive officers was weighted towards long-term equity compensation, which represents 2022 Proxy Statement | PROPOSAL 4: Shareholder Proposal Seeking Shareholder Ratification of Termination Pay 67 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information approximately 75% of total target compensation for our named executive officers in the aggregate. By encouraging stock ownership and rewarding long-term growth, our compensation program focuses management on shareholder value creation. Performance-based awards provide incentives to put forth maximum efforts for the Company’s success. Our executive compensation program has served our stakeholders well, as shown by sustained performance over time, including total shareholder return of 947% from 2012 through 2021.The proposal could put us at a competitive disadvantage in attracting and retaining highly qualified executives.Calling a special meeting of shareholders to obtain approval of a severance arrangement would be expensive, time-consuming and could place the Company at a competitive disadvantage in recruiting qualified candidates.Our shareholders are able to effectively express their views on our executive compensation through our annual say on pay advisory vote and NYSE’s requirement to seek shareholder approval of equity compensation plans. The proposal’s request for a shareholder vote on a specific component of the Company’s executive compensation program is duplicative of these opportunities and goes beyond what is already required by SEC and NYSE rules. As a result, this proposal is unnecessary. For these reasons, the Board of Directors recommends you vote AGAINST the proposal. Executed proxies will be voted AGAINST this proposal unless you specify otherwise. 2022 Proxy Statement | PROPOSAL 4: Shareholder Proposal Seeking Shareholder Ratification of Termination Pay 68 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information PROPOSAL 5: Shareholder Proposal Regarding Political Contributions Congruency Report We have been informed the Educational Foundation of America intends to introduce the proposal set forth below at the Annual Meeting. In accordance with SEC rules, the text of the proposal is printed verbatim from the submission. The Company will provide to shareholders the address and reported holdings of the Company’s common stock for the proposal sponsor promptly upon receiving an oral or written request. The Board of Directors adoptedhas recommended a proxy access bylawvote against this proposal for the reasons set forth following the proposal.Proposal 5 — Political Contributions MisalignmentWhereas:It is the policy of UnitedHealth Group (“UHG”) to make political contributions “to advance policy solutions that focus on achieving universal coverage, improving health care affordability, enhancing the health care experience, and achieving better health outcomes.” However, UHG’s political expenditures appear to be misaligned with the company’s values.•After the January 6, 2021 attack on the Capitol, UHG said it would pause political donations to federal candidates “to ensure they continue to align with our company’s values.” Yet UHG made political donations of nearly $300,000 in January-June 2021.•In the last three election cycles, UHG contributed over $200,000 to a 527 organization leading efforts to strike down the Affordable Care Act, which providesmade prescription drugs more affordable.•Although UHG offers insurance coverage for abortion to its clients, based on publicly available records, the Company's shareholders a usefulproponents estimate that in the 2016-20 election cycles, the company and balanced proxy access process while safeguarding the interests of all of our shareholders.The Company's proxy access bylaw permits a shareholder, or group of up to 20 shareholders, owningits employee PAC have donated at least 3% of the Company's outstanding shares of common stock continuously for at least three years,$8.5 million to nominatepoliticians and includepolitical organizations working to weaken women’s access to abortion. This includes $120,000 in the Company's annual meeting proxy materials director nominees constituting up2020 election cycle to 20%the sponsors of Texas SB 8-which creates potential liability for organizations that insure in-state abortions after approximately six weeks of pregnancy -and more than $230,000 to the Board, subject to requirements specifiedsponsors of restrictive abortion bills in the Company's bylaws.Our decision to adopt proxy access was informed by discussions with our shareholders and14 other corporate governance experts. After carefully considering the range of viewpoints and market practices, we adopted an appropriate, balanced and effective proxy access framework that provides meaningful proxy access rights to shareholders, while mitigating the possibility for misuse. The 20 shareholder aggregation limit we adoptedstates.•UHG has stated “Reducing carbon emissions has been adopted by almost all U.S. listed companies implementing proxy access (approximately 93% as of December 31, 2018), and has been recognized by the Council of Institutional Investors as a market standard. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationThe proponent's requested change to the Company's proxy access bylaw would place no limit on the number of shareholders who may aggregate their holdings to reach the required 3% ownership threshold. An aggregation limit of 20 provides abundant opportunitieslong-standing priority for the Company's shareholders to combine with other shareholders to satisfy the ownership requirement. The Company's proxy access policies are further strengthened in the context of leading corporate governance measures supporting the accountability of the Board to our shareholders, including:•Board members are elected annually by a majority vote of our shareholders.•The Board has a strong Lead Independent Director with robust responsibilities.•The Boardcompany.” Yet it is highly independent and benefits from an ongoing commitment to refreshment. Since January 2017, we have appointed five new directors to the Board who are standing for election this year.•The Company's Nominating Advisory Committee, comprised of long-term shareholders of the Company and a member of the medical community, provides our NominatingU.S. Chamber of Commerce, which has consistently lobbied to roll back climate regulations and Corporate Governance Committee with additional input regarding desirable characteristicspromote regulatory frameworks that would slow the transition towards a lower-carbon economy. Additionally, a Bloomberg analysis found that between the 2018 midterms and October 2020, for every dollar UHG contributed to climate-friendly members of director candidatesCongress, it donated $1.67 to members characterized as “ardent obstructionists” of proactive climate policy.Proponents believe that UHG should establish policies and the composition of our Board.•Shareholders have the right to call a special meeting.•Shareholders have the right to act by written consent.•The Company has a robust, ongoing shareholder engagement program.The Company's proxy access bylaw is consistent with market practice and strikes the appropriate balance between providing meaningful proxy access and safeguarding shareholders by mitigating misuse, while limiting administrative burden and expense. Our corporate governance practices assure strong Board accountability and provide shareholders with appropriate accessreporting systems that minimize risk to the Board. firm’s reputation and brand by addressing possible missteps in corporate electioneering and political spending that contrast with its stated healthcare and environmental objectives.Resolved:Shareholders request that UHG publish an annual report, at reasonable expense, analyzing the congruency of political, lobbying, and electioneering expenditures during the preceding year against publicly stated company values and policies, listing and explaining any instances of incongruent expenditures, and stating whether the identified incongruencies have led to a change in future expenditures or contributions. 2022 Proxy Statement | PROPOSAL 5: Shareholder Proposal Regarding Political Contributions Congruency Report 69 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information Supporting Statement:Proponents recommend that such report also contain management’s analysis of risks to our company’s brand, reputation, or shareholder value of expenditures in conflict with publicly stated company values. “Expenditures for electioneering communications” means spending, from the corporate treasury and from the PACs, directly or through a third party, at any time during the year, on printed, internet or broadcast communications, which are reasonably susceptible to interpretation as in support of or opposition to a specific candidate. This proposal aligns with the standards and procedures set forth in the Center for Political Accountability’s Model Code of Conduct.Board of Directors’ RecommendationThe Board of Directors unanimously recommends a vote AGAINST the foregoing proposal for the following reasons:We do not believehave carefully considered this proposal and have concluded it is necessary orunnecessary and not in the best interests of the Company and its shareholders.The proposal requires the Company to publish a report annually in perpetuity regardless of value or its shareholderscost.The proposal requires the Company to changepublish a report annually in perpetuity without regard to utility. The proponent asks the Company's proxy access bylawCompany to report every expenditure — as outlinedlittle as one dollar — they are able to determine is incongruent with a broad mission statement, regardless of value or cost. As further described below, the proposed report does not add additional value because the Company’s engagement in the proposal.ForThe Company does not believe it should commit to any action in perpetuity regardless of value or cost. If the Company is required to publish more and more granular reports on dozens of subjects, we would have to divert significant energies from our core operations in support of our health-driven mission. This would make it difficult for the Company to operate effectively for our those we serve, including shareholders.Our engagement in the political process aligns with our mission.The Company engages in the political process to further its mission — we seek to help people live healthier lives and help make the health system work better for everyone. We believe it is important to engage meaningfully in a bipartisan manner with Federal and State policy-makers to advance the interests of the Company, shareholders, customers, and all of our stakeholders across the health care system.The Company has articulated at length its public policy positions, which are the basis for its political expenditures. Our comprehensive, actionable and timely policy solutions to achieve our mission — focused on expanding access to care, improving health care affordability, enhancing the health care experience and driving better health outcomes — are publicly articulated in The Path Forward, our Sustainability Report, and other documents accessible on our website.Participation in the political process comes with the understanding we do not agree with all positions of all recipients on all issues. We believe, however, these reasons,recipients are positioned to meaningfully address issues of importance to the Company, our shareholders and those we serve. As we contemplate each political contribution, we consider several factors, primarily candidates’ positions, votes and actions on priority health care topics and related issues impacting our business and customers.The Company provides extensive public disclosure on its advocacy and political contributions.We are committed to transparency as we engage in public advocacy activities in furtherance of our mission. Our lobbying activities are subject to extensive governmental regulation and public disclosure requirements, which require the Company to file regular, publicly-available and detailed reports with the U.S. Senate and House of Representatives 2022 Proxy Statement | PROPOSAL 5: Shareholder Proposal Regarding Political Contributions Congruency Report 70 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information disclosing advocacy activities undertaken on our behalf. Our advocacy disclosure reports filed with the U.S. Congress are available at http://disclosures.house.gov/ld/ldsearch.We also make a Political Contributions Report publicly available with further detail on our political contributions and related activities. This report details contributions made to political candidates, parties and committees, including recipient names and amounts given and includes a link to our lobbying disclosure reports filed with the U.S. Congress. An archive of our political contribution reports — covering political expenditures for the last nine years — is available on the Company’s website.UnitedHealth Group’s bipartisan Political Action Committee is funded entirely by voluntary contributions from eligible employees and has a long history of balanced political giving, prioritizing candidates that represent communities we serve, serve in leadership positions and demonstrate support for policies of importance to the Company which help us achieve our mission. Contributions are made on a non-partisan basis, are not made to candidates running for U.S. president, and are never made on the basis of the personal political preferences of Company directors, officers or employees.UnitedHealth Group is recognized as a “Trendsetter” in the 2021 Center for Political Accountability-Zicklin Index of Political Accountability.The Company’s governance policies provide for effective oversight of its political activities.The Board fully supports accountability, appropriate transparency, and disclosure of the Company’s political contributions and advocacy activities and expenditures. The Company’s political engagement and public policy activities are led by our External Affairs function with active engagement throughout and across our businesses. Our Board’s Governance Committee, which oversees our overall strategy on environmental, social and governance (ESG) policies and practices, has oversight of our advocacy and lobbying processes and activities, including key trade association and coalition memberships, as well as reviewing the political contributions made by the Company and its political action committee.The Board of Directors recommends that shareholders vote AGAINST the proposal. Executed proxies will be voted AGAINST this proposal unless you specify otherwise.believes our existing political spending and advocacy policies, governance oversight and disclosure in their current format are consistent with best practice. For these reasons, the Board of Directors recommends you vote AGAINST the proposal. Executed proxies will be voted AGAINST this proposal unless you specify otherwise. 2022 Proxy Statement | PROPOSAL 5: Shareholder Proposal Regarding Political Contributions Congruency Report 1
DirectorsCorporate
GovernanceExecutive
CompensationAuditAudit55 Annual
MeetingOther
Information 1.When and where is our Annual Meeting?We will be holding our Annual Meeting virtually on Monday, June 6, 2022, at 11:00 a.m., Eastern Time, at www.virtualshareholdermeeting.com/UNH2022.We have determined that the 2022 Annual Meeting will be held in virtual format only. At our Annual Meeting, shareholders will be able to participate in, vote and submit questions via the internet. Whether or not you plan to participate in the Annual Meeting, we urge you to vote and submit your proxy in advance of the meeting by one of the methods described in these proxy materials. Additional information can also be found at www.unitedhealthgroup.com/proxymaterials.An archived copy of the Annual Meeting will be available on the “Investors” page of our website at www.unitedhealthgroup.com/investors for 14 days following the Annual Meeting.2.What is the purpose of the Annual Meeting?At the Annual Meeting, shareholders will act upon the matters outlined in the Notice of Annual Meeting of Shareholders. These include:•election of directors;eight directors named in this proxy statement;••an advisory vote to approve our executive compensation (a "Say-on-Pay"“Say on Pay” vote);••ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm; and••if properly presented, onetwo shareholder proposal.Also, onceproposals.In addition to the business of the Annual Meeting, is concluded, management of the Company will also give a business update. Management, Chairschairs of each standing Board committee and representatives of Deloitte & Touche LLP will be available to respond to appropriate questions from shareholders.2. 3.What is a proxy?It is your legal designation of another person to vote the stock you own in the manner you direct. That other person is called a proxy. If you designate someone as your proxy in a written document, that document also is called a proxy or a proxy card. We have designated Dannette L. SmithRupert M. Bondy and Faraz A. ChoudhryKuai H. Leong to serve as proxies for the 2022 Annual Meeting. The Board of Directors will use the proxies at the 20192022 Annual Meeting of Shareholders. The proxies also may be voted at any adjournments or postponements of the meeting.3. 4.What is a proxy statement?The Company'sCompany’s Board of Directors is soliciting proxies for use at the 20192022 Annual Meeting of Shareholders. A proxy statement is a document we give you when we are soliciting your vote pursuant to SEC regulations.4. 5.What is the difference between a shareholder of record and a shareholder who holds stock in street name?Shareholders of Record. If your shares are registered in your name with our transfer agent, EQ Shareowner Services, you are a shareholder of record with respect to those shares and the Notice of Internet Availability of Proxy Materials ("Notice"(“Notice”) or the proxy materials were sent directly to you by Broadridge Financial Solutions. A list of shareholders entitled to vote at the Annual Meeting will be available for viewing during the Annual Meeting by those who log in at 2022 Proxy Statement | Questions and Answers About the Annual Meeting and Voting 72 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information Street Name Holders. If you hold your shares in an account at a bank or broker, then you are the beneficial owner of shares held in "street“street name."” The Notice or proxy materials were forwarded to you by your bank or broker, who is considered the shareholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your bank or broker on how to vote the shares held in your account.account or you may vote your shares electronically by participating in the Annual Meeting.6. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformation5. How many shares must be present to hold the Annual Meeting?In order to conduct the Annual Meeting, holders of a majority of the shares issued and outstanding and entitled to vote as of the close of business on the record date must be present in person or by proxy. This constitutes a quorum. Virtual attendance at our Annual Meeting constitutes presence in person for purposes of quorum at the Annual Meeting. Your shares are counted as present if you attendparticipate in the virtual Annual Meeting and vote in person,electronically, or if you vote your proxy before the Annual Meeting over the Internetinternet or by telephone or by mail. Abstentions and broker non-votes will be counted as present for purposes of establishing a quorum. If a quorum is not present, we will adjourn the Annual Meeting until a quorum is obtained.6. 7.How can I access the proxy materials for the Annual Meeting?Shareholders may access the proxy materials, which include the Notice of Annual Meeting of Shareholders, Proxy Statement (including a form of proxy card) and Annual Report for the year ended December 31, 2018 on the Internet2021 atwww.unitedhealthgroup.com/investors/annual-reports.htmlproxymaterials. We will also provide a hard copy of any of these documents free of charge upon request to: UnitedHealth Group Incorporated, 9900 Bren Road East, Minnetonka, Minnesota 55343, Attention: Secretary to the Board of Directors.Instead of receiving future copies of our proxy materials by mail, you can elect to receive an e-mail that will provide electronic links to these documents. Opting to receive your proxy materials online will save the cost of producing and mailing documents to your home or business, will give you an electronic link to the proxy voting site and will also help preserve environmental resources.Shareholders of Record. If you vote on the Internet atwww.proxyvote.com, simply follow the prompts for enrolling in the electronic proxy delivery service. You also may enroll in the electronic proxy delivery service at any time by going directly towww.unitedhealthgroup.comwww.unitedhealthgroup.com/investors/annual-meeting and following the enrollment instructions.Street Name Holders. If you hold your shares in a bank or brokerage account, you also may have the opportunity to receive the proxy materials electronically. Please check the information provided in the proxy materials you receive from your bank or broker regarding the availability of this service.7. How do I attend the Annual Meeting? 8.What do I need to bring?participate in the Annual Meeting?Shareholders as of the record date may participate in, vote and submit questions at our Annual Meeting by logging in at www.virtualshareholdermeeting.com/UNH2022. To attendlog in, shareholders (or their authorized representatives) will need the control number provided on their proxy card, voting instruction form or Notice. If you experience technical difficulties during the check-in process or during the Annual Meeting, you will need to bring an admission ticket and valid photo identification.Only our shareholders are entitled to attendplease call the meeting. The procedure you must follow in order to attendtechnical support number posted on the meeting depends on whether you are a shareholder of record or a street name holder of our common stock.Shareholders of Record.Annual Meeting website. If you are not a shareholder of record and receivedor do not have a Notice,control number, you may still access the Notice is your admission ticket. If you aremeeting as a shareholder of record and received proxy materials by mail, your admission ticket is attached to your proxy card. You will need to bring the Notice or the admission ticket and valid photo identification with you to the Annual Meeting in order to be admitted to the meeting.Street Name Holders. If you hold your shares in street name, bring with you to the Annual Meeting valid photo identification and your most recent brokerage statement or a letter from your broker or other nominee indicating that you hold our shares. We will use that statement or letter to verify your ownership of common stock and admit you to the Annual Meeting; however,guest, but you will not be able to vote your sharesparticipate.Shareholders as of our record date who participate in our Annual Meeting atwww.virtualshareholdermeeting.com/UNH2022 will have an opportunity to submit written questions live via the internet during a designated portion of the Annual Meeting without a legalMeeting. In order to do so, shareholders must have available their control number provided on their proxy card, voting instruction form or Notice.Consistent with our past practice for in-person annual meetings, each shareholder will be limited to one question to allow us to respond to as described in Question 8.
many shareholder questions as possible during the question-and-answer portion of the meeting.2022 Proxy Statement | Questions and Answers About the Annual Meeting and Voting 1
DirectorsCorporate
GovernanceExecutive
CompensationAuditAudit55 Annual
MeetingOther
Information Please noteWe will address substantially similar questions, or questions that use of cameras, phones or other similar electronic devices andrelate to the bringing of large bags, packages or sound or video recording equipment will not be permittedsame topic, in the meeting room. Attendees will also be required toa single response. Questions must comply with meeting guidelinesthe Meeting Guidelines and procedures thatProcedures which will be available at www.virtualshareholdermeeting.com/UNH2022. Questions that do not comply with the meeting. A copyMeeting Guidelines and Procedures, are not directly related to the business of the meeting guidelinesCompany and procedures is also available on our website atwww.unitedhealthgroup.com/investors/annual-meeting.html.8. How can I vote atare not pertinent to the Annual Meeting if I own shares in street name?If you arematters will not be answered. We ask that all shareholders provide their name and contact details when submitting a street name holder, youquestion through the virtual meeting platform so that we may not vote your shares at the Annual Meeting unless you obtain a legal proxy from your bankaddress any individual concerns or broker. A legal proxy is a bank's or broker's authorization for you to vote the shares it holds in its name on your behalf. To obtain a legal proxy, please contact your bank or broker for further information.9.What shares are included on the Notice, proxy card or voting instruction form?If you are a shareholder of record, you will receive only one Notice or proxy card for all the shares of common stock you hold:•in certificate form;••in book-entry form; and••in any Company benefit plan.If you hold your shares in street name, you will receive one Notice or voting instruction form for each account you have with a bank or broker. If you hold shares in multiple accounts, you may need to provide voting instructions for each account.If you hold shares in our 401(k) savings plan and do not vote your shares or specify your voting instructions on your proxy card, the administrators of the 401(k) savings plan will vote your 401(k) plan shares in the same proportion as the shares for which they have received voting instructions.To allow sufficient time for voting by the 401(k) administrators, your voting instructions must be received by 11:59 p.m. Eastern Time on May 29, 2019.June 1, 2022.10. How can I listen to the live webcast of the Annual Meeting?You can listen to the live webcast of the Annual Meeting by visitingwww.unitedhealthgroup.com and clicking on "Investors" and then on the link to the webcast. An archived copy of the webcast will also be available on our website for 14 days following the Annual Meeting.11. What different methods can I use to vote?By Written Proxy. All shareholders of record who received proxy materials by mail can vote by written proxy card. If you received a Notice or the proxy materials electronically, you may request a proxy card at any time by following the instructions on the Notice or on the voting website. If you are a street name holder, you will receive instructions on how you may vote from your bank or broker, unless you previously enrolled in electronic delivery.��� 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationInternetinternet using the procedures and instructions described on the Notice or proxy card. Street name holders may vote by Internetinternet or telephone if their bank or broker makes those methods available, in which case the bank or broker will enclose the instructions with the proxy materials. The Internetinternet and telephone voting procedures are designed to authenticate shareholders'shareholders’ identities, allow shareholders to vote their shares and to confirm their instructions have been properly recorded.In Person. All shareholders of record may vote in personElectronically at the Annual Meeting. Street name holders may vote Shareholders who participate in person at the Annual Meeting if they have a legal proxy, as described in Question 8.should follow the instructions at The Notice is not a proxy card and cannot be used to vote your shares.12. 11.What is the record date and what does it mean?The record date for the Annual Meeting is April 9, 2019.8, 2022. Only owners of record of shares of common stock of the Company at the close of business on the record date are entitled to notice of and to vote at the Annual Meeting, or at any adjournments or postponements of the Annual Meeting. On April 9, 2019,8, 2022, there were 952,244,528938,949,294 shares of common stock issued, outstanding and entitled to vote. Each owner of record on the record date is entitled to one vote for each share of common stock held. 2022 Proxy Statement | Questions and Answers About the Annual Meeting and Voting 74 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information The record date was established by our Board of Directors as required by the Delaware General Corporation Law. Owners of record of common stock at the close of business on the record date are entitled to:•receive notice of the Annual Meeting; and••vote at the Annual Meeting and any adjournments or postponements of the Annual Meeting.13. 12.If I submit a proxy, may I later revoke it and/or change my vote?Shareholders of record may revoke a proxy and/or change their vote prior to the completion of voting at the Annual Meeting by:•signing another proxy card with a later date and delivering it to an officer of the Company before the Annual Meeting;••voting again over the Internetinternet or by telephone prior to 11:59 p.m., Eastern Time, on June 2, 2019;5, 2022;••voting electronically at the Annual Meeting; or••notifying the Secretary to the Board of Directors in writing before the Annual Meeting.Street name holders may revoke a proxy and/or change their vote prior to the completion of voting at the Annual Meeting by:•submitting new voting instructions in the manner provided by your bank or broker; or••contacting your bank or broker to request a legal proxy in order to vote your shares in personvoting electronically at the Annual Meeting.13. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformation14. Are votes confidential? Who counts the votes?We hold the votes of all shareholders in confidence from directors, officers and employees except:•as necessary to meet applicable legal requirements and to assert or defend claims for or against the Company;••in the case of a contested proxy solicitation;••if a shareholder makes a written comment on the proxy card or otherwise communicates his or her vote to management; or••to allow the independent inspectors of the election to certify the results of the vote.We have retained Broadridge Financial Solutions to tabulate the votes. We have retained CT Hagberg LLC to act as independent inspector of the election.15. 14.How may I confirm my vote was counted?We are offering our shareholders the opportunity to confirm their votes were cast in accordance with their instructions. Vote confirmation is consistent with our commitment to sound corporate governance standards and an important means to increase transparency. Beginning May 20, 201923, 2022 and for up to two months after the Annual Meeting, you may confirm your vote beginning 24 hours after your vote is received, whether it was cast by proxy card, electronically or telephonically. To obtain vote confirmation, log ontowww.proxyvote.com using your control number (located on your Notice or proxy card) and receive confirmation on how your vote was cast. If you hold your shares through a bank or brokerage account, the ability to confirm your vote may be affected by the rules of your bank or broker and the confirmation will not confirm whether your bank or broker allocated the correct number of shares to you. 2022 Proxy Statement | Questions and Answers About the Annual Meeting and Voting 75 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information 16. 15.What are my choices when voting for director nominees and what vote is needed to elect directors?In the vote on the election of director nominees, shareholders may:•vote in favor of a nominee;••vote against a nominee; or••abstain from voting with respect to a nominee.A director nominee will be elected if the number of votes cast "for"“for” the nominee exceeds the number of votes cast "against"“against” the nominee. To address a provision in Delaware law that allows a director who has not been re-electedOur Principles of Governance require our directors to remain in office until a successor is elected and qualified, we have a policy requiring any director who does nottender an irrevocable offer to resign, which becomes effective if he or she fails to receive a greater numbermajority of the votes "for" than "against"cast for such director’s election at the annual meeting and our Board accepts his or her election in an uncontested electionresignation. In the event a director receives a majority “against” vote, and prior to tender his or her resignation fromany such action by the Board, of Directors following certification of the shareholder vote. Under this policy,Governance Committee will consider the tendered resignation offer and recommend to the Board of Directors will determine whether or not to accept or rejectit. Absent a compelling reason not to accept the resignation offer, to resignas determined by the Board in its discretion, the Governance Committee will recommend, and the Board will accept the resignation. The Board will act on the Governance Committee’s recommendation within 90 days offollowing certification of the shareholder vote. The text of this policy appears in our Principles of Governance, which is available on our website atwww.unitedhealthgroup.com/about/who-we-are/corporate-governance.16. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformation17. What are my choices when voting on each of the other proposals considered at the Annual Meeting?For each of the other proposals, shareholders may:•vote for the proposal;••vote against the proposal; or••abstain from voting on the proposal.18. 17.What vote is needed to approve each of the other proposals?The proposal to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm and the shareholder proposalproposals must be approved by the holders of a majority of the voting power of the shares of common stock present in person or represented by proxy and entitled to vote in person or by proxy at the Annual Meeting in order to pass. Virtual attendance at our Annual Meeting constitutes presence in person for purposes of quorum at the meeting. For the advisory vote to approve our executive compensation, there is no minimum approval necessary since it is an advisory vote; however, the Board of Directors will consider the results of the advisory vote when considering future decisions related to such proposal.19. 18.What is the Board'sBoard’s recommendation with regard to each proposal?The Board of Directors makes the following recommendation with regard to each proposal:•The Board of Directors recommends a vote FOR each of the director nominees.nominees named in this proxy statement.••The Board of Directors recommends a vote FOR advisory approval of the Company'sCompany’s executive compensation.••The Board of Directors recommends a vote FOR ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm.•The Board of Directors recommends a vote AGAINST the shareholder proposal seeking shareholder ratification of termination pay.••The Board of Directors recommends a vote AGAINST the shareholder proposal regarding amending the proxy access bylaw. 2022 Proxy Statement | Questions and Answers About the Annual Meeting and Voting 76 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information 20. 19.What if I do not specify a choice for a matter when returning a proxy?Shareholders should specify their choice for each matter in the manner described in the Notice or on their proxy card. If no specific instructions are given, proxies that are signed and returned will be voted:•FOR the election of all director nominees;••FOR the advisory approval of our executive compensation;••FOR the ratification of the appointment of Deloitte & Touche LLP as the Company'sCompany’s independent registered public accounting firm;•AGAINST the shareholder proposal seeking shareholder ratification of termination pay; and••AGAINST the shareholder proposal regarding the amendment to the proxy access bylaw.political contributions congruency report.20. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformation21. Are my shares voted if I do not providesubmit a proxy?If you are a shareholder of record and do not providesubmit a proxy, you must attendparticipate in the Annual Meeting in order to vote. If you hold shares through an account with a bank or broker, your shares may be voted by the bank or broker on some matters if you do not provide voting instructions. Banks and brokers have the authority under NYSE rules to vote shares for which their customers do not provide voting instructions on routine matters.matters only. The ratification of Deloitte & Touche LLP as our independent registered public accounting firm is considered a routine matter. The other matters being voted on at the Annual Meeting are not considered routine and banks and brokers cannot vote shares without instruction on those matters. Shares that banks and brokers are not authorized to vote on non-routine matters are counted as "broker“broker non-votes."22. 21.How are abstentions and broker non-votes counted?Abstentions have no effect on the election of directors. Abstentions have the effect of an "AGAINST"“against” vote on the advisory vote to approve our executive compensation, the ratification of the appointment of the Company'sCompany’s independent registered public accounting firm and the shareholder proposal.proposals. Broker non-votes have no effect on the vote for any matter at the meeting.23. 22.Does the Company have a policy about directors'directors’ attendance at the Annual Meeting of Shareholders?The Company expects all directors to attendparticipate in the Annual Meeting, absent a compelling reason.24. 23.What are the deadlines for submitting director nominees and other shareholder proposals for the 20202023 Annual Meeting?Shareholder Director Nominations for Inclusion in the Company'sCompany’s Proxy Materials (Proxy Access). To be considered for inclusion in our proxy statement for our 20202023 Annual Meeting, director nominations submitted pursuant to Section 3.04 of our Bylaws must be received at our principal executive offices at UnitedHealth Group Center, 9900 Bren Road East, Minnetonka, Minnesota 55343, Attention: Secretary to the Board of Directors, no earlier than November 21, 201923, 2022 and no later than December 21, 2019,23, 2022, and must be submitted in accordance with Section 3.04 of our Bylaws. If we do not receive the information required by our Bylaws by the deadline described above, the director nominee will be excluded from our proxy statement for our 20202023 Annual Meeting.Other Shareholder Proposals to Be Considered for Inclusion in the Company'sCompany’s Proxy Materials (SEC Rule 14a-8). To be considered for inclusion in our proxy statement for our 20202023 Annual Meeting, shareholder proposals submitted pursuant to SEC Rule 14a-8 must be received no later than December 21, 201923, 2022 and be submitted in accordance with Rule 14a-8. These shareholder proposals must be in writing and received by the deadline described above at our principal executive offices at UnitedHealth Group Center, 9900 Bren Road East, Minnetonka, Minnesota 55343, Attention: Secretary to the 2022 Proxy Statement | Questions and Answers About the Annual Meeting and Voting 77 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information Board of Directors. If we do not receive a shareholder proposal by the deadline described above, the proposal may be excluded from our proxy statement for our 20202023 Annual Meeting. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformation20202023 Annual Meeting (Advance Notice Provision). A shareholder proposal that is not submitted for inclusion in our proxy statement for our 20202023 Annual Meeting pursuant to Section 3.04 of our Bylaws or SEC Rule 14a-8 and is sought to be presented at the 20202023 Annual Meeting must comply with the "advance notice"“advance notice” deadlines in our Bylaws. As such, these shareholder proposals must be received no earlier than February 4, 2020,6, 2023, and no later than the close of business on March 5, 2020.8, 2023. These shareholder proposals must be in writing and received within the "advance notice"“advance notice” deadlines described above at our principal executive offices at UnitedHealth Group Center, 9900 Bren Road East, Minnetonka, Minnesota 55343, Attention: Secretary to the Board of Directors. These shareholder proposals must be in the form provided in our Bylaws and must include the information set forth in the Bylaws. If we do not receive a shareholder proposal and the required information by the "advance notice"“advance notice” deadlines described above, the proposal may be excluded from consideration at the 20202023 Annual Meeting. The "advance notice"“advance notice” requirement described above supersedes the notice period in SEC Rule 14a-4(c)(1) of the federal proxy rules regarding the discretionary proxy voting authority with respect to such shareholder business.25. Shareholder Solicitation of Director Nominations. In addition to satisfying the foregoing advanced notice requirements under our Bylaws, to comply with the universal proxy rules under the Exchange Act, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 7, 2023.24.How are proxies solicited and what is the cost?We bear all expenses incurred in connection with the solicitation of proxies. We have engaged Morrow Sodali LLC to assist with the solicitation of proxies for a base fee of $20,000 plus expenses. We will reimburse brokers, fiduciaries and custodians for their costs in forwarding proxy materials to beneficial owners of common stock.Our directors, officers and employees may also solicit proxies by mail, telephone and personal contact. They will not receive any additional compensation for these activities.26. 25.Where can I find more information about my voting rights as a shareholder?The SEC has an informational website that provides shareholders with general information about how to cast their vote and why voting should be an important consideration for shareholders. You may access that information athttps://www.investor.gov/research-before-you-invest/research/shareholder-voting or atwww.investor.gov.2022 Proxy Statement | Questions and Answers About the Annual Meeting and Voting 1
DirectorsCorporate
GovernanceExecutive
CompensationAuditAudit55 Annual
MeetingOther
Information Security Ownership of Certain Beneficial Owners and ManagementThe following table provides information about shareholders known to us to beneficially own more than 5% of the outstanding shares of our common stock, based solely on the information filed by such shareholders in 2019 for the year ended December 31, 2018 on Schedule 13G under the Exchange Act. Amount and Nature of
Beneficial OwnershipPercent of
Class 71,461,036 7.42 % 69,831,381 7.30 % 65,200,422 6.78 % (1)This information, including percent of class, is based on the Schedule 13G/A filed with the SEC by The Vanguard Group. Inc. on February 11, 2019. The Vanguard Group, Inc. reported having sole voting power over 1,186,163 shares, shared voting power over 225,198 shares, sole dispositive power over 70,075,335 shares and shared dispositive power over 1,385,701 shares.(2)This information, including percent of class, is based on the Schedule 13G/A filed with the SEC by BlackRock, Inc. on February 7, 2019. BlackRock, Inc. reported having sole voting power over 60,772,629 shares and sole dispositive power over 69,831,381 shares.(3)This information, including percent of class, is based on the Schedule 13G/A filed with the SEC by FMR LLC on February 13, 2019. FMR LLC reported having sole voting power over 9,280,832 shares and sole dispositive power over 65,200,422 shares. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationThe following table provides information about the beneficial ownership of our common stock as of April 9, 2019, by each director and nominee for director, each named executive officer, and by all of our current directors, executive officers and director nominees as a group. As of April 9, 2019, there were 952,244,528 shares of our common stock issued, outstanding and entitled to vote. Name of Beneficial Owner or
Identity of GroupOwnership of
Common StockNumber of Shares
Deemed Beneficially
Owned as a Result
of Equity Awards
Exercisable or Vesting
Within 60 Days of
April 9, 2019Total(1) Percent of
Common
Stock
Outstanding William C. Ballard, Jr. 72,933 (2) 5,000 77,993 * Richard T. Burke 1,762,163 (2)(3) 5,000 1,767,163 * Timothy P. Flynn 3,169 — 3,169 * Michele J. Hooper 33,754 (2) — 33,754 * F. William McNabb III 1,449 (2) — 1,449 * Valerie C. Montgomery Rice, M.D. 1,315 — 1,315 * John H. Noseworthy, M.D. 180 (2) — 180 * Glenn M. Renwick 81,031 (2) — 81,031 * Gail R. Wilensky, Ph.D. 62,941 (2) 5,000 67,941 * Stephen J. Hemsley 3,083,204 (4)(5) 551,259 3,634,463 * David S. Wichmann 849,523 (4)(5) 377,486 1,227,009 * John F. Rex 60,936 284,305 345,241 * Andrew P. Witty 451 — 451 * Steven H. Nelson 20,884 38,123 59,007 * All current directors, executive officers and director nominees as a group (17 individuals) 6,179,850 (6) 1,613,872 7,793,722 0.82% *Less than 1%.(1)Unless otherwise noted, each person and group identified possesses sole voting and dispositive power with respect to the shares shown opposite such person's or group's name. Shares not outstanding but deemed beneficially owned by virtue of the right of an individual to acquire them within 60 days of April 9, 2019, are treated as outstanding only when determining the amount and percent owned by such individual or group.(2)Includes the following number of vested DSUs which are considered owned under the Company's stock ownership guidelines for directors: Mr. Ballard — 23,693; Mr. Burke — 23,693; Mr. Flynn — 3,169; Ms. Hooper — 30,384; Mr. McNabb — 1,449; Dr. Montgomery Rice — 1,315; Dr. Noseworthy — 180; Mr. Renwick — 45,062; and Dr. Wilensky — 21,706.(3)Includes 86,000 shares held in trust for the benefit of Mr. Burke's children. Mr. Burke does not have voting or dispositive power over these shares and disclaims beneficial ownership of these shares. Also includes 1,488,500 shares held indirectly in a limited liability partnership. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformation(4)Includes the following number of shares held in trust for the individuals pursuant to our 401(k) plan: Mr. Hemsley — 316.3605; and Mr. Wichmann — 237.0823. Pursuant to the terms of the 401(k) plan, a participant has sole voting power over his or her shares; however, the plan trustee votes all unvoted shares in the same proportions as the actual proxy votes submitted by plan participants.(5)Includes 82,416.272 DSUs, 125,560 shares held in charitable foundations and 902,493 shares held in grantor retained annuity trusts, all of which are beneficially owned by Mr. Hemsley.(6)Includes the indirect holdings included in footnotes 3, 4 and 5.We have adopted "householding"“householding” procedures allowing us to deliver one Notice or single copies of proxy statements and annual reports to any household at which two or more shareholders reside who share the same last name or whom we believe to be members of the same family. Each registered shareholder living in that household will receive a separate proxy card if the householded proxy materials are received by mail.If you participate in householding but wish to receive a separate copy of the Notice, this proxy statement or our 20182021 Annual Report for the year ended December 31, 2018,2021, please notify us at: UnitedHealth Group Center, 9900 Bren Road East, Minnetonka, Minnesota 55343, Attn: Secretary to the Board of Directors, telephone (877) 536-3550. Upon written or oral request, we will deliver promptly, to any shareholder that elects not to participate in householding, a separate copy of the Notice of Internet Availability and, if a shareholder requests printed versions by mail, this proxy statement and the Annual Report on Form 10-K for the year ended December 31, 2021. You may opt-in or opt-out of householding at any time by contacting our transfer agent, EQ Shareowner Services, at P.O. Box 64854, St. Paul, Minnesota 55164-0854, telephone (800) 468-9716. Your householding election will apply to all materials mailed more than 30 days after your request is received.Your participation in the householding program is encouraged. As an alternative to householding, you may choose to receive documents electronically. Instructions for electing electronic delivery are described in Question 67 of the "Questions“Questions and Answers About the Annual Meeting and Voting"Voting” section of this proxy statement.We have been notified that some banks and brokers will household proxy materials. If your shares are held in "street name"“streetname” by a bank or broker, you may request information about householding from your bank or broker.In accordance with the requirements of advance notice described in our Bylaws, no shareholder nominations or shareholder proposals other than those included in this proxy statement will be presented at the 20192022 Annual Meeting. We know of no other matters that may come before the Annual Meeting. However, if any matters calling for a vote of the shareholders, other than those referred to in this proxy statement, should properly come before the meeting, the persons named as proxies will vote on such matters according to their individual judgment. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformationOTHER INFORMATION2022 Proxy Statement | Householding Notice | Other Matters at Meeting 79 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information Other InformationSecurity Ownership of Certain Beneficial Owners and ManagementThe following table provides information about shareholders known to us to beneficially own more than 5% of the outstanding shares of our common stock, based solely on the information filed by such shareholders in 2022 for the year ended December 31, 2021 on Schedule 13G under the Exchange Act. Name and Address of Beneficial Owner Amount and Nature of
Beneficial Ownership Percent of Class
(%) The Vanguard Group(1)
100 Vanguard Boulevard
Malvern, Pennsylvania 19355 79,483,862 8.44 BlackRock, Inc.(2)
55 East 52nd Street
New York, New York 10055 69,275,884 7.40 FMR LLC(3)
245 Summer Street
Boston, Massachusetts 02210 48,646,794 5.165 (1)This information, including percent of class, is based on the Schedule 13G/A filed with the SEC by The Vanguard Group on February 10, 2022. The Vanguard Group reported having shared voting power over 1,492,432 shares, sole dispositive power over 75,680,661 shares and shared dispositive power over 3,803,201 shares.(2)This information, including percent of class, is based on the Schedule 13G/A filed with the SEC by BlackRock, Inc. on February 1, 2022. BlackRock, Inc. reported having sole voting power over 60,804,177 shares and sole dispositive power over 69,275,884 shares.(3)This information, including percent of class, is based on the Schedule 13G/A filed with the SEC by FMR LLC on February 9, 2022. FMR LLC reported having sole voting power over 7,158,989 shares and sole dispositive power over 48,646,794 shares. 2022 Proxy Statement | Security Ownership of Certain Beneficial Owners and Management 80 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information The following table provides information about the beneficial ownership of our common stock as of April 8, 2022, by each director and nominee for director, each current named executive officer, and by all of our current directors, executive officers and director nominees as a group. As of April 8, 2022, there were 938,949,294 shares of our common stock issued, outstanding and entitled to vote. Name of Beneficial Owner or
Identity of Group Ownership of
Common Stock Number of Shares
Deemed Beneficially
Owned as a Result
of Equity Awards
Exercisable or Vesting
Within 60 Days of
April 8, 2022 Total(1) Percent of
Common
Stock
Outstanding
(%) Richard T. Burke 1,372,987(2)(3) — 1,372,987 * Timothy P. Flynn 10,097(2)(4) — 10,097 * Paul R. Garcia 2,705(2)(5) — 2,705 * Stephen J. Hemsley 1,829,816(2)(6)(7) — 1,829,816 * Michele J. Hooper 37,220(2) — 37,220 * F. William McNabb III 11,170(2) — 11,170 * Valerie C. Montgomery Rice, M.D. 3,865(2) — 3,865 * John H. Noseworthy, M.D. 3,381(2) — 3,381 * Gail R. Wilensky, Ph.D. 68,425(2)(8) — 68,425 * Andrew Witty 93,117 22,744 115,861 * John F. Rex 141,646(9) — 141,646 * Dirk C. McMahon 91,715(10) — 91,715 * Brian R. Thompson 25,206 3,037 28,243 * All current directors, executive officers and director nominees as a group (15 individuals) 3,727,016(11) 25,781 3,757,797 0.40% *Less than 1%.(1)Unless otherwise noted, each person and group identified possesses sole voting and dispositive power with respect to the shares shown opposite such person’s or group’s name. Shares not outstanding but deemed beneficially owned by virtue of the right of an individual to acquire them within 60 days of April 8, 2022, are treated as outstanding only when determining the amount and percent owned by such individual or group.(2)Includes the following number of vested DSUs which are considered owned under the Company’s stock ownership guidelines for directors: Mr. Burke — 26,792; Mr. Flynn — 6,597; Mr. Garcia — 169; Mr. Hemsley — 3,981; Ms. Hooper — 33,800; Mr. McNabb — 4,740; Dr. Montgomery Rice — 3,799; Dr. Noseworthy — 3,381; and Dr. Wilensky — 23,748.(3)Includes 1,222,500 shares held indirectly in a limited liability partnership.(4)Includes 2,000 shares held indirectly in a trust.(5)Includes 168 shares held indirectly in a trust.(6)Includes 169,116 shares held in charitable foundations.(7)Includes 328.3633 shares held in trust pursuant to our 401(k) plan. Pursuant to the terms of the 401(k) plan, a participant has sole voting power over their shares; however, the plan trustee votes all unvoted shares in the same proportions as the actual proxy votes submitted by plan participants.(8)Includes 43,735 shares held indirectly in a trust. 2022 Proxy Statement | Security Ownership of Certain Beneficial Owners and Management 81 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information (9)Includes 6,791 shares held indirectly in a trust.(10)Includes 3,500 shares held indirectly by a spouse and 23,500 shares held indirectly in a trust.(11)Includes the indirect holdings included in footnotes 3, 4, 5, 6, 7, 8, 9 and 10.Certain Relationships and TransactionsApproval or Ratification of Related-Person TransactionsThe Board of Directors has adopted a written Related-Person Transactions Approval Policy, which is administered by the NominatingGovernance Committee. A copy of the policy is available on our website atwww.unitedhealthgroup.comwww.unitedhealthgroup.com/about/corporate-governance. Under the policy, "related-person"“related-person” transactions are prohibited unless approved or ratified by the NominatingGovernance Committee. In general, a related-person transaction is any transaction or series of transactions (or amendments thereto) directly or indirectly involving:meeting one of the following categories:•ATransactions exceeding $1.00 in which both a director or an(or their immediate family member of a director in whichmember) and an executive officer of the Company is directlyparticipate; or indirectly•Transactions exceeding $120,000 in which a participant and the amount involved exceeds $1.00; or•A director, executive officer or 5% shareholder beneficially owning more than 5% of our common stock, or any of(or their respective immediate family members, in whichmember), and the Company or its subsidiaries is directlyparticipate; or indirectly a participant and the amount involved exceeds $120,000; provided that if•Transactions exceeding $1.00 in which a director isactively participates in their capacity as an executive officer of an entity that is a party to a transaction with the Company or its subsidiaries, and the director was actively involved in the transaction, then the amount shall be $1.00.Related-person transactions under the policy do not include:•Indemnification and advancement of expenses made pursuant to the Company'sCompany’s Certificate of Incorporation or Bylaws or pursuant to any agreement or instrument.••Interests arising solely from the ownership of a class of the Company'sCompany’s equity securities, if all holders of that class of equity securities receive the same benefit on a pro rata basis.•Any transactions with another corporation or organization with respect to which a related person’s only relationship is as a director or trustee.••Any transaction that involves the providing of compensation to a director or executive officer in connection with his or her duties to the Company or any of its subsidiaries, including the reimbursement of business expenses incurred in the ordinary course.Under the policy, the Company determines whether a transaction falls under the definition of a related-person transaction requiring review by the NominatingGovernance Committee. In determining whether to approve or ratify a related-person transaction, the NominatingGovernance Committee will consider, among other things, whether the terms of the related-person transaction are fair to the Company and on terms at least as favorable as would apply if the other party was not an affiliate; the business reasons for the transaction; whether the transaction could impair the independence of a director under the Company'sCompany’s Standards for Director Independence; and whether the transaction would present an improper conflict of interest for any director or executive officer of the Company.NominatingGovernance Committee who has an interest in the transaction under discussion will abstain from voting on the approval of the related-person transaction, but may, if so requested by the Chair of the NominatingGovernance Committee, participate in some or all of the Nominating Committee'sGovernance Committee’s discussions of the related-person transaction. Any related-person transaction that is not approved or ratified, as the case may be, will be voided, terminated or amended, or other actions will be taken in each case as determined by the NominatingGovernance Committee so as to avoid or otherwise address any resulting conflict of interest. 1Board ofDirectors2CorporateGovernance3ExecutiveCompensation4Audit5AnnualMeeting6OtherInformation 2022 Proxy Statement | Certain Relationships and Transactions 82 1 Board of
Directors 2 Corporate
Governance 3 Executive
Compensation 4 Audit 5 Annual
Meeting 6 Other
Information Related-Person TransactionsFees Paid to Family Member of Executive OfficerBrent Asplund, Mr. Hemsley's son-in-law, is a contractor providing technology services to Optum. The compensation paid to Mr. Asplund is consistent with the Company's overall compensation principles based on the contractor's years of experience, performance and comparable positions within the Company.Transactions with 5% ShareholdersBlackRock, Inc. beneficially owned approximately 7.30%7.40% of our common stock as of December 31, 2018.2021. The Company paid BlackRock $5.4$10.7 million for investment management fees in 2018.2021. BlackRock maintains a self-funded health insurance plan through the Company and paid the Company $2.4$4.5 million for administrative services $1.1 million for biometric screenings and lab tests and $467,800 for an employee assistance program in 2018.FMR LLC beneficially owned approximately 6.78%5.165% of our common stock as of December 31, 2018. The Company and its employees paid2021. Fidelity Management & Research Company ("Fidelity"Investments (“Fidelity”), a wholly owned subsidiary of FMR LLC, $43.1received from the Company and its employees approximately $2.0 million infor benefits management fees and approximately $234,800 for cash management, capital markets and investment management fees in 2018.2021. Fidelity maintains a self-funded health insurance plan through the Company and paid the Company $22.6 million for administrative services, $73.1approximately $16.8 million for premium payments, on behalf of affiliated entities, $6.5approximately $15.7 million for prescription drug paymentsadministrative fees, and $1.2approximately $1.7 million for an employee assistance program and wellness services in 2018.Sale of CondominiumSection 16(a) Beneficial Ownership Reporting ComplianceSection 16(a)In 2021, Andrew Witty and his wife purchased from the Company a corporate condominium located in Washington, D.C. The purchase price of $2,426,000 represented the fair market value of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than 10% of our common stock, to file initial reports of ownership and reports of changescondominium, which was appraised by an independent third party. The contract for purchase was based upon a standard template for similar real estate transactions in ownership with the SECWashington, D.C. area and the NYSE. Executive officers, directors and greater-than-10% beneficial owners are required by SEC rules to furnish us with copies of all Section 16(a) reports they file. Due to a clerical error, one Form 4 was filed one day late on behalf of the Company's Chief Accounting Officer in 2018. Exceptcontractual terms included customary, arms-length standards for the foregoing, based solely on our review of these reports and written representations from our executive officers and directors, we believe that all of our executive officers and directors complied with all Section 16(a) filing requirements during 2018.2022 Proxy Statement | Certain Relationships and Transactions 83 Appendix A — Reconciliation of Non-GAAP Financial MeasuresMeasure UNITEDHEALTH GROUP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
(in millions, except per share data)
(unaudited)ADJUSTED NET EARNINGS PER SHARE(a) Year Ended
December 31, 2021
($) Year Ended
December 31, 2020
($) GAAP net earnings attributable to UnitedHealth Group common shareholders 17,285 15,403 Intangible amortization 1,184 1,080 Tax effect of intangible amortization (288) (262) Adjusted net earnings attributable to UnitedHealth Group common shareholders 18,181 16,221 GAAP diluted earnings per share 18.08 16.03 Intangible amortization per share 1.24 1.12 Tax effect per share of intangible amortization (0.30) (0.27) Adjusted diluted earnings per share 19.02 16.88 Use of Non-GAAP Financial Measures(a)Adjusted net earnings per share is a non-GAAP financial measure. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, or superior to, financial measures prepared in accordance with GAAP.Adjusted net earnings per share excludes from the relevant GAAP net earnings per share,metric, as applicable, intangible amortization and other items, if any, that do not reflectrelate to the Company'sCompany’s underlying business performance. Management believes that the use of adjusted net earnings per share provides investors and management useful information about the earnings impact of acquisition-related intangible asset amortization. In addition, adjusted net earnings per share excludesAs amortization fluctuates based on the earnings impactsize and timing of the deferred tax revaluation recognized after The Tax Cuts and Jobs Act of 2017 was enacted in December 2017. ManagementCompany’s acquisition activity, management believes thethis exclusion of these items provides a more useful comparison of the Company'sCompany’s underlying business performance and trends from period to period. While intangible assets contribute to the Company’s revenue generation, the intangible amortization is not directly related. Therefore, the related revenues are included in adjusted earnings per share. 2022 Proxy Statement | Appendix A — Reconciliation of Non-GAAP Financial Measure 84 UNITEDHEALTH GROUPRECONCILIATION OF NON-GAAP FINANCIAL MEASURESADJUSTED NET EARNINGS AND EARNINGS PER SHARE(in millions, except per share data)(unaudited)![[MISSING IMAGE: tm223410d1-cov_obcpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm223410d1-cov_obcpn.jpg)
Year Ended December 31, 2018 Year Ended December 31, 2017 $ 11,986 $ 10,558 — (1,197 ) 899 896 (225 ) (334 ) $ 12,660 $ 9,923 $ 12.19 $ 10.72 — (1.22 ) 0.91 0.91 (0.22 ) (0.34 ) $ 12.88 $ 10.07 ![[MISSING IMAGE: tm223410d1-px_01pagebw.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm223410d1-px_01pagebw.jpg)
VIEW MATERIALS & VOTE SCAN TO UNITEDHEALTH GROUP INCORPORATED 9900 BREN ROAD EAST MINNETONKA, MN 55343 VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internetinternet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern timeTime on June 2, 2019,5, 2022, or May 29, 2019June 1, 2022 for shares held in the UnitedHealth Group 401(k) Savings Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/UNH2022 You may participate in the meeting via the internet and vote during the meeting. Have the information that is printed in the box marked by the arrow XXXX XXXX XXXX XXXX available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern timeTime on June 2, 2019,5, 2022, or May 29, 2019June 1, 2022 for shares held in the UnitedHealth Group 401(k) Savings Plan. Have your proxy card in hand when you call and follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided, or send it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717, so that it is received by June 2, 2019.5, 2022. VOTE CONFIRMATION You may confirm that your instructions were received and included in the final tabulation to be issued at the Annual Meeting on June 3, 20196, 2022 via the ProxyVote Confirmation link at www.proxyvote.com by using the information printed in the box marked by the arrow XXXX XXXX XXXX XXXX . Vote Confirmation is available 24 hours after your vote is received beginning May 20, 2019,23, 2022, with the final vote tabulation remaining available through August 2, 2019.6, 2022. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by UnitedHealth Group in mailing proxy materials, you can consent to receive all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet.internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internetinternet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E61293-P19286D82190-P67913 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY UNITEDHEALTH GROUP INCORPORATED The Board of Directors recommends you vote FOR each of the nominees for director in Proposal 1, FOR Proposal 2, and FOR Proposal 3, AGAINST Proposal 4 and AGAINST Proposal 4.5. 1. Election of Directors Nominees: For Against Abstain For Against Abstain Nominees: ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !1a. Timothy P. Flynn 1b. Paul R. Garcia 1c. Stephen J. Hemsley 1d. Michele J. Hooper 1e. F. William McNabb III 1f. Valerie C. Montgomery Rice, M.D. 1g. John H. Noseworthy, M.D.1h. Andrew Witty 2. Advisory approval of the Company’s executive compensation. 3. Ratification of the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for theforthe Company for the year ending December 31, 2019. ! ! ! ! ! ! 1a. William C. Ballard, Jr. 3. 1b. Richard T. Burke 1c. Timothy P. Flynn2022. The Board of Directors recommends you vote AGAINSTProposal 4 and AGAINST Proposal 5. For Against Abstain 4. 1d. Stephen J. Hemsley 4. The shareholder proposal set forth in the proxy statement requesting an amendment to the proxy access bylaw, ifIf properly presented at the 20192022 Annual Meeting of Shareholders. ! ! ! 1e. Michele J. Hooper 1f. F. William McNabb III 1g. Valerie C. Montgomery Rice, M.D. 1h. John H. Noseworthy, M.D. 1i. Glenn M. Renwick 1j. David S. Wichmann ! 1k. Gail R. Wilensky, Ph.D. For address changes and/or comments, please check this box and write them onShareholders, the back where indicated. Please indicate if you plan to attend this meeting. ! Yes ! Noshareholder proposal seeking shareholder ratification of termination pay. 5. If properly presented at the 2022 Annual Meeting of Shareholders, the shareholder proposal regarding political contributions congruency repor Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint ownersJointowners should each sign personally. All holders must sign. If a corporation or partnership, please sign infull corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date XXXX XXXX XXXX XXXX
![[MISSING IMAGE: tm223410d1-px_02pagebw.jpg]](https://files.docoh.com/DEF 14A/0001104659-22-048923/tm223410d1-px_02pagebw.jpg)
ADMISSION CARD 20192022 Annual Meeting of Shareholders Monday, June 3, 2019 10:6, 2022 11:00 a.m. CentralEastern Time Lower Level Conference Center 300 North LaSalle Chicago, IL 60654 PLEASE ADMIT NON-TRANSFERABLE If you plan to attendMeeting Live Via The Internet www.virtualshareholdermeeting.com/UNH2022 UnitedHealth Group will be hosting the 20192022 Annual Meeting of Shareholders, please write your name and address(the "Annual Meeting") live via the internet this year. To participate in the space provided belowAnnual Meeting live, please visit www.virtualshareholdermeeting.com/UNH2022 and present this admission card and photo identification athave the registration desk. Name: Address: ____information printed in the box marked by the arrow XXXX XXXX XXXX XXXX on the following page available to access the Annual Meeting. You may vote your proxy at any time over the Internetinternet at www.proxyvote.com or by telephone at 1-800-690-6903. Please see the reverse side of this proxy card for complete instructions on how to vote your proxy. Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting: The Notice andof Annual Meeting, Proxy Statement and Annual Report are available at www.unitedhealthgroup.com/proxymaterials. For directionsproxymaterials.Instructions on how to participate in the 2019 Annual Meeting please see the information postedare available at www.unitedhealthgroup.com/annualmeeting. E61294-P19286annualmeeting UNITEDHEALTH GROUP INCORPORATED Annual Meeting of Shareholders June 3, 2019 10:6, 2022 11:00 a.m. CentralEastern Time This proxy is solicited by the Board of Directors By signing the proxy, you revoke all prior proxies and appoint each of Dannette L. SmithRupert M. Bondy and Faraz A. ChoudhryKuai H. Leong each individually, and with full power of substitution, to vote all shares you are entitled to vote on the matters shown on the reverse side and any other matters which may properly come before the 20192022 Annual Meeting of Shareholders and all adjournments or postponements thereof. These shares of stock will be voted as you specify on the reverse side. If no choice is specified, this proxy will be voted FOR all of the nominees for director in Proposal 1, FOR Proposal 2, FOR Proposal 3, AGAINST Proposal 4 and AGAINST Proposal 4,5, and in the discretion of the named proxies on all other matters that may properly come before the meeting. Ifmeeting.If you are a current or former employee of UnitedHealth Group and own shares of common stock through the UnitedHealth Group 401(k) Savings Plan, your completion and execution of this proxy card or your submission of an Internetinternet or telephone vote will provide voting instructions to the trustee of the plan. If no direction is made, if your proxy card is not signed, or if your vote by proxy card, Internetinternet or telephone is not received by 11:59 p.m. Eastern Time on May 29, 2019,June 1, 2022, the plan shares credited to this 401(k) account will be voted by the plan trustee in the same proportions as the proxy votes which were timely and properly submitted by other plan participants. (If you noted any Address Changes/Comments above, please mark corresponding box onThis proxy is solicited by the reverse side.) ContinuedBoard of DirectorsContinued and to be signed on reverse side Address Changes/Comments: