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.   )

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.

​

 

Our Story

UnitedHealth Group is a health care and well-being company with a mission to help people live healthier lives and help make the health system work better for everyone.

We have nearly 400,000 colleagues in two distinct and complementary businesses working to help build a modern, high-performing health system through improved access, affordability, outcomes and experiences.

Optum combines clinical expertise, technology and data to empower people, partners and providers with the care, guidance and tools they need to achieve better health. UnitedHealthcare offers a full range of health benefits, enabling affordable coverage, simplifying the health care experience and delivering access to high-quality care.

We work with governments, employers and providers to care for 151 million people and share a vision of a value-based system of care that provides compassionate and equitable care.

At UnitedHealth Group, our mission calls us, our values guide us and our diverse culture connects us as we seek to improve care for the consumers we are privileged to serve and their communities.

We Are

 

 

Dear Fellow Shareholders:

As 2023 progresses, UnitedHealth Group is maintaining strong momentum on our mission of helping people live healthier lives and helping the health system work better for everyone.

Optum’s clinical expertise, technology and data capabilities and UnitedHealthcare’s leadership in health benefits is helping us lead the development of a simpler, more consumer-oriented health system that delivers better outcomes for all Americans — and, in so doing, will continue to create lasting shareholder value for the decades ahead.

Our strategic growth priorities

We are prioritizing five areas that can advance our mission and drive differentiated long-term growth:

•

Value-Based Care: Accelerating the U.S. health care system’s transition to a more effective value-based model that aligns payer and providers to deliver the highest quality care at the lowest cost. Our integrated care delivery capabilities are well-positioned to enable value-based care in the clinic, the home and virtually.

​

•

Health Benefits: Providing consumers with simpler and innovative plan designs that facilitate high-quality care at a lower cost.

​

•

Health Technology: Using clinical data, intelligence and automation to help useful information flow more securely and efficiently among payers, care providers and patients, improving administrative efficiency and clinical decision-making.

​

•

Health Financial Services: Streamlining the health payments and banking experience, driving speed, reliability and trust to provide greater convenience and transparency for consumers and care providers.

​

•

Pharmacy Services: Integrating our medical, pharmacy, and behavioral capabilities to provide more affordable access to medications and support the discovery of new drugs and treatments.

​

Informed by our deep clinical expertise, these strategies present opportunities for innovation and collaboration at Optum and UnitedHealthcare — and support our long term 13% to 16% earnings per share growth rate objective.

Board updates

In 2022, UnitedHealth Group appointed Kristen Gil, vice president and business finance officer at Alphabet, Inc., to our Board of Directors. Having served in numerous senior positions at Alphabet since 2007, she brings experience in technology, artificial intelligence and consumer products. She serves on our Audit and Finance Committee.

UnitedHealth Group’s Board of Directors is 33% female and 33% racially/ethnically diverse and our average board tenure is less than 7 years. Five of our board members have been added since 2018 and 78% are independent.

Our ongoing commitment to sustainability & environmental, social and governance (ESG) initiatives

We are committed to operating as a sustainable enterprise — socially, economically, environmentally and ethically. Sustainability — especially of the health system — is ingrained in our business strategy, as our products and services deliver intrinsic social value by helping to build a health system that is more affordable and accessible, and that delivers better outcomes for everyone.

Our sustainability commitments and ESG policies and practices are overseen by the Board of Directors’ Governance Committee. Our Chief Sustainability Officer is responsible for developing a comprehensive ESG strategy and long-term sustainability commitments in partnership with our businesses and leaders across the company.

 

 

Shareholder meeting details

We cordially invite you to participate in our 2023 Annual Meeting of Shareholders to be held on Monday, June 5, 2023, at 11:00 a.m. Eastern Time. We will once again hold our meeting virtually.

Attached you will find a notice of meeting and proxy statement containing information about the items upon which you will be asked to vote and the meeting itself, including different methods you can use to vote your proxy, including by internet, telephone and mail. Every shareholder vote is important, and we encourage you to vote as promptly as possible. Instructions on how to participate in the Annual 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,

 

 

2023 Notice of Annual Meeting

​		​	​	Date June 5, 2023 11:00 a.m. Eastern Time	​
​		​	​	Location Our Annual Meeting can be accessed virtually at www.virtualshareholder meeting.com/UNH2023	​
​		​	​	Record Date April 10, 2023	​

​

Only shareholders of record of the Company’s common stock at the close of business on the record date are entitled to receive notice of, and to vote at, the Annual Meeting and any adjournments or postponements of the meeting.

​

​	IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD VIRTUALLY VIA THE INTERNET ON JUNE 5, 2023.				​
​	The Notice of Internet Availability of Proxy Materials, Notice of Annual Meeting of Shareholders, Proxy Statement and Annual Report are available at https://www.unitedhealth group.com/investors/annual- reports.html.				​

 

 

Table of Contents

​	Proxy Summary	​	​	​	​	1	​	​
​	Board of Directors	​	​	​	​	4	​	​
​	PROPOSAL 1: Election of Directors	​	​	​	​	4	​	​
​	2023 Director Nominees	​	​	​	​	4	​	​
​	Director Nomination Process	​	​	​	​	8	​	​
​	Board Leadership Structure	​	​	​	​	12	​	​
​	Director Independence	​	​	​	​	13	​	​
​	Board Committees	​	​	​	​	14	​	​
​	Board Meetings and Annual Meeting Attendance	​	​	​	​	16	​	​
​	Annual Board and Committee Evaluations	​	​	​	​	16	​	​
​	Communication with the Board of Directors	​	​	​	​	17	​	​
​	Director Compensation	​	​	​	​	17	​	​
​	2022 Director Compensation Table	​	​	​	​	20	​	​
​	Corporate Governance	​	​	​	​	22	​	​
​	Overview	​	​	​	​	22	​	​
​	Code of Conduct: Our Principles of Ethics & Integrity	​	​	​	​	24	​	​
​	Compliance and Ethics	​	​	​	​	24	​	​
​	Shareholder Engagement	​	​	​	​	24	​	​
​	Risk Oversight	​	​	​	​	25	​	​
​	Alignment of Environment, Social and Governance (ESG) with Our Long-Term Strategy	​	​	​	​	26	​	​
​	Executive Compensation	​	​	​	​	29	​	​
​	Executive Summary	​	​	​	​	29	​	​
​	Compensation Discussion and Analysis	​	​	​	​	33	​	​
​	Compensation and Human Resources Committee Report	​	​	​	​	46	​	​
​	Compensation and Human Resources Committee Interlocks and Insider Participation	​	​	​	​	46	​	​
​	2022 Summary Compensation Table	​	​	​	​	47	​	​
​	2022 Grants of Plan-Based Awards	​	​	​	​	50	​	​
​	Outstanding Equity Awards at 2022 Fiscal Year-End	​	​	​	​	52	​	​
​	2022 Option Exercises and Stock Vested	​	​	​	​	53	​	​
​	2022 Non-Qualified Deferred Compensation	​	​	​	​	54	​	​
​	Executive Employment Agreements	​	​	​	​	55	​	​

​	Potential Payments Upon Termination or Change in Control	​	​	​	​	57	​	​
​	CEO Pay Ratio	​	​	​	​	58	​	​
​	Pay vs. Performance	​	​	​	​	59	​	​
​	PROPOSAL 2: Advisory Approval of the Company’s Executive Compensation	​	​	​	​	63	​	​
​	PROPOSAL 3: Advisory Approval Regarding Frequency of Future Say-on-Pay Votes	​	​	​	​	64	​	​
​	Audit	​	​	​	​	65	​	​
​	Audit and Finance Committee Report	​	​	​	​	65	​	​
​	Disclosure of Fees Paid to Independent Registered Public Accounting Firm	​	​	​	​	67	​	​
​	Audit and Finance Committee’s Consideration of Independence of Independent Registered Public Accounting Firm	​	​	​	​	67	​	​
​	Audit and Non-Audit Services Approval Policy	​	​	​	​	67	​	​
​	PROPOSAL 4: Ratification of Independent Registered Public Accounting Firm	​	​	​	​	68	​	​
​	Annual Meeting	​	​	​	​	69	​	​
​	PROPOSAL 5: Shareholder Proposal Seeking a Third-Party Racial Equity Audit	​	​	​	​	69	​	​
​	PROPOSAL 6: Shareholder Proposal Requiring Political Contributions Congruency Report	​	​	​	​	75	​	​
​	PROPOSAL 7: Shareholder Proposal Seeking Shareholder Ratification of Termination Pay	​	​	​	​	79	​	​
​	Questions and Answers About the Annual Meeting and Voting	​	​	​	​	82	​	​
​	Householding Notice	​	​	​	​	89	​	​
​	Other Matters at Meeting	​	​	​	​	89	​	​
​	Other Information	​	​	​	​	90	​	​
​	Security Ownership of Certain Beneficial Owners and Management	​	​	​	​	90	​	​
​	Certain Relationships and Transactions	​	​	​	​	92	​	​
​	Appendix A — Reconciliation of Non-GAAP Financial Measure	​	​	​	​	94	​	​

 

​

​

 

​

 

​	Items of Business				​	​	Board’s Recommendation	​	​	Details	​
​	1	​	​	Election of Nine Directors	​	​	FOR	​	​	Page 4	​
​	2	​	​	Advisory Approval of Executive Compensation	​	​	FOR	​	​	Page 63	​
​	3	​	​	Advisory Approval Regarding Frequency of Holding Future Say-on-Pay Votes	​	​	ONE YEAR	​	​	Page 64	​
​	4	​	​	Ratification of Independent Registered Public Accounting Firm	​	​	FOR	​	​	Page 68	​
​	5	​	​	Shareholder Proposal Seeking a Third-Party Racial Equity Audit	​	​	AGAINST	​	​	Page 69	​
​	6	​	​	Shareholder Proposal Requiring a Political Contributions Congruency Report	​	​	AGAINST	​	​	Page 75	​
​	7	​	​	Shareholder Proposal Seeking Shareholder Ratification of Termination Pay	​	​	AGAINST	​	​	Page 79	​

 

Board of Directors

Our Board of Directors has nominated nine directors for election at the 2023 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.

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 2023 Annual Meeting. All then-current directors attended the 2022 Annual Meeting. We ask for your voting support for each of the director nominees at our 2023 Annual Meeting.

2023 Director Nominees

The following is a brief biographical description of each director nominee. A matrix listing the skills and areas of expertise 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 9.

 

 

 

 

Director Nomination Process

Criteria for Nomination to the Board

Our Board’s Governance Committee assesses the optimal skills, experiences, and attributes the Board should have to align it with our Company’s long-term strategic plan and the interests of our shareholders and stakeholders.

The skills matrix has two sections — the core criteria every member of the Board should meet and the skills and attributes the Board should have collectively. The core director criteria are:

•

Independence under the Company’s Standards for Director Independence, subject to waiver by the Governance Committee, and New York Stock Exchange (NYSE) listing requirements (other than the CEO and Chair of the Board);

​

•

Service on no more than three other public company boards; with our Chief Executive Officer limited to no more than one other public company board;

​

•

High integrity and ethical standards;

​

•

Standing and reputation in the individual director’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 2022 Annual Meeting except Kristen Gil, who was appointed unanimously by the Board in December 2022. With respect to that appointment, the Governance Committee considered a number of potential candidates and Kristen emerged as the finalist due to her overall skill set and experience. We consulted with an external search firm in the process that led to Kristen’s appointment.

 

Optimal Mix of Skills, Expertise and Background Information of Director Nominees

The matrix provides a number of substantive areas of expertise the Board as a whole should have. The following table displays these areas and the areas of expertise of each nominee, along with background information for each director.

 

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.

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. Our Board does not establish specific goals with respect to diversity but 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 director candidates from underrepresented communities. We currently have two female directors in Board leadership roles. 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

​

(1)

Andrew 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.

​

For this year’s election, the Board has nominated nine individuals. All are incumbent directors who collectively bring tremendous diversity to the Board in their professional experience, perspectives, 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.

Search Process for New Directors

The Governance Committee screens and recommends candidates for nomination by the full Board and maintains an active 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 Corporate Secretary.

Prior to the appointment of any new independent director, the Governance Committee considers a wide slate of potential candidates, including qualified women and diverse candidates from underrepresented communities. 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 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. According to the committee description, the Nominating Advisory Committee is expected to include approximately five individuals who are or represent a shareholder of the Company who holds a significant number of shares or who are representatives 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 2022. 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 https:// www.unitedhealthgroup.com/people-and-businesses/standards.html.

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 https://www.unitedhealthgroup.com/people-and-businesses/standards.html. For the 2024 Annual Meeting, director nominations submitted under these Bylaw provisions must be received at our principal executive offices, directed to the Corporate Secretary, no earlier than November 22, 2023 and no later than December 22, 2023.

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 Corporate Secretary in accordance with our Bylaws. The notice must include the information required by our Bylaws, which are available at https://www.unitedhealthgroup.com/people-and-businesses/standards.html. For the 2024 Annual Meeting, this notice must be received at our principal executive offices, directed to the Corporate Secretary, no earlier than February 6, 2024 and no later than March 7, 2024.

In addition to satisfying the foregoing requirements under our Bylaws, to comply with the universal proxy rules adopted by the Securities and Exchange Commission (SEC), shareholders who intend to solicit proxies in support of director nominees other than our nominees must provide notice that sets forth the information required by Rule 14a-19 of the

Securities and Exchange Act of 1934, as amended (Exchange Act).

Board Leadership Structure

Our Board of Directors believes having independent Board leadership is an important component of our governance structure because independent leadership is vital in considering the needs of our business and long-term interests of our shareholders objectively. 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.

Our Board 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, sharing of ideas between individuals having different perspectives and to maintain appropriate checks and balances. The Board evaluates its 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;

​

•

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 https://www.unitedhealthgroup.com/people-and-businesses/standards.html. The Standards for Director Independence align with the independence standards set by the NYSE.

Our Board of Directors has determined director nominees Timothy Flynn, Paul Garcia, Kristen Gil, Michele Hooper, F. William McNabb III, Valerie Montgomery Rice, M.D., and John 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.

To determine independence, and following 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:

•

Valerie Montgomery Rice is President and Chief Executive Officer of Morehouse School of Medicine. Morehouse School of Medicine paid the Company approximately $346,955 for claims software, equipment, maintenance licenses and subscriptions in 2022. The Company paid Morehouse School of Medicine approximately $337,000 for services as a network care provider in 2022. Total amounts paid by the Company to Morehouse School of Medicine during 2022 were substantially less than 1% of Morehouse School of Medicine’s total revenues for 2022. Valerie was not directly involved in these relationships.

​

 

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 committee performance annually.

The following table identifies the members of each committee as of April 10, 2023:

​

*

Michele 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, Michele has a standing invitation to attend each committee meeting but does not count for quorum purposes or vote on committee matters.

​

 

 

Board Meetings and Annual Meeting Attendance

Directors are required to attend at least 75% of Board meetings and their respective committee meetings, and the Annual Meeting of Shareholders. All of the nominees are expected to attend the 2023 Annual Meeting. During the year ended December 31, 2022, the Board of Directors held 10 meetings. All current directors attended at least 75% of the meetings, including 100% of all regularly scheduled meetings. All then current directors attended last year’s annual meeting.

Annual 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.

 

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, executive leadership, sustainability, diversity, equity and inclusion, and risk management topics.

Communication with the Board of Directors

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 Corporate Secretary as its agent to receive and review communications. The Corporate Secretary 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, https://www.unitedhealthgroup.com/people-and-businesses/standards.html.

Director Compensation

We 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 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 2022, 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’s compensation peer group and also the five large publicly traded managed care, health care and services companies included in the peer group. Following this review, the Compensation and Human Resources Committee recommended, and the Board approved, the following changes to our director compensation program, all effective October 1, 2022: (1) increasing the annual grant of stock compensation awarded to non-employee directors from $205,000 to $225,000 and (2) increasing the annual cash retainer awarded to (a) the Audit and Finance Committee Chair from $25,000 to $32,500 and (b) all other Committee Chairs from $20,000 to $25,000. No other changes were made to the compensation of non-employee directors. The prior levels of director compensation set forth in the previous sentence had been in place since October 2018. The Compensation and Human Resources 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.

 

The following table highlights the material elements of our director compensation program:

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) 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’ Compensation Deferral Plan (Director Deferral Plan). The cash retainers are in consideration of general service and responsibilities and required meeting preparation.

Stock-Based Compensation

Non-employee directors receive annual grants of DSUs under the 2020 Stock Incentive Plan having an aggregate fair value of $225,000. 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 $56,250 (the quarterly value of the annual stock compensation 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 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’s service on the Board or until they have met our stock ownership requirements. Upon completion of service, the DSUs convert into an equal number of shares of the Company’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 requirements may elect to receive common stock in lieu of DSUs and/or in-service distributions on pre-selected dates.

If directors elect to convert their 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. Directors may only elect to receive common stock if they have met the stock ownership guidelines.

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 own shares of the Company’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’ annual base cash retainer. Non-employee directors must comply with the stock ownership guidelines within five years of their appointment to the Board. All of our non-employee directors have met the stock ownership requirements or have served as a director for fewer than five years. Our directors are required to hold all DSU 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. 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 on the same terms and conditions as current employees. Upon retirement from the Board, directors may continue to obtain health care coverage under benefit continuation coverage, and after the lapse of such coverage, under the Company’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. Because there is no incremental cost to the Company, we permit on occasion a director’s family member to accompany the director on a business flight on Company aircraft provided a seat is available.

The following table provides information for the year ended December 31, 2022, relating to compensation paid to or accrued by us on behalf of our non-employee directors who served in this capacity during 2022.

 

2022 Director Compensation Table

​

(1)

Richard and Gail did not stand for re-election at the 2022 Annual Meeting of Shareholders and ceased serving as members of the Board on June 6, 2022. Kristen was appointed as a member of the Board on December 9, 2022.

​

(2)

Directors converted some or all of cash compensation payable to such director into DSUs as follows:

​

​

(3)

Directors converted some or all of cash compensation payable to such director into shares of common stock as follows:

​

​

(4)

The amounts reported: (a) include the value of DSUs issued upon conversion of annual cash retainers as described in footnote 2 above; (b) include the value of shares issued upon conversion of annual cash retainers as described in footnote 3 above; and (c) reflect the aggregate grant date fair value of the stock awards granted in 2022 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’s Annual Report on Form 10-K for the year ended December 31, 2022. For 2022, Gail elected for a portion of her annual DSU awards be granted in shares of common stock.

​

 

As of December 31, 2022, our non-employee directors held outstanding DSU awards as follows:

​

(5)

In 2022, the Company matched charitable contributions made by the following directors to charitable organizations selected by the directors pursuant to the Company’s Board Matching Program: $15,000 for Richard, Tim, Paul, Steve, Michele, Valerie, John and Gail. In 2022, the Company also paid $13,667, $8,438, $9,058, $9,122, and $558 in health care premiums on behalf of Richard, Tim, Steve, Bill and Michele, respectively.

​

 

Corporate Governance

Overview

We are committed to high standards of corporate governance and ethical business conduct. Important documents reflecting this commitment are listed below.

Corporate Governance Documents

You can access these documents at https://www.unitedhealthgroup.com/people-and-businesses/standards.html to learn more about our corporate governance practices. We will also provide copies of these documents without charge upon written request to the Company’s Corporate Secretary.

Commitment to Effective Corporate Governance