Insurance, where the money goes
Posted by BLT (+84) 9 years ago
United Healthcare CEO Stephen Helmsley was paid 101,959,000.00 compensation this year.

One of the nations highest paid CEO's.
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Posted by Amorette Allison (+9842) 9 years ago
But we HAVE to pay him huge sums of money or he'll quit and we'll have to hire someone else and pay them less.

Disgusting, isn't it?
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Posted by Wendy Wilson (+6169) 9 years ago
One hundred million?!?!?!
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Posted by Rick Kuchynka (+4455) 9 years ago
Forbes has it listed at more like 9.

http://people.forbes.com/...sley/82872

But let's not let a silly thing like facts get in the way of the pitchforks.
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Posted by Bruce Helland (+590) 9 years ago
Guess the question is ' How much is enough?'
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Posted by Cassie (Opp-Kercheval) Walton (+43) 9 years ago
Can I apply for his job ??? I got Kristopher's hospital bill...(JUST room and board) NO labs, surgery ,or DR. bills, JUST ROOM AND BOARD was $189,517.02 for 10 days !!! kinda takes your breath away when you get a bill that big and the bills keep coming. SO Nancy Polosi when can I "quit my job and do what I truly want to do"?? I remember sitting in Kristopher's hospital room,having no idea what was wrong with my beautiful 17 year old son, when I heard Polosi say we could all quit our jobs and do what we want because we all had national health care.... DOES ANY ONE have her address??? I have a HUGE PILE of Bills I want to send her so I can quit my job and do I what I want.... spend time recovering from my son' UNTIMELY death !!!
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Posted by Bruce Helland (+590) 9 years ago
Talk to Rick. He says we dont need healthcare for all.
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Posted by Bridgier (+8297) 9 years ago
I don't think you understood what she meant. If the only place I can get decent (or any) insurance is through my employer, I'm going to be less apt to switch jobs (or start a business myself), even if the job I have isn't the best.
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Posted by Gunnar Emilsson (+13753) 9 years ago
I'm with Rick K. on this....if you people are against CEOs making a hundred million a year, then you're all a bunch of socialists!
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(tax payer taught me that in Tea Party 101....TP 101 for short)
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Posted by Amorette Allison (+9842) 9 years ago
Cassie, Nancy Pelosi meant you would be able to change jobs without worrying about health insurance. You could start your own business, for example. People keep jobs they hate and avoid striking out on their own because their health insurance is tied to their job.

If we actually had national health insurance, then we would have more freedom to start a business or change jobs or go back to school or any number of things we can't do now because we have to keep a job to keep insurance.

If the job provides insurance, mind you.
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Posted by Wendy Wilson (+6169) 9 years ago
I'm so sorry for your loss, Cassie. Use your anger for good and lobby your representatives for a single-payer national healthcare program.
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Posted by Rick Kuchynka (+4455) 9 years ago
Uh, I think I just pointed out that 100 million was an 1100% exaggeration.

I doubt there's a CEO anywhere in the country that makes $100 million (as a CEO)

But congratulations, you've determined where one one-hundredth of one-percent of United's Healthcare's revenue went.

That'll fix everything.

And they say Democratic solutions are all show and no substance
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Posted by Denise Selk (+1674) 9 years ago
The $102 million includes his exercised stock options, according to the SEC.
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Posted by Rick Kuchynka (+4455) 9 years ago
http://www.washingtonpost...01191.html

Stephen J. Hemsley exercised 4.9 million options in February 2009 at a gain of $98.6 million, the company said in a regulatory filing. The options were awarded almost a decade earlier.

After using some of the shares to pay for the transactions and cover related taxes, Hemsley held onto the stock he acquired instead of cashing it in, the company reported.

According to measurement standards used by the Securities and Exchange Commission, Hemsley's compensation for 2009 was a less stratospheric $8.9 million, up from $3.2 million in 2008. The 2009 total included a salary of $1.3 million, which was unchanged from the previous year, and a cash bonus of $2 million, up from $1.8 million the year before. It also included $5.6 million attributed to stock-related awards...

Stock options give the holder the right to buy shares at a set price, typically the price at which the stock was trading when the option was originally granted. If the market price of the stock subsequently rises, the holder can exercise the option at a gain.

Hemsley's options allowed him to buy shares for $8.72 when they were trading on the stock market at $28.94. UnitedHealth shares closed Thursday at $30.63.
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Posted by Denise Selk (+1674) 9 years ago
Yes, I think that was just what was said, without the lengthy explanation of stock options. Or did you think we needed the lesson?
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Posted by David Schott (+14412) 9 years ago
After using some of the shares to pay for the transactions and cover related taxes, Hemsley held onto the stock he acquired instead of cashing it in, the company reported.

Apparently Steve is bullish on United Healthcare. He knows they have good lobbyists in D.C.
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Posted by Rick Kuchynka (+4455) 9 years ago
I thought it would clear up that he didn't just receive 100 million dollars. He purchased that amount in stock at a discount arranged 10 years ago. He could've cashed that out many years ago, but held onto it as an investment.

Counting the reward from his long-term investment in the company as plain 'income' is misleading. Which is why the SEC doesn't consider it as part of his wage.

I'm guessing you'll see alot of similar cashing in on long-term options this year in this sector though. They know it's all downhill from here.
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Posted by David Schott (+14412) 9 years ago
Rick, do you know what the vesting schedule was on his options and the expiration date(s)? His timing may not be as noble as you think. Whatever the case, the income from those options is compensation from the company and is likely taxed as ordinary income and not as a capital gain.
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Posted by Rick Kuchynka (+4455) 9 years ago
I never said anything about noble. I'm sure he did everything he could to maximize the investment.

That said, anyone was free to invest in his company at the same time 10 years ago, at or near his option price, and they could've gotten a similarly healthy return.

It's really not that much different than if he'd just bought company stock.
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Posted by J. Dyba (+1342) 9 years ago
He actually slashed a lot of the CEO compensation when he took over the position from the guy that was running UHG before him. He drives a Volvo (at least pulled up driving one the one time I witnessed it) and doesn't move around in an entourage. The first time I met him I was really surprised at his casualness about things.

The CEO of Target needed a red carpet and trumpets the couple times I interacted with him (super nice guy though), but Stephen seems pretty laid back in person.

David, his expiration date was last year. 6 of the 8 years he had to cash them in, they were worth more.

[This message has been edited by J. Dyba (6/30/2010)]
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Posted by David Schott (+14412) 9 years ago
That said, anyone was free to invest in his company at the same time 10 years ago, at or near his option price, and they could've gotten a similarly healthy return.

He didn't invest in the company. The company put that money up for him. If the stock went down, he lost nothing. If the options were on a vesting schedule then he wouldn't have had the ability to exercise the options until they vested.

David, his expiration date was last year.

That would explain why he chose to exercise his options last year then. It's common strategy with options to hold them until expiration unless you have no faith in the stock. Since this guy apparently exercised and held his shares he must remain bullish on his company's stock.
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Posted by Rick Kuchynka (+4455) 9 years ago
From what I'm getting he came in to clean up after an accounting scandal. If he was maximizing profit he probably would've sold a couple years ago.

My guess is he waited as long as he could just to put off this exact conversation for as long as possible.

Anyway, what if, 10 years ago they'd just handed him 40 million in stock, instead of a 40 million dollar stock option. Would you still say they handed him 100 million?

In my book there's no way you can stretch the figure he was 'given' above 40 million. And it was done a decade ago.

Yes, he had more upside with the stock option, but he still had some downside too. If the stock price went down, or even stayed the same, the stock option would've been worthless.
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Posted by David Schott (+14412) 9 years ago
Rick, if they were non-qualified stock options (I don't know if they were or not) then the $100 million (the spread between the grant price and the stock price on the date he exercised) would be taxed as ordinary income. Period.

In your scenario the company gave him $40 million in capital to invest in company stock. If any of the $40 million was lost, no worries for Steve. He doesn't have to pay the company back. As soon as he exercises his options, he has to give that money back. As long as you think the company stock is going up, wouldn't you continue to invest somebody else's $40 million in money? I would.
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Posted by Rick Kuchynka (+4455) 9 years ago
The reality is, David, that when his option window opened, the assets became liquid to him, assuming they were worth anything.

As soon as the window opened, (2 years or so, as we were told) he could've cashed out and placed the difference elsewhere, if he thought there was a better investment to be had. Instead, he left it where it was. I guess he liked his company's chances. There's nothing wrong with that.

The way it actually went down, he probably would've been alot better off liquidating it 5 years earlier (in '05) and placing that money elsewhere.
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Posted by David Schott (+14412) 9 years ago
I think it's generally bad for job security for a CEO to show that he's bearish on his own company's stock.

Hemsley has been very well compensated, you can't deny that. If he drove the stock price up by improving the company's bottom line and if he improved the company's bottom line by encouraging the denial of legitimate claims or finding ways to drop sick insured... well, it makes it all the more wonderful that he's been so richly rewarded.
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Posted by J. Dyba (+1342) 9 years ago
A majority of claim denials stem from them being processed incorrectly by the admins at your doctors office.

Big Insurance is still evil but it is not as rampant as some would have you believe.
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