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UnitedHealth (UNH) is in much more trouble than I realized. The stock dipped below $47 a share this morning. The company is in crisis-management mode. The WSJ reports:

UnitedHealth Group Inc.'s board, under fire for past stock-option granting practices, said it would adopt several changes to its corporate-governance policies.

The board also said it would meet Monday to act on recommendations that Chief Executive William McGuire, in a bid to respond to questions surrounding his stock options, made last week. They include terminating further equity-based awards for a small number of the company's most senior executives with large numbers of stock options already, and doing away with noncash forms of compensation.

The health-insurance titan, based in Minnetonka, Minn., has been reviewing some of its corporate-governance policies since last year. But the changes announced yesterday come amid scrutiny of the circumstances under which Dr. McGuire obtained some of the $1.6 billion in unrealized gains he holds in UnitedHealth stock options. He and at least 10 other top executives at times received options just before big run-ups in the company's share price or at the lowest price points in the year, raising questions about the timing of those grants.

Too many corporate boards are little more than rubber stamps for whatever senior management wants. How does someone get $1.6 billion stock options. That’s more than $1 a share. These policy changes are nice too see, but I think they’re a first step in a major overhaul.

Posted by edelfenbein at April 27, 2006 2:24 PM