Unlock Editor’s Digest Lock for Free
FT editor Roula Khalaf will select your favorite stories in this weekly newsletter.
The returning chief of UnitedHealth faced shareholder frustration on Monday after he led a $60 million salary package with a sharp return to the company’s top position in his first low stock trade in five years.
After being appointed CEO on May 13th, Stephen Hemsley was awarded $60 million in stock options that will begin paying in three years. The salary “stimulates serious concern,” according to the institutional shareholder services, which recommended shareholders vote for Hemsley’s compensation.
Shareholders asked the board during the meeting if Hemsley’s salary would be justified, but United Health said his compensation was appropriate. Investors have approved the paid package, the company said, but details of the vote were not available immediately.
Hemsley, 72, previously served as UnitedHealth from 2006 to 2017, overseeing the strong growth of the company and its stock. United Health has simultaneously withdrawn its revenue guidance with its return as CEO. At the company’s annual meeting on Monday, Hemsley said United Health will release new revenue guidance on the remaining July 29th of this year with its 2026 outlook.
“Obviously we’re doing things wrong,” Hemsley said of the company’s performance this year.
Meanwhile, the 11th largest shareholder of Norwegian S$1.8TN Sovereign Wealth Fund and United Health, Norwegian bank investment management, said he voted against Hemsley as he is currently in the role of CEO and chairman. The company’s stock price has fallen 40% this year, delivering its worst performance in the Dow Industrials Index.
The question of governance is just one of the challenges Hemsley faces as he regains Healthley’s leadership following the astonishing resignation of former head Andrew Whitty and the murder of senior executive Brian Thompson on December 4th.
Sources close to the company said Thompson, or “BT,” he is known within the company, is widely viewed as the candidate who is most likely to seize as CEO in the end. His murder outside a Manhattan hotel set the issue of succession in the company.
According to Morningstar, UnitedHealth is one of the world’s largest health companies, providing medical benefits to approximately 51 million people, including around 1 million outside the United States as of December 2024. It operates the pharmacy business, and its healthcare services division was the largest caregiver in the nation, Morningstar said.
UnitedHealth is fighting the US Department of Justice on an attempted $3.3 billion acquisition of rival home care providers, but is also targeted by another Department of Justice investigation into its Medicare claims. UnitedHealth says it is unaware of the new investigation. At its annual meeting, the company declined to comment on the government’s investigation, saying it had already made clear what it needed.
Recommended
Whit Mayo, an analyst at healthcare investment firm Leerink, said the company’s revenue growth was dependent on acquisitions. “The main component of (that) growth relies on inorganic engines,” he said. Now, the Department of Justice scrutiny at UnitedHealth and say, “Can they buy at the same pace?”
UnitedHealth will face challenges in the coming months, according to CFRA analyst Paige Meyer. The company was still upset from the Covid-19 pandemic, she said. “People have suspended care during the pandemic,” he said, “The cost is very high” for UnitedHealth now that people resume services.
Additional Reports by Andrew Jack of New York
