"He needs to be compensated appropriately so that his business model has believability in the market."
"A lot of the board's job is to keep him motivated."
"If we did reduce these things, Bill would take it as a signal that directors weren't enthusiastic about his leadership."
Those are quotes from members of UnitedHealth's board speaking of the compensation paid to the CEO, Dr. William McGuire. In the past six years, he's cashed in $488,000,000 from his stock options and he still has about a billion more in his portfolio. Of course, his market timing ability re the grant of his options defies the odds.
It's true that not only has he made an absolute bundle of money, but the stock has increased many-fold under his watch. So to say that the "believability" of his business model is questioned in the marketplace and only by paying him astronomical sums will he have this "believability" is grasping at straws to explain why he is overpaid. You might ask the second director quoted above as to whether he is over-motivated by such generous compensation. The third director must be someone who spoiled his kids and thinks of a CEO as still a kid.
You have to wonder how much these board members are paid. Also, you might question as to why profits at UnitedHealth are so high. What would a single payer plan do to the company? How many people could be covered with the costs and profits of companies like UnitedHealth?
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