On July 1, 2008, California Public Employees’ Retirement System (“CalPERS”) and Alaska Plumbing and Pipefitting Industry Pension Trust (“Alaska”) announced a settlement with UnitedHealth Group Inc. and certain individual defendants for a record-breaking $895 million. Just over two months later, a settlement was also reached with the two remaining defendants – bringing the total recovery for the class to over $925 million.
In addition to the monetary recovery, UnitedHealth was also required to make critical changes to a number of its corporate governance policies, including electing a shareholder-nominated member to the company’s Board of Directors. Other key corporate governance changes included (i) enhanced standards for director independence; (ii) a mandatory holding period for options issued to executives; (iii) a shareholder approval requirement for any stock options re-pricing; and (iv) a peer group comparison requirement when establishing incentive compensation.
