Use these links to rapidly review the document
TABLE OF CONTENTS

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.           )

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

o

 

Preliminary Proxy Statement

o

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

UnitedHealth Group Incorporated

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

ý

 

No fee required.

o

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
        
 
    (2)   Aggregate number of securities to which transaction applies:
        
 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        
 
    (4)   Proposed maximum aggregate value of transaction:
        
 
    (5)   Total fee paid:
        
 

o

 

Fee paid previously with preliminary materials.

o

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount Previously Paid:
        
 
    (2)   Form, Schedule or Registration Statement No.:
        
 
    (3)   Filing Party:
        
 
    (4)   Date Filed:
        
 

Table of Contents

GRAPHIC

9900 Bren Road East, Minnetonka, Minnesota 55343

April 24, 2013

Dear Shareholder:

We cordially invite you to attend our 2013 Annual Meeting of Shareholders. We will hold our meeting on Monday, June 3, 2013, at 10:00 a.m. Eastern Time at the Seaport Boston Hotel, Constitution Conference Room, 1 Seaport Lane, Boston, Massachusetts 02210.

As a shareholder of UnitedHealth Group, you play an important role in our company by considering and taking action on the matters set forth in the attached proxy statement. We appreciate the time and attention you invest in making thoughtful decisions.

Attached you will find a notice of meeting and proxy statement that contain further information about the items upon which you will be asked to vote and the meeting itself, including:

Every shareholder vote is important, and we encourage you to vote as promptly as possible. If you cannot attend the meeting in person, you may listen to the meeting via webcast. Instructions on how to access the live webcast are included in the proxy statement.

Sincerely,

GRAPHIC

Stephen J. Hemsley
President and Chief Executive Officer

GRAPHIC

Richard T. Burke
Chairman of the Board


Table of Contents

GRAPHIC

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO THE SHAREHOLDERS OF UNITEDHEALTH GROUP INCORPORATED:

        UnitedHealth Group Incorporated (the "Company") will hold its Annual Meeting of Shareholders on Monday, June 3, 2013, at 10:00 a.m. Eastern Time at the Seaport Boston Hotel, Constitution Conference Room, 1 Seaport Lane, Boston, Massachusetts 02210. The purposes of the meeting are:

        Only shareholders of record of the Company's common stock at the close of business on April 5, 2013 are entitled to receive notice of, and to vote at, the meeting and any adjournments or postponements of the meeting.

  BY ORDER OF THE BOARD OF DIRECTORS,

 

 


GRAPHIC

 

Dannette L. Smith
Secretary to the Board of Directors

April 24, 2013

Even if you plan to attend the Annual Meeting, we still encourage you to submit your proxy by internet, telephone or mail prior to the meeting. If you later choose to revoke your proxy or change your vote, you may do so by following the procedures described under Question 13 of the "Questions and Answers about the Annual Meeting and Voting" section in the attached proxy statement.

IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 3, 2013:

The Notice of Internet Availability of Proxy Materials, Notice of Annual Meeting of Shareholders,
Proxy Statement and Annual Report are available at
www.unitedhealthgroup.com/proxymaterials.


Table of Contents


TABLE OF CONTENTS

 
  Page

Summary

  1

Proposal 1 — Election Of Directors

  4

Director Nomination Process

  4

2013 Director Nominees

  5

Corporate Governance

  8

Overview

  8

Principles of Governance

  10

Code of Conduct: Our Principles of Ethics & Integrity

  10

Compliance and Ethics

  10

Director Independence

  11

Independent Board Leadership

  12

Risk Oversight

  13

Board Meetings and Annual Meeting Attendance

  14

Board Committees

  14

Communication with the Board of Directors

  15

Executive Compensation

  16

Executive Summary

  16

Compensation Discussion and Analysis

  17

Compensation and Human Resources Committee Report

  31

2012 Summary Compensation Table

  32

2012 Grants of Plan-Based Awards

  35

Outstanding Equity Awards at 2012 Fiscal Year-End

  37

2012 Option Exercises and Stock Vested

  39

2012 Pension Benefits

  42

2012 Non-Qualified Deferred Compensation

  43

Executive Employment Agreements

  44

Potential Payments Upon Termination or Change in Control

  47

Proposal 2 — Advisory Approval of the Company's Executive Compensation

  48

Director Compensation

  50

Cash Compensation

  50

Equity-Based Compensation

  50

Stock Ownership Guidelines

  51

Other Compensation

  51

Equity Conversion Program

  51

Cash Deferral Plan

  52

2012 Director Compensation Table

  52

Certain Relationships and Transactions

  54

Approval or Ratification of Related-Person Transactions

  54

Related-Person Transactions

  54

Compensation Committee Interlocks and Insider Participation

  56

Audit Committee Report

  56

Independent Registered Public Accounting Firm

  57

Disclosure of Fees Paid to Independent Registered Public Accounting Firm

  57

Audit Committee's Consideration of Independence of Independent Registered Public Accounting Firm

  58

Audit and Non-Audit Services Approval Policy

  58

Proposal 3 — Ratification of Independent Registered Public Accounting Firm

  58

Proposal 4 — Shareholder Proposal

  58

Shareholder Proposal — Lobbying Disclosure Report

  58

Board of Directors' Recommendation

  59

Questions and Answers About the Annual Meeting and Voting

  61

Security Ownership of Certain Beneficial Owners and Management

  67

Section 16(a) Beneficial Ownership Reporting Compliance

  68

Householding Notice

  68

Other Matters at Meeting

  69

Table of Contents


SUMMARY

        This summary highlights information contained elsewhere in this proxy statement. We encourage you to review the entire proxy statement. This proxy statement and our Annual Report for the year ended December 31, 2012 are first being mailed to the Company's shareholders and made available on the internet at www.unitedhealthgroup.com/proxymaterials on or about April 24, 2013. Website addresses included throughout this proxy statement are for reference only. The information contained on our website is not incorporated by reference into this proxy statement.

UnitedHealth Group

        We are a diversified health and well-being company whose mission is to help people live healthier lives and to make the health care system work better for everyone. We achieved strong business results in 2012, including:

This strong financial performance was driven by a broad range of initiatives intended to position the Company for future growth, and a focus on fundamental execution in all our operations.


Corporate Governance

        UnitedHealth Group is committed to meeting high standards of ethical behavior, corporate governance and business conduct in everything we do, every day. This commitment has led us to implement the following practices:

 


Table of Contents

        See the "Corporate Governance" portion of this proxy statement for further information on our governance practices.

Enterprise-Wide Risk Oversight

        Our Board of Directors, assisted by its committees, oversees management's enterprise-wide risk management activities. Risk management activities include assessing and taking actions necessary to manage risk incurred in connection with the long-term strategic direction and operation of our business.


Executive Compensation

        Our executive compensation program uses a mix of base salary, annual and long-term cash incentives, equity awards and standard benefits to attract and retain highly qualified executives and maintain a strong relationship between executive pay and Company performance. Shareholders expressed strong support for our executive compensation program in the "say-on-pay" votes at our 2011 and 2012 Annual Meetings of Shareholders.

        Mr. Hemsley's total compensation is well below the CEO median of the Company's peer group, even though the Board believes his performance has been outstanding. Information regarding compensation paid to each of our named executive officers in 2012 is described in the "Compensation Discussion and Analysis" section.

        We endeavor to maintain strong governance standards in the oversight of our executive compensation policies and practices, including:

 

2


Table of Contents


Proposal 1 — Election of Directors (see pages 4-8)

        The Board has nominated eleven candidates for election to our Board of Directors. The Board recommends that shareholders vote FOR the election of each nominee.


Proposal 2 — Advisory Approval of the Company's Executive Compensation (see pages 48-50)

        The Board is seeking advisory approval of the Company's executive compensation. In considering this proposal, please read our Compensation Discussion and Analysis, which explains the Compensation Committee's compensation decisions and how our executive compensation program aligns the interests of our executive officers with those of our shareholders. Although the vote is advisory and is not binding on the Board, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation decisions. At the 2012 Annual Meeting, more than 98% of the votes cast on this proposal were in favor of our executive compensation. The Board recommends that shareholders vote FOR the approval of the Company's executive compensation.


Proposal 3 — Ratification of Independent Registered Public Accounting Firm (see page 58)

        The Audit Committee has appointed Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2013. The Board is seeking shareholder ratification of this appointment. The Board recommends that shareholders vote FOR ratification of the selection of Deloitte & Touche LLP.


Proposal 4 — Shareholder Proposal (see pages 58-61)

        We have been informed that a group of shareholders intends to introduce a resolution requesting that the Board authorize the preparation of a report addressing lobbying expenditures and oversight. The Board has concluded that the proposal is not in the best interests of the Company and its shareholders. The Board recommends that shareholders vote AGAINST the shareholder proposal.

 

3


Table of Contents


PROPOSAL 1 — ELECTION OF DIRECTORS

Director Nomination Process

Criteria for Nomination to the Board

        The Nominating and Corporate Governance Committee (the "Nominating Committee") analyzes, on an annual basis, director skills and attributes, and recommends to the Board of Directors appropriate individuals for nomination as Board members.

        The Nominating Committee developed and maintains a skills matrix to assist it in considering the appropriate balance of experience, skills and attributes required of a director and to be represented on the Board as a whole. The skills matrix is based on the Company's strategic plan and is periodically reviewed and updated by the Nominating Committee. The Nominating Committee evaluates Board candidates against the skills matrix when determining whether to recommend candidates for initial election to the Board and when determining whether to recommend currently serving directors for reelection to the Board.

        The skills matrix has two sections — a list of core criteria that every member of the Board should meet and a list of skills and attributes to be represented collectively on the Board. Following are core director criteria that should be satisfied by each director or nominee:

The skills matrix provides further that the Board as a whole should reflect diversity and have expertise in the following areas:

        Our Nominating Committee strives to maintain a balance of tenure on the Board. Long-serving directors bring valuable experience with our Company and familiarity with the challenges it has faced over the years, while newer directors bring fresh perspectives and ideas.

Diversity

        UnitedHealth Group embraces and encourages a culture of diversity and inclusion. We believe that valuing diversity makes good business sense and helps to ensure our future success. Diversity is included as one of the collective attributes in our director skills matrix. Our Board has not adopted a formal definition of diversity.

4


Table of Contents

        Our Board assesses its overall effectiveness through an annual evaluation process. This evaluation includes, among other things, an assessment of the overall composition of the Board, including the diversity of its members.

Nominating Advisory Committee

        The Board of Directors formed the Nominating Advisory Committee in 2006 to provide its Nominating Committee with additional input from shareholders and others regarding desirable characteristics of director candidates and the composition of the Board of Directors. The Nominating Committee considers, but is not bound by, input provided by the Nominating Advisory Committee. The Nominating Advisory Committee currently includes four individuals affiliated with long-term shareholders of the Company and one individual who is a member of the medical community. Members of the Nominating Advisory Committee do not receive any compensation from the Company for serving on the Nominating Advisory Committee. The Nominating Advisory Committee held one meeting in 2012. A description of the Nominating Advisory Committee can be found on the Company's website at www.unitedhealthgroup.com.

Process for Identifying and Evaluating Nominees

        In assessing currently serving directors for potential re-nomination, the Nominating Committee reviews the directors' overall performance on the Board of Directors and other relevant factors, including the factors listed above under "Criteria for Nomination to the Board."

        In considering potential candidates for election to the Board, the Nominating Committee, with input from the full Board of Directors, assesses the potential candidate's qualifications and how these qualifications fit with the desired composition of the Board of Directors as a whole. The Nominating Committee considers views expressed by members of the Nominating Advisory Committee and other shareholders regarding skill sets that would be valuable for a new director to possess. The Nominating Committee has an outside firm on retainer to assist the Committee in identifying and evaluating director candidates.

Shareholder Nominations and Recommendations for Director Candidates

        Shareholders may nominate candidates for election to the Board of Directors by submitting timely written notice to the Secretary to the Board in accordance with the Bylaws. The notice must include the information set forth in the Bylaws about each proposed nominee, including: (i) the name, age, business address, residence address and principal occupation or employment, (ii) the number of shares of the Company's common stock which are beneficially owned, and (iii) other information concerning the nominee as would be required in soliciting proxies for the election of that nominee. The notice must also include the information set forth in the Bylaws about the shareholder making the nomination and any associated person, including information about the direct and indirect ownership of, or derivative positions in, the Company's common stock and arrangements and understandings related to the proposed nomination or the voting of the Company's common stock. The notice must also include a signed consent of each nominee to serve as a director of the Company, if elected. For the 2014 Annual Meeting, this notice must be received at our principal executive offices, directed to the Secretary to the Board of Directors, on or before December 25, 2013. If we do not receive a notice and the required information regarding the shareholder and any associated person by the specified deadline, the director nomination will be void and disregarded for all purposes.

        The Company will also consider recommendations submitted by shareholders for director candidates. Recommendations should be directed to the Secretary to the Board of Directors.


2013 Director Nominees

        Our Articles of Incorporation and Bylaws provide that each member of our Board of Directors is elected annually by a majority of votes cast if the election is uncontested. The Board of Directors has nominated the eleven directors set forth below for election by the shareholders at the 2013 Annual Meeting. All of the nominees were elected by our shareholders at the 2012 Annual Meeting except for Edson Bueno, M.D., who was first elected to the Board by the Board on October 29, 2012. The Nominating Committee considered Dr. Bueno's candidacy in connection with the Company's acquisition of Amil Participações S.A. ("Amil"), which Dr. Bueno

5


Table of Contents

founded and leads. The Nominating Committee believes that, based on his experience, Dr. Bueno satisfies all of the core director criteria listed on the skills matrix except that he is not an independent director because he is the President and CEO of Amil. Dr. Bueno also has expertise in the following areas listed on the skills matrix:

The Nominating Committee believes that Dr. Bueno's experience and knowledge of international health care and integrated care systems, and training and experience as a physician and entrepreneur with deep expertise across the continuum of care, make him a strong addition to the Board. Following Dr. Bueno's appointment to the Board, we discussed his appointment with the Nominating Advisory Committee and received positive feedback.

        All of the nominees have informed the Board that they are willing to serve as directors if elected. If any nominee should decline or become unable to serve as a director for any reason, the persons named as proxies will elect a replacement.

        The Board of Directors recommends that you vote FOR the election of each of the nominees. Proxies will be voted FOR the election of each nominee unless you specify otherwise.

 
Name
  Age
  Director Since

William C. Ballard, Jr.

  72   1993
 

Edson Bueno, M.D.

  69   2012
 

Richard T. Burke

  69   1977
 

Robert J. Darretta

  66   2007
 

Stephen J. Hemsley

  60   2000
 

Michele J. Hooper

  61   2007
 

Rodger A. Lawson

  66   2011
 

Douglas W. Leatherdale

  76   1983
 

Glenn M. Renwick

  57   2008
 

Kenneth I. Shine, M.D.

  78   2009
 

Gail R. Wilensky, Ph.D.

  69   1993
 

        The director nominees, if elected, will serve until the 2014 Annual Meeting or until their successors are elected and qualified. The following is a brief biographical description of each director nominee, which includes a discussion of the skills and attributes held by each director that are reflected in the skills matrix, as described above, and that, in part, led the Board to conclude that each respective director should continue to serve as a member of the Board.

        Mr. Ballard served as Of Counsel to Greenebaum Doll & McDonald PLLC, a law firm in Louisville, Kentucky, from June 1992 until July 2008. In 1992, Mr. Ballard retired from Humana, Inc., a company operating managed health care facilities, after serving with Humana in various roles for 22 years, including as the Chief Financial Officer ("CFO") and a director. Mr. Ballard has satisfied all the core director criteria set forth in the skills matrix. Mr. Ballard also has health care industry, legal and finance/capital markets expertise and qualifies as a financial expert under applicable Securities and Exchange Commission ("SEC") regulations. Mr. Ballard currently serves as a director of Health Care REIT, Inc.

6


Table of Contents

        Dr. Bueno is the founder, President, CEO and Chairman of Amil Participações S.A., which became a subsidiary of UnitedHealth Group in October 2012. Founded in 1978, Amil is the largest health care organization in Brazil, currently assisting more than five million people. Dr. Bueno holds a medical degree from the Federal University of Rio de Janeiro, with specialization in general surgery. He has attended courses in the Business Administration program at the Pontifical Catholic University of Rio de Janeiro and management programs at Harvard Business School. Dr. Bueno has satisfied all the core director criteria set forth in the skills matrix except that he is not an independent director because he is the President and CEO of Amil. Dr. Bueno has health care industry, health care policy, brand marketing/public relations and clinical practice expertise.

        Mr. Burke is Chair of the Board of UnitedHealth Group, has been a member of our Board of Directors since inception, and was CEO of UnitedHealthcare, Inc., our predecessor corporation, until February 1988. From 1995 until February 2001, Mr. Burke was the owner, CEO and Governor of the Phoenix Coyotes, a National Hockey League team. Mr. Burke has satisfied all the core director criteria set forth in the skills matrix. Mr. Burke also has health care industry expertise and qualifies as a financial expert under applicable SEC regulations. Mr. Burke currently serves as a director of Meritage Homes Corporation. In the past five years, he has also served as a director of First Cash Financial Services, Inc.

        Mr. Darretta is the retired Vice Chair, Board of Directors, CFO and member of the Executive Committee of Johnson & Johnson, a health care products company. Mr. Darretta served as CFO and a member of the Executive Committee of Johnson & Johnson from 1997 to March 2007. Mr. Darretta joined Johnson & Johnson in 1968. Mr. Darretta has satisfied all the core director criteria set forth in the skills matrix. Mr. Darretta has corporate governance, health care industry, direct consumer markets, technology/business process and finance/capital markets expertise and qualifies as a financial expert under applicable SEC regulations. Mr. Darretta currently serves as a trustee for certain Putnam mutual funds.

        Mr. Hemsley is President and CEO of UnitedHealth Group and has served in that capacity since November 2006. He has been a member of the Board of Directors since February 2000. Mr. Hemsley joined the Company in 1997 as Senior Executive Vice President. He became Chief Operating Officer in 1998, was named President in 1999, and served as President and Chief Operating Officer from 1999 to November 2006. Mr. Hemsley has satisfied all the core director criteria set forth in the skills matrix except that he is not an independent director because he is our CEO. Mr. Hemsley has health care industry, finance and technology/business process expertise.

        Ms. Hooper is President and CEO of The Directors' Council, a private company she co-founded in 2003 that works with corporate boards to increase their independence, effectiveness and diversity. She was President and CEO of Voyager Expanded Learning, a developer and provider of learning programs and teacher training for public schools, from 1999 until 2000. Prior to that, she was President and CEO of Stadtlander Drug Company, Inc., a provider of disease-specific pharmaceutical care, from 1998 until Stadtlander was acquired in 1999. Ms. Hooper has satisfied all the core director criteria set forth in the skills matrix and is a nationally recognized corporate governance expert. She also has health care industry expertise and qualifies as a financial expert under applicable SEC regulations. Ms. Hooper currently serves as a director of PPG Industries, Inc. In the past five years, she also served as a director of AstraZeneca plc. and Warner Music Group Corp.

        Mr. Lawson served as President of Fidelity, the world's largest mutual fund company, from August 2007 to March 2010. Prior to joining Fidelity, Mr. Lawson was Vice Chairman of Prudential Financial from 2002 to 2007 where he was responsible for the International Operating Division and for Global Marketing Communications. Mr. Lawson served as Executive Vice President of Prudential from 1996 to 2002. Prior to joining Prudential, Mr. Lawson was President and CEO of VanEck Global from June 1994 to June 1996. Mr. Lawson was Managing Director and Partner-in-Charge of Private Global Banking and Mutual Funds at Bankers Trust from January 1992 to April 1994. Mr. Lawson was a Managing Director and CEO at Fidelity Investments — Retail from May 1985 to May 1991, and President and CEO at Dreyfus Service Corporation from May 1982 to May 1985. Mr. Lawson has satisfied all the core director criteria set forth in the skills matrix. Mr. Lawson has corporate governance, direct consumer marketing, finance/capital markets, brand marketing/public relations and technology/business process expertise and qualifies as a financial expert under applicable SEC regulations. We believe that Mr. Lawson's past experience as an executive at a major institutional investor is also of significant value to the Board. Mr. Lawson currently serves as a director of E*TRADE Financial Corporation.

7


Table of Contents

        Mr. Leatherdale served as the Chair and CEO of The St. Paul Companies, Inc. (currently known as Travelers Companies, Inc.), a property casualty insurance company, from 1990 until he retired in October 2001. Mr. Leatherdale has satisfied all the core director criteria set forth in the skills matrix. Mr. Leatherdale has corporate governance and finance/capital markets expertise and qualifies as a financial expert under applicable SEC regulations. In the past five years Mr. Leatherdale has also served as a director of Xcel Energy Inc.

        Mr. Renwick is President and CEO of The Progressive Corporation, an auto insurance holding company. Before being named CEO in 2001, Mr. Renwick served as CEO-Insurance Operations and Business Technology Process Leader from 1998 through 2000. Prior to that, he led Progressive's Consumer Marketing group and served as President of various divisions within Progressive. Mr. Renwick joined Progressive in 1986 as Auto Product Manager for Florida. Mr. Renwick has satisfied all the core director criteria set forth in the skills matrix. Mr. Renwick has corporate governance, health care industry, direct consumer markets, finance/capital markets, brand marketing/public relations and technology/business process expertise and qualifies as a financial expert under applicable SEC regulations. Mr. Renwick currently serves as a director of Fiserv, Inc. and The Progressive Corporation.

        Dr. Shine has been the Executive Vice Chancellor for Health Affairs of the University of Texas System (the "UT System"), which consists of nine academic campuses and six health institutions, since November 2003. Dr. Shine served as the interim Chancellor of the UT System from May 2008 until February 2009. Dr. Shine served as President of the Institute of Medicine at the National Academy of Sciences from 1992 until 2002. From 1993 until 2003, Dr. Shine served as a Clinical Professor of Medicine at the Georgetown University School of Medicine. From 1971 until 1992, Dr. Shine served in several positions at the University of California at Los Angeles School of Medicine, with his final position being Dean and Provost, Medical Sciences, and he continues to hold the position of Professor of Medicine Emeritus. Dr. Shine has also served as Chair of the Council of Deans of the Association of American Medical Colleges from 1991 until 1992 and as President of the American Heart Association from 1985 until 1986. Dr. Shine has satisfied all the core director criteria set forth in the skills matrix. He also is a nationally recognized cardiologist and has health care policy and clinical practice expertise.

        Dr. Wilensky has been a senior fellow at Project HOPE, an international health foundation, since 1993. From 2008 to 2009, Dr. Wilensky was President of the Department of Defense Health Board and chaired its sub-committee on health care delivery. From December 2006 to December 2007, Dr. Wilensky co-chaired the Department of Defense Task Force on the Future of Military Health Care. During 2007 she also served as a commissioner on the President's Commission on Care for America's Returning Wounded Warriors. From May 2001 to May 2003, she was the Co-Chair of the President's Task Force to Improve Health Care for our Nation's Veterans. From 1997 to 2001, she was also Chair of the Medicare Payment Advisory Commission. From 1992 to 1993, Dr. Wilensky served as the Deputy Assistant to President George H. W. Bush for policy development, and from 1990 to 1992, she was the Administrator of the Health Care Financing Administration (now known as the Centers for Medicare and Medicaid Services) directing the Medicaid and Medicare programs for the United States. Dr. Wilensky has satisfied all the core director criteria set forth in the skills matrix. She also is a nationally recognized health care economist and has health care policy expertise. Dr. Wilensky currently serves as a director of Quest Diagnostics Incorporated. In the past five years, she has also served as a director of Cephalon, Inc., Gentiva Health Services, Inc. and SRA International Inc.


CORPORATE GOVERNANCE

Overview

        UnitedHealth Group is committed to high standards of corporate governance and ethical business conduct. Important documents that are reflective of this commitment include our Articles of Incorporation, Bylaws, Principles of Governance, Board of Directors Committee Charters, Standards for Director Independence, Code of Conduct: Our Principles of Ethics & Integrity, Related-Person Transactions Approval Policy, Board of Directors Communication Policy, Political Contributions Policy and Corporate Environmental Policy. You can access these documents at www.unitedhealthgroup.com to learn more about our corporate governance practices. Our key corporate governance practices are highlighted below.

8


Table of Contents

Board Structure and Shareholder Rights

Board and Board Committee Composition and Performance

Guidelines and Board Policies

9


Table of Contents

Independent Auditors


Principles of Governance

        Our Articles of Incorporation and Bylaws, together with Minnesota law and NYSE and SEC rules, govern the Company. Our Principles of Governance set forth many of the practices, policies and procedures that provide the foundation for our commitment to strong corporate governance. The policies and practices covered in our Principles of Governance include shareholder rights and proxy voting; structure, composition and performance of the Board of Directors; use of an independent compensation consultant; stock ownership and retention requirements; Board of Directors operation; individual director responsibilities; and Board committees. Our Principles of Governance are reviewed at least annually by our Nominating Committee and are revised as necessary.


Code of Conduct: Our Principles of Ethics & Integrity

        The Code of Conduct: Our Principles of Ethics & Integrity is posted on the Company's website and covers our principles and policies related to business conduct, conflicts of interest, public disclosure, legal compliance, reporting and accountability, corporate opportunities, confidentiality, fair dealing and protection and proper use of Company assets. Any waiver of the Code of Conduct for the Company's executive officers, senior financial officers or directors may be made only by the Board of Directors or a committee of the Board. We will publish any amendments to the Code of Conduct and waivers of the Code of Conduct for an executive officer or director on the Company's website.


Compliance and Ethics

        We strongly encourage employees to raise ethics and compliance concerns, including concerns about accounting, internal controls or auditing matters. We offer several channels for employees and third parties to report ethics and compliance concerns or incidents, including by phone or online, and individuals may choose to remain anonymous in jurisdictions where anonymous reporting is permissible. We prohibit retaliatory action against any individual who in good faith raises concerns or questions regarding ethics and compliance matters or reports suspected violations. We train all employees and periodically advise them regarding the means by which they may report possible ethics or compliance issues and their affirmative responsibility to report any possible issues. In our latest employee survey, 97% of employees said they knew what to do if they believed unethical behavior or misconduct occurred in their work area.

10


Table of Contents


Director Independence

        Our Board of Directors has adopted the Company's Standards for Director Independence, which are available on the Company's website at www.unitedhealthgroup.com. The Standards for Director Independence requirements exceed the independence standards set by the NYSE.

        Our Board of Directors has determined that William C. Ballard, Jr., Richard T. Burke, Robert J. Darretta, Michele J. Hooper, Rodger A. Lawson, Douglas W. Leatherdale, Glenn M. Renwick, Kenneth I. Shine, M.D. and Gail R. Wilensky, Ph.D. are each "independent" under the NYSE rules and the Company's Standards for Director Independence and have no material relationships with the Company that would prevent the directors from being considered independent. Stephen J. Hemsley, the Company's President and CEO, and Edson Bueno, M.D., the President and CEO of the Company's subsidiary, Amil, are not independent directors.

        In determining independence, the Board of Directors considered, among other factors, all of the business relationships between the Company and our directors and nominees, their immediate family members (as defined by the NYSE) and their affiliated companies. The Board of Directors considered whether any director or any nominee was a director, partner, significant shareholder or executive officer of an organization that has a relationship with the Company, and also considered charitable contributions that the Company or its affiliates made to organizations with which such directors or nominees are or have been associated. In particular, the Board of Directors evaluated the following relationships and determined that such relationships were in the normal course of business and did not impair the directors' exercise of independent judgment:

11


Table of Contents

The Board of Directors also considered relationships between the Company and organizations on which our outside directors or their immediate family members serve only as directors and determined that such relationships did not impair the directors' exercise of independent judgment.


Independent Board Leadership

        Our Board of Directors believes that having independent Board leadership is an important component of our governance structure. As such, our Bylaws require the Company to have either an independent Chair of the Board or a Lead Independent Director. The Company believes the current leadership structure delineates the separate roles of managers and directors. Our CEO sets the strategic direction for the Company, working with the Board, and provides day-to-day leadership; our independent Chair of the Board leads the Board in the performance of its duties and serves as the principal liaison between the independent directors and the CEO. In addition to these overall differences in duties, our Principles of Governance outline the specific duties of the Chair of the Board or a Lead Independent Director, including:

12


Table of Contents


Risk Oversight

Enterprise-Wide Risk Oversight

        Our Board of Directors oversees management's enterprise-wide risk management activities. Risk management activities include assessing and taking actions necessary to manage risk incurred in connection with the long-term strategic direction and operation of our business. Each director on our Board is required to have risk oversight ability for each skill and attribute the director possesses that is reflected in the collective skills section of our director skills matrix described in "Proposal 1 — Election of Directors — Director Nomination Process — Criteria for Nomination to the Board" above. Collectively, our Board of Directors uses its committees to assist in its risk oversight function as follows:

        Our Board of Directors maintains overall responsibility for oversight of the work of its various committees by receiving regular reports from the Committee Chairs regarding their work. In addition, discussions about the Company's strategic plan, consolidated business results, capital structure, merger and acquisition related activities and other business discussed with the Board of Directors include a discussion of the risks associated with the particular item under consideration.

Enterprise-Wide Incentive Compensation Risk Assessment

        Our Compensation Committee requested that management conduct a risk-assessment of the Company's enterprise-wide compensation programs. The risk assessment reviewed both cash incentive compensation plans and individual cash incentive awards paid in 2012 for the presence of potential design elements that could incent employees to incur excessive risk, the ratio and level of incentive to fixed compensation, the amount of manager discretion, the percentage of compensation expense as compared to the business units' revenues, and the presence of other design features that serve to mitigate excessive risk-taking, such as the Company's clawback policy, stock ownership guidelines, multiple performance measures, caps on individual or aggregate payments and similar features. The Compensation Committee also receives an annual report on the Company's compliance with its equity award program controls.

        After considering the results of the risk assessment, management concluded that the level of risk associated with the Company's enterprise-wide compensation programs is not reasonably likely to have a material adverse effect on the Company. The results of the risk assessment were reviewed with the Compensation Committee at its February 2013 meeting. Please see "Compensation Discussion and Analysis" for a discussion of compensation design elements intended to mitigate excessive risk-taking by our executive officers.

13


Table of Contents


Board Meetings and Annual Meeting Attendance

        Directors are expected to attend Board meetings, meetings of committees on which they serve and the Annual Meeting of Shareholders. Nine of the ten then-serving directors attended the 2012 Annual Meeting. During the year ended December 31, 2012, the Board of Directors held ten meetings. All of our directors attended at least 75% of the meetings of the Board and any Board committees of which they were members for the period for which they served as directors in 2012.


Board Committees

        The Board of Directors has established four standing committees: the Audit Committee, the Compensation Committee, the Nominating Committee and the Public Policy Committee. These committees help the Board of Directors fulfill its responsibilities and assist the Board of Directors in making informed decisions. Each committee operates under a written charter, and evaluates its charter and conducts a committee performance evaluation annually.

 
Director
  Audit
  Compensation and
Human Resources

  Nominating and
Corporate Governance

  Public Policy Strategies
and Responsibility

William C. Ballard, Jr.

      X   X    
 

Edson Bueno, M.D.

               
 

Richard T. Burke*

               
 

Robert J. Darretta

  X   X        
 

Stephen J. Hemsley

               
 

Michele J. Hooper

  X       Chair    
 

Rodger A. Lawson

      X        
 

Douglas W. Leatherdale

      Chair   X   X
 

Glenn M. Renwick

  Chair            
 

Kenneth I. Shine, M.D.

              X
 

Gail R. Wilensky, Ph.D.

              Chair
 
*
Mr. Burke is the Chair of the Board and ex-officio member of each Board committee. As an ex-officio member, Mr. Burke has a standing invitation to attend each Board committee meeting, but does not count for quorum purposes or vote on committee matters.

Audit Committee

        The Audit Committee consists of Messrs. Renwick (Chair) and Darretta and Ms. Hooper, each of whom is an independent director under the NYSE listing standards and the SEC rules. The Board of Directors has determined that Messrs. Renwick and Darretta and Ms. Hooper are "audit committee financial experts" as defined by the SEC rules. The Audit Committee has responsibility for the selection and retention of the independent registered public accounting firm, and assists the Board of Directors by overseeing financial reporting and internal controls, public disclosure and compliance activities. The Audit Committee also oversees management's processes to identify and quantify material risks facing the Company. The Audit Committee operates as a direct line of communication between the Board of Directors and our independent registered public accounting firm, as well as our internal audit, compliance and legal personnel. The Audit Committee held ten meetings in 2012.

Compensation and Human Resources Committee

        The Compensation Committee consists of Messrs. Leatherdale (Chair), Ballard, Darretta and Lawson, each of whom is an independent director under the NYSE listing standards, a non-employee director under the SEC rules and an outside director under the Internal Revenue Code of 1986 (the "Internal Revenue Code"). The

14


Table of Contents

Compensation Committee is responsible for overseeing our policies and practices related to total compensation for executive officers, the administration of our incentive and equity-based plans and the risk associated with our compensation practices and plans. The Compensation Committee also establishes our employment arrangements with our CEO and other executive officers, conducts an annual performance review of the CEO, and reviews and monitors director compensation programs and the Company's stock ownership guidelines. The Compensation Committee held ten meetings in 2012.

Nominating and Corporate Governance Committee

        The Nominating Committee consists of Ms. Hooper (Chair) and Messrs. Ballard and Leatherdale, each of whom is an independent director under the NYSE rules. The Nominating Committee's duties include identifying and nominating individuals to be proposed as nominees for election as directors at each Annual Meeting or to fill Board vacancies, conducting the Board evaluation process, evaluating the categorical standards which the Board of Directors uses to determine director independence, and monitoring and evaluating corporate governance. The Nominating Committee also oversees Board processes and corporate governance-related risk. The Nominating Committee held five meetings in 2012.

Public Policy Strategies and Responsibility Committee

        The Public Policy Committee consists of Dr. Wilensky (Chair), Mr. Leatherdale and Dr. Shine. The Public Policy Committee is responsible for assisting the Board of Directors in fulfilling its responsibilities relating to the Company's public policy, health care reform and modernization activities, political contributions, government relations, community and charitable activities and corporate social responsibility. The Public Policy Committee is also responsible for overseeing the risks associated with these activities. The Public Policy Committee held four meetings in 2012.


Communication with the Board of Directors

        The Board of Directors values the input and insights of our shareholders and other interested parties and believes that effective communication strengthens the Board of Directors' role as an active, informed and engaged fiduciary. The Board of Directors has adopted a Board of Directors Communication Policy to facilitate communication between shareholders and other interested parties and the Board. Under this policy, the Board of Directors has designated the Company's Secretary to the Board of Directors as its agent to receive and review communications.

        The Secretary to the Board of Directors will not forward to the directors communications received which are of a personal nature or not related to the duties and responsibilities of the Board of Directors, including, without limitation, junk mail, mass mailings, business solicitations, routine customer service complaints, new product or service suggestions, and opinion survey polls. The Secretary to the Board of Directors will forward such complaints and suggestions received to the appropriate members of the Company's management.

        Appropriate matters to raise in communications to the Board include:

        The policy, including information on how to contact the Board of Directors, may be found in the corporate governance section of the Company's website, www.unitedhealthgroup.com.

15


Table of Contents


EXECUTIVE COMPENSATION

Executive Summary

        UnitedHealth Group's compensation program is designed to attract and retain highly qualified executives and to maintain a strong link between pay and the achievement of enterprise-wide goals. We emphasize and reward teamwork and collaboration among executive officers, which we believe produces Company growth and performance, optimizes the use of enterprise-wide capabilities, drives efficiencies and integrates products and services for the benefit of our customers and other stakeholders.

        In determining 2012 executive compensation, the Compensation Committee considered the Company's strong growth, operating performance and financial results, all of which were achieved in a challenging economic environment, as well as individual executive performance. Some of our key business results for 2012 were:

        As described in the Compensation Discussion and Analysis, this strong financial performance was driven by a broad range of initiatives intended to position the Company for future growth, and a focus on fundamental execution in all our operations.

        The Compensation Committee believes that total compensation for the executive officers listed in the 2012 Summary Compensation Table (the "named executive officers") should be heavily weighted toward long-term performance-based compensation, and this was the case for 2012. The elements of compensation for our named executive officers were unchanged from 2011, and in 2012, long-term compensation represented approximately 70% of the total mix of compensation granted to our named executive officers.

        As discussed in detail below and reflected in the 2012 Summary Compensation Table, in 2012, the Compensation Committee determined that our CEO, Mr. Hemsley, should receive the following compensation:

16


Table of Contents

        The Compensation Committee believed this compensation was appropriate to recognize Mr. Hemsley's overall leadership in positioning the Company for long-term success during a period of significant change and modernization in the health care marketplace. In particular, the Committee recognized the CEO's strategic leadership of the Company including his leadership in enhancing the Company's reputation and fostering the Company's ethical culture. Although Mr. Hemsley's total compensation is below the CEO median in the Company's peer group, the Compensation Committee and Mr. Hemsley agree that the total compensation awarded is sufficient to retain and motivate him.

        We endeavor to maintain strong governance standards in the oversight of our executive compensation policies and practices, including the following policies and practices that were in effect during 2012:

Compensation Discussion and Analysis

Philosophy and Objectives of our Compensation Program

        We seek to attract and retain highly qualified executives and establish a strong pay-for-performance alignment by linking senior management compensation to enterprise goals. The primary objectives of our executive compensation program are to:

17


Table of Contents

Compensation Program Principles

        Our Compensation Committee uses the following principles to implement our compensation philosophy and achieve our executive compensation program objectives:

Determination of Total Compensation

Role of the Compensation Committee

        The Compensation Committee oversees the Company's policies and philosophy related to total compensation for executive officers. The Compensation Committee approves the compensation for the named executive officers based on its own evaluation, input from our CEO (for all executive officers except for himself), internal pay equity considerations, the tenure and performance of each named executive officer, input from its independent consultant and market data.

        In addition, in making compensation decisions, the Compensation Committee considers the results of the Company's annual shareholder advisory votes approving the Company's executive compensation. At our 2011 and 2012 Annual Meetings, more than 97% and 98%, respectively, of the votes cast were in favor of the Company's executive compensation. The Compensation Committee believes these shareholder votes indicate strong support for the Company's executive compensation program.

The Compensation Committee's Use of an Independent Compensation Consultant

        The Compensation Committee retains a separate independent compensation consultant, Jon Weinstein of Pay Governance LLC, to advise the Compensation Committee on executive and director compensation matters, assess total compensation program levels and program elements for executive officers and evaluate competitive compensation trends. Pay Governance does not provide any other services to the Company and does not perform any work for management. The Compensation Committee has assessed the independence of Pay Governance, specifically considering the six factors contained in the SEC rules, and concluded that Pay Governance's work for the Compensation Committee does not raise any conflict of interest.

Competitive Positioning

        The Compensation Committee believes that total compensation for named executive officers should be heavily weighted toward long-term performance-based compensation, but it does not target a specific mix of annual and long-term compensation or cash and equity compensation.

        In general, the Compensation Committee's goal is to achieve total compensation for the named executive officers as a group that falls within a range of the 50th to 75th percentiles of the market data for our peer group (as discussed below) if paid at target. Target total compensation of our named executive officers as a group in 2012, consisting of base salary, target annual cash incentive award, target long-term cash incentive award and the grant date fair value of equity awards (including performance shares at target), resulted in a target compensation opportunity for our named executive officers as a group between the median and the 75th percentile of the market data for our peer group.

18


Table of Contents

        In 2012, the Compensation Committee requested that Pay Governance update its review of the peer group data that was conducted in 2011 to ensure that competitive compensation data was:

        The Compensation Committee determined to continue to use market data developed from a broad industry group of premier companies. This group is developed by Pay Governance as follows:

Neither directors nor management participates in the selection of the companies in the peer group and the Compensation Committee is not made aware of the companies in the peer group until the independent compensation consultant presents its benchmarking results to the committee.

        In 2012, the Compensation Committee also considered market data from the five largest publicly traded managed care companies with which we compete for business. The Compensation Committee does not use this group of managed care companies as a primary reference point for benchmarking compensation practices, however, because the Company is substantially larger, more complex and more diverse than these companies, and because we believe that the Company competes primarily for talent and capital with other successful large companies across a broader group of industries. The companies that were included in the 2012 peer group and the five managed care companies are listed at the end of this Compensation Discussion and Analysis.

Role of Management and CEO in Determining Executive Compensation

        The Compensation Committee has the responsibility to approve and monitor all compensation for our executive officers. Management recommends appropriate enterprise-wide financial and non-financial performance goals for use in incentive compensation. Our CEO assists the Compensation Committee by evaluating the performance of the executive officers that report directly to him and recommending compensation levels for these executive officers. Our CEO does not, however, make recommendations regarding his own compensation.

Use of Tally Sheets and Wealth Accumulation Analysis

        When approving compensation decisions, the Compensation Committee reviews tally sheet information for each of our executive officers. These tally sheets are prepared by management and quantify the elements of each executive officer's total compensation. The tally sheets include a summary of all equity awards previously granted to each executive officer, the gain realized from past vesting or exercise of equity awards, the projected value of accumulated equity awards based upon various stock price scenarios, and compensation to be paid under various potential employment termination scenarios. This is done to effectively analyze the compensation each executive officer has accumulated to date and to fully understand the amount the executive officer could accumulate in the future.

19


Table of Contents

Elements of our Compensation Program

Overview

        The compensation program for our named executive officers consists of the following elements:

Compensation Element
  Objective
  Type of Compensation
Base salary   To provide a base level of cash compensation for executive officers   Annual compensation, not variable

 
Annual cash incentive awards   To encourage and reward executive officers for individual performance and for achieving annual corporate performance goals   Annual performance compensation, variable

 
Long-term cash incentive awards   To encourage and reward executive officers for achieving three-year corporate performance goals   Long-term performance compensation, variable

 
Equity awards   To motivate and retain executive officers and align their interests with shareholders through the use of:   Long-term performance compensation, variable
   

Performance shares to motivate sustained performance and growth and potentially assist executives in building ownership in the Company; and

   
   

RSUs to retain executive officers and build stock ownership positions

   

 
Employee benefits   To promote health, well-being and financial security of employees, including executive officers; constitutes the smallest part of total remuneration   Annual indirect compensation, not variable

 

Annual Compensation

        The Compensation Committee generally determines base salary levels for our named executive officers early in the fiscal year, with changes becoming effective during the first quarter of the fiscal year. For 2012, the Compensation Committee made no changes to base salary for our named executive officers.

        Annual cash incentive awards may be paid if our Company meets or exceeds annual performance goals as determined by the Compensation Committee for that year. In establishing the performance measures for the 2012 annual cash incentive awards in early 2012, the Compensation Committee sought to align broadly the compensation of our executive officers to key elements of the Company's 2012 business plan. Development of the Company's 2012 business plan was a robust process that involved input from all of the Company's business units and was reviewed with the Company's Board of Directors in the fourth quarter of 2011 and the first quarter of 2012. These performance measures are based on enterprise-wide measures because the Compensation Committee believes that the named executive officers share the responsibility to support the goals and performance of the Company as key members of the Company's leadership team. At the target level, the financial performance goals were consistent with or higher than the 2012 financial outlook presented publicly in

20


Table of Contents

November 2011 at the Company's annual investor conference. The following table sets forth the performance measures and goals established, as well as actual 2012 performance results:

2012 Performance Measure
  Weight
  Threshold
Performance

  Target
Performance

  Maximum
Performance

  Actual 2012
Performance

Revenue*   1/3     $105.213 billion      $110.750 billion   $116.288 billion   $108.788 billion

 
Operating Income*
Cash Flows from Operations*
  1/3     $7.408 billion
$5.780 billion
  $8.715 billion
$6.800 billion
  $10.022 billion
$7.820 billion
  $9.243 billion
$7.148 billion

 
Stewardship:

Customer and Physician Satisfaction

Employee Engagement

Employee Teamwork

  1/3     2 points below 2012 target for customer and physician satisfaction and employee teamwork; 4 points below 2012 target for employee engagement   2011 results except that employee teamwork is 1 point above 2011 results   2 points above 2012 target   At 2012 target or between 2012 target and maximum

 
*
The Company's annual incentive plan allows for adjustments to the Company's reported earnings for the impact of changes in accounting principles, extraordinary items and unusual or non-recurring gains or losses, including significant differences from the assumptions contained in the financial plan upon which the incentive targets were established. Adjustments to reported earnings are intended to better reflect executives' line of sight/ability to affect payouts, align award payments with growth of the Company's business, avoid artificial inflation or deflation of awards due to unusual or non-recurring items in the applicable period and emphasize the Company's preference for long-term and sustainable growth. The actual 2012 revenue, operating income and cash flows from operations results were adjusted downward from the Company's GAAP results as reported in our Annual Report on Form 10-K for the year ended December 31, 2012 to exclude results related to certain acquisitions that were not contemplated in our annual plan.

        The 2012 financial performance measures at target level represented year-over-year growth in revenues of $6.0 billion and year-over-year growth in operating income of $86 million, but also included an expected year-over-year decline in operating cash flows of $268 million. This reflected the Company's view that there would be a continued difficult business environment in 2012, including expectations that:

        The 2012 non-financial performance measures at target level represented stable performance or an increase over 2011 in all categories. These measures were viewed to be important to obtaining longer-term financial successes that might not be immediately reflected in annual financial results. The Compensation Committee was of the view that the breadth of financial and non-financial performance measures for the 2012 annual cash incentive award would motivate the executive officers to achieve results that should contribute to value creation for our shareholders on a long-term basis and avoid excessive risks.

21


Table of Contents

        At the beginning of 2012, the Committee believed that achievement of the annual incentive goals required substantial performance on a broad range of initiatives contained in the 2012 business plan. These initiatives included the following:

        The Company made substantial progress with regard to these initiatives. In addition to these initiatives, the Company completed its procurement of the TRICARE West region managed care support contract, which resulted in increased implementation expenses incurred in 2012 in advance of assumption of this business in April 2013. As a result of our strong business performance in 2012, operating income and cash flows for 2012 were significantly above target levels. Revenues were slightly below target because the Company's membership growth in its Part D and Medicare Advantage businesses were below internal goals. Non-financial performance measures were at or above target levels. Our 2012 financial results represented increases over 2011 results in every measure. Earnings per share increased 12% in 2012, and the Company's total shareholder return was 8.6%, reflecting continued successful performance in an uncertain environment.

        While the program uses defined performance measures and weightings to determine an overall funding level for the Company's bonus pool, individual annual cash incentive awards are not purely formulaic. In determining the amount of the actual annual incentive award to be paid, the Committee considers the CEO's recommendations for executive officers other than himself, the business performance underlying each of the measures, macroeconomic factors disproportionately impacting business performance, individual executive performance factors, market positioning, teamwork and related matters. The Compensation Committee retains discretion to pay an annual incentive award that is higher or lower than the performance level achieved based on these considerations if threshold performance is achieved on any performance measure. However, the overall pool cannot be exceeded.

        At the beginning of each year, the Compensation Committee approves an "annual cash incentive target opportunity" for each executive officer as a percentage of the executive officer's base salary. In 2012, the maximum cash incentive award that each executive officer could earn, as set by the Compensation Committee, was equal to two times the executive officer's applicable annual cash incentive target opportunity.

22


Table of Contents

        The target opportunity established for the named executive officers is intended to increase collaboration, teamwork and accountability across the enterprise, to recognize the skills and versatility of each executive officer and to reflect relative contributions to the success of the overall enterprise. The target percentages for annual cash incentive awards to our named executive officers and the actual 2012 annual cash incentive awards paid are set forth in the table below:

2012 Annual Cash Incentive Awards  

Name

  Target
Percentage
(% of Salary)
  Target
Award Value
($)
  Actual
Award Paid
($)
  Paid Award
(% of Target)

Stephen J. Hemsley

  175%   2,275,000   4,000,000   176%

 

David S. Wichmann

  150%   1,275,000   2,250,000   176%

 

Gail K. Boudreaux

  150%   1,275,000   2,250,000   176%

 

Larry C. Renfro

  150%   1,275,000   2,254,614   177%

 

Lori Sweere

  100%      600,000   1,200,000   200%

 

Anthony Welters

  150%   1,125,000   1,825,000   162%

 

        In determining the 2012 annual cash incentive award amounts, the Committee took into account the Company's performance against the 2012 annual performance goals set forth in the table above and a qualitative assessment of individual performance and accomplishments. Individual factors considered are as follows:

        The Compensation Committee did not make specific assessments of, quantify or otherwise assign relative weightings to the factors considered in reaching its decisions with respect to any of the named executive officers.

23


Table of Contents

See the 2012 Summary Compensation Table and other related compensation tables below for details regarding 2012 total compensation.

Long-Term Incentive Compensation

        Long-term incentive compensation, consisting of the long-term cash incentive program and equity awards, represents the largest portion of executive officer compensation. This combination of long-term incentives provides a compelling performance-based compensation opportunity, aids in aligning and retaining the senior management team and accelerates the optimization of business unit capabilities across the enterprise.

        The long-term cash incentive award and performance share programs create a financial incentive for achieving or exceeding three-year financial goals for the enterprise. The earned long-term cash incentive award and performance shares for the 2010-2012 performance period were based on achieving the following performance results versus the pre-set goals:

 
2010-2012 Performance Measure
  Weight
  Threshold
Performance

  Target
Performance

  Maximum
Performance

  Actual
2010-2012
Performance

Cumulative Earnings Per Share

  50%   $9.23     $10.19   $10.76   $14.11

 

Return on Equity

  50%       12.2%          14.2%          16.2%          18.8%

 

        The performance measures and goals for the 2010-2012 performance period were established during the first quarter of 2010 based on the Company's Long-Term Plan. The first year of the Long-Term Plan was based on the Company's 2010 business plan. Subsequent years were based on assumptions and growth initiatives developed in conjunction with the Company's business units and reviewed by the Board of Directors. Some key assumptions and elements of the Long-Term Plan were:

        To achieve maximum performance for both the long-term cash incentive plan and the performance share plan, cumulative three-year earnings per share ("EPS") performance of $10.76 and an average return on equity ("ROE") of 16.2% were required. This maximum performance level corresponded to a compound annual growth rate in EPS of 8.2% over the three-year period, with a decrease in EPS projected for 2010 due to the economic and rate pressures noted above, followed by EPS growth of 15% in 2011 and 2012. The Company had a compound annual EPS growth rate of 17.7% over the three-year performance period. The resulting cumulative EPS of $14.11 was $3.35 above the maximum performance level.

        The 16.2% average ROE maximum performance level represented a decrease from the actual ROE at the time the goal was established, reflecting the anticipated decline in 2010 earnings. The resulting three-year average ROE was 18.8%, 260 basis points above the maximum performance level.

24


Table of Contents

        Environmental factors influencing these results, both positively and negatively, included:

        Similar to the annual incentive plan, the Company's long-term incentive plan allows for adjustments to the Company's reported results in determining long-term incentive plan awards, namely the impact of changes in accounting principles, extraordinary items and unusual or non-recurring gains or losses. No adjustments were made to the Company's financial results in determining long-term incentive award and performance share payout levels for the 2010-2012 performance period.

        At the beginning of each three-year performance period, the Compensation Committee approves a "long-term cash incentive target opportunity" for each executive officer as a percentage of the executive officer's average base salary over the performance period. For the 2010-2012 performance period, the maximum cash incentive award that an executive officer could earn was set by the Compensation Committee to be equal to two times the applicable long-term cash incentive target opportunity.

        The Compensation Committee believed that it was important to provide the same relative target opportunity to all of the named executive officers to increase collaboration, teamwork and accountability across the enterprise and to recognize the skills and versatility of each executive officer. The target percentages for long-term cash incentive awards to our named executive officers and the actual long-term cash incentive awards paid for the 2010-2012 performance period are set forth in the table below:

 
Long-Term Cash Incentive Award
Name
  Target Percentage
(% of 3-Year Average
Base Salary)

  Target
Award Value
($)

  Maximum
Award Value
($)

  Actual
Award Paid
($)

  Paid
Award
(% of Target)

Stephen J. Hemsley

  50%   650,000   1,300,000   1,300,000   200%

 

David S. Wichmann

  50%   397,115      794,230      794,230   200%

 

Gail K. Boudreaux

  50%   397,115      794,230      794,230   200%

 

Larry C. Renfro

  50%   394,808      789,616      789,616   200%

 

Lori Sweere

  50%   300,000      600,000      600,000   200%

 

Anthony Welters

  50%   365,705      731,410      731,410   200%

 

        The primary factor considered by the Compensation Committee in the determination of the long-term cash incentive award amounts was achievement of 2010-2012 long-term incentive plan measures above the maximum goal.

25


Table of Contents

        The use of performance shares as a component of the overall equity awards granted was based upon the Compensation Committee's consideration of competitive market data; the desirability of utilizing a balanced system to mitigate risk; the desire to encourage superior performance and build ownership; and conversations with shareholders about the desirability of this type of equity award as a component of a pay-for-performance program. The actual shares that were earned for the 2010-2012 performance period are set forth in the table below as well as reflected in the 2012 Options Exercises and Stock Vested table:

 
Long-Term Performance Shares
Name
  Target
Shares
(#)

  Maximum
Shares
(#)

  Actual
Shares Paid
(#)

  Paid
Award
(% of Target)

Stephen J. Hemsley

  90,910   181,820   181,820   200%

 

David S. Wichmann

  60,607   121,214   121,214   200%

 

Gail K. Boudreaux

  60,607   121,214   121,214   200%

 

Larry C. Renfro

  60,607   121,214   121,214   200%

 

Lori Sweere

  30,304     60,608     60,608   200%

 

Anthony Welters

  60,607   121,214   121,214   200%

 

        Awards of equity-based compensation to our executive officers serve the purposes described above under "Long-Term Incentive Compensation." The Compensation Committee determined that equity-based compensation for 2012 should include grants of RSUs and performance shares to achieve balance and effectiveness in our equity-based compensation and to align the interests of our executive officers and our shareholders. RSU grants were selected because they are full value shares with time vesting and, as such, provide added retention value. Performance share grants were selected to ensure a strong pay-for-performance alignment of the Company's compensation program with shareholder interests. The Compensation Committee's decision to grant performance shares was informed, in part, by discussions held between the Company and certain of its shareholders regarding the merits of performance shares in a pay-for-performance executive compensation program.

        The Compensation Committee's equity award policy requires that all grants of equity be made at set times, and the Compensation Committee does not delegate authority to management to grant equity awards. We do not have a specific program, plan or practice to time equity compensation awards to named executive officers in coordination with our release of material information.

        The Company does not pay dividend equivalents on performance shares granted to employees. After considering general market practices, the Compensation Committee amended the RSU award agreements to permit the payment of dividend equivalents on RSUs awarded in 2011 and after. The dividend equivalents are subject to the same terms as the RSUs and will be forfeited if the underlying RSUs do not vest.

        The aggregate number of shares subject to equity awards made in 2012 was less than 1% of the Company's shares outstanding at the end of 2012.

26


Table of Contents

        In February 2012, the Compensation Committee granted the following target number of performance shares and RSUs to Messrs. Hemsley, Wichmann, Renfro and Welters and Mses. Boudreaux and Sweere:

 
Name
  Target Number of
Performance Shares

  Annual RSU
Award

Stephen J. Hemsley

  67,269   67,269

 

David S. Wichmann

  43,245   43,245

 

Gail K. Boudreaux

  43,245   43,245

 

Larry C. Renfro

  43,245   43,245

 

Lori Sweere

  19,220   19,220

 

Anthony Welters

  38,440   38,440

 

The grant date fair values and terms of these equity awards are discussed in the 2012 Grants of Plan-Based Awards table.

        In February 2012, the Compensation Committee authorized a change in the retirement provisions of Mr. Renfro's equity awards to provide that, for purposes of calculating years of service for retirement eligibility, Mr. Renfro will receive two years of service credit for each year he remains employed with the Company after he reaches age 59. In addition, the Committee agreed that if Mr. Renfro's employment is terminated by the Company without "cause" or if he terminates employment for "good reason" (as these terms are defined in the award agreements) prior to the date upon which he becomes retirement eligible, Mr. Renfro will be deemed to have met the applicable age and service requirements needed to be eligible for retirement under the Company's equity award agreements. The only retirement benefit that the Company provides to its executive officers is enhanced vesting and exercisability of equity in connection with retirement, and the Company does not provide any pension or SERP benefits to the executive officers. The Committee approved these changes for Mr. Renfro to address internal equity issues among the executive officers and to provide a strong retention incentive for Mr. Renfro.

Other Compensation

        In addition to generally available benefits, our executive officers are eligible to receive supplemental long-term disability coverage equal to 60% of base salary (up to $420,000) and all of our named executive officers, other than Mr. Hemsley, receive supplemental group term life insurance coverage of $2 million. Executive officers are also eligible to participate in our non-qualified Executive Savings Plan. See the 2012 Non-Qualified Deferred Compensation table for additional information regarding contributions, earnings and distributions for each named executive officer under the Executive Savings Plan. Our Executive Savings Plan does not provide for guaranteed or above-market interest.

        As part of our continued focus on the community, the Company implemented an Executive Board Service Matching Program. This program is available to approximately 200 senior leaders of the Company, including the named executive officers. This program provides for Company matching contributions on a 1:1 or 2:1 basis to certain charitable and nonprofit organizations up to a maximum amount of $10,000 per organization and a maximum annual Company match amount of $40,000 per senior leader. In order to receive the matching contribution, the employee must serve on the board of the charitable or nonprofit organization and make an equivalent personal financial contribution.

27


Table of Contents

        We do not believe that providing generous executive perquisites is either necessary to attract and retain executive talent or consistent with our pay-for-performance philosophy. Therefore, other than the benefits described above, we do not provide perquisites such as excise tax gross-ups, company automobiles, security services, private jet services, financial planning services, club memberships, apartments or vacation homes to our executive officers. Our corporate aircraft use policy prohibits personal use of corporate aircraft by any executive officer. Because there is essentially no incremental cost to the Company, however, the policy does permit an executive officer's family member to accompany the executive officer on a business flight on Company aircraft provided a seat is available.

        The Company has a policy of entering into employment agreements with each of our named executive officers. These employment agreements are described in greater detail in "Executive Employment Agreements."

        None of the employment agreements provides for ongoing fixed minimum annual equity awards or fixed cash incentive awards except for certain limited duration commitments made to Gail Boudreaux and Larry Renfro when they joined the Company. The Company's policies related to post-employment payments and benefits do not provide for enhanced cash severance payments upon termination in connection with a change in control or for excise tax gross-up payments payable in connection with a change in control. The Company also does not have any ongoing supplemental executive retirement plan obligations for its named executive officers.

        The employment agreements with our executive officers provide for certain severance payments in connection with their termination of employment under various circumstances, typically termination by the Company without "cause" or by the executive officer for "good reason." See "Executive Employment Agreements" and "Potential Payments Upon Termination or Change in Control" for additional information regarding potential severance payments that may be made to the named executive officers. We have provided these post-employment payments and benefits and severance payment triggers because they have enabled us to obtain specific post-employment non-competition, non-solicitation and non-disclosure agreements with our executive officers that we believe are of value to the Company and our shareholders.

        Prior to 2011, our equity award agreements typically provided that the awards become fully vested and exercisable if the executive officer's employment ends due to death or disability, or if a change in control of the Company occurs. Beginning in 2011, equity award agreements that contain time-based vesting features no longer provide for "single-trigger" accelerated vesting upon a change in control. These agreements now include a "double-trigger" provision, which provides for accelerated vesting only if there is a change in control and the executive officer's employment is terminated without "cause" or the executive officer terminates his or her employment for "good reason" within two years of the change in control. For performance shares, the target number of performance shares will immediately vest upon a change in control of the Company. The Compensation Committee determined that "double-trigger" acceleration of vesting for time-based equity better preserved the retentive value of the equity award and was more consistent with the interests of our shareholders. Our equity award agreements also generally provide for continued vesting and exercisability during any period in which an executive officer receives severance and for continued exercisability of vested awards for a limited period of time after termination of employment for other reasons. In addition, stock option awards granted in 2009 and going forward provide for continued vesting and exercisability for up to five years after retirement, subject to certain conditions. The Compensation Committee elected to provide such continued vesting and exercisability because such provisions are a common market practice and our other retirement benefits are limited to the Company's 401(k) plan and non-qualified deferred compensation plan.

28


Table of Contents


Other Compensation Practices

        The Compensation Committee believes that executive stock ownership aligns management's interests with those of shareholders and fosters a long-term outlook, while also assisting in the mitigation of compensation risk. Under our stock ownership guidelines, each executive officer must beneficially own at least the following amounts of the Company's common stock within three years of the executive officer's election or appointment as an executive officer:

        Stock options and stock appreciation rights ("SARs") do not count towards satisfying the ownership requirements under the guidelines, regardless of their vesting status, and performance shares do not count towards satisfying the ownership requirements until they are vested. Time-based RSUs and restricted stock awards are counted toward the satisfaction of the ownership requirements. The Compensation Committee periodically reviews compliance with the ownership requirements. As of the record date of this proxy statement, all of our named executive officers were in compliance with the ownership requirements, including Mr. Hemsley, who, as of March 1, 2013, directly owned shares with a value equal to 108 times his base salary.

        Additionally, in 2009, the Board established a stock retention policy for executive officers that are subject to Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which includes our named executive officers. For equity awards received after October 23, 2009, Section 16 officers are required to retain one-third of the net shares acquired upon the vesting or exercise of any equity awards for at least one year.

        In general, SEC rules prohibit uncovered short sales of our common stock by our executive officers, including the named executive officers. Accordingly, our insider trading policy prohibits short sales of our common stock by all employees and directors. Our insider trading policy was amended in 2012 to prohibit hedging transactions by all directors and employees and to require advance approval of the Compensation Committee of any pledging of common stock by directors, executive officers and other members of management, although pledges existing at the time of the amendment were grandfathered. In 2012, no executive officer or director sought or received advance approval from the Compensation Committee regarding pledging transactions.

        If the Board of Directors determines that an executive officer has engaged in fraud or misconduct, the Board of Directors may take a range of actions to remedy the misconduct, prevent its recurrence and impose such discipline as would be appropriate, including, without limit: (i) terminating employment and (ii) initiating legal action against the executive officer. In addition, with respect to our senior executives, including our named executive officers, if the fraud or misconduct causes, in whole or in part, a material restatement of the Company's financial statements, action may include (a) seeking reimbursement of the entire amount of cash incentive compensation awarded to the executive officer, if the executive officer would have received a lower (or no) cash incentive award if calculated based on the restated financial results and (b) canceling all outstanding vested and unvested equity awards subject to the clawback policy and requiring the executive officer to return to the Company all gains from equity awards realized during the twelve-month period following the filing of the incorrect financial statements.

        The Compensation Committee plans to review our clawback policy and revise it as necessary to comply with any forthcoming SEC rules implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act.

29


Table of Contents

        Our compensation programs are balanced, focused on long-term pay-for-performance and allow for discretion. The Compensation Committee believes that the design of the compensation program for our executive officers does not encourage excessive or unnecessary risk-taking, as illustrated by the following list of features:

In addition, our Compensation Committee retains discretion to adjust compensation for quality of performance, adherence to Company values and other factors.

        Internal Revenue Code Section 162(m) imposes a $1 million corporate deduction limit for compensation to the Company's CEO and its three other highest-paid executive officers (other than the CFO) employed at the end of the year, unless the compensation is "performance-based," as defined in Section 162(m), and provided under a plan that has been approved by the shareholders. As part of the federal health care reform legislation enacted in 2010, Section 162(m) was revised as it pertains to compensation paid by health insurers, including the Company. Starting in 2013, an annual tax deduction limit of $500,000 per person will apply to compensation that we pay to any of our employees and certain service providers, regardless of whether such compensation is deemed performance-based under Section 162(m) or is provided pursuant to a shareholder-approved plan. The tax deduction limitation also applies to compensation earned in 2010 through 2012, to the extent that the receipt of the compensation is deferred until after 2012. Any outstanding stock options and SARs that were fully vested prior to 2010 are not subject to the tax deduction limitation. The tax deduction limitation has already begun to impact the Company. As described in the Company's Annual Report on Form 10-K for the year ended December 31, 2012, the Company lost some tax benefits that would otherwise have been available in 2012 for deferred compensation that will be paid after 2012 that the Company believes will be in excess of the $500,000 deduction limit.

30


Table of Contents

Peer Group and Managed Care Companies

Peer Group   Managed Care Companies
3M Company   Google Inc.  

Aetna Inc.

Abbott Laboratories   Hewlett-Packard Company  

CIGNA Corp.

Amazon.com Inc.   Home Depot, Inc. (The)  

Coventry Health Care Inc.

American Express Co.   Intel Corporation  

Humana Inc.

American International Group, Inc.   International Business Machines Corp.  

WellPoint Inc.

Ameriprise Financial Inc.   Johnson & Johnson    
AmerisourceBergen Corporation   JPMorgan Chase & Co.    
Amgen Inc.   Kraft Foods Inc.    
Apple Inc.   Kroger Co. (The)    
Archer Daniels Midland Company   Lowe's Companies Inc.    
AT&T, Inc.   Mastercard Incorporated    
Bank of America Corp.   McDonald's Corp.    
Berkshire Hathaway Inc.   McKesson Corporation    
Best Buy Co. Inc.   Medtronic, Inc.    
Bristol-Myers Squibb Co.   Merck & Co. Inc.    
Bunge Limited   MetLife, Inc.    
Cardinal Health Inc.   Microsoft Corporation    
Cargill, Incorporated   Oracle Corp.    
Cisco Systems Inc.   PepsiCo, Inc.    
Citigroup, Inc.   Pfizer Inc.    
Coca-Cola Company (The)   Procter & Gamble Co.    
Colgate-Palmolive Co.   Prudential Financial Inc.    
Costco Wholesale Corporation   QUALCOMM Incorporated    
CVS Caremark Corporation   Safeway Inc.    
Dell Inc.   Sears Holdings Corporation    
Dow Chemical Company (The)   Sysco Corp.    
eBay Inc.   Target Corp.    
E.l. duPont de Nemours & Company   Travelers Companies, Inc. (The)    
Eli Lily and Co.   U.S. Bancorp    
EMC Corporation   United Parcel Service, Inc.    
Express Scripts Holding Company   Verizon Communications Inc.    
FedEx Corporation   Visa, Inc.    
General Electric Company   Walgreen Co.    
General Mills, Inc.   WellPoint Inc.    
Goldman Sachs Group, Inc. (The)   Wells Fargo & Company    


Compensation and Human Resources Committee Report

        The Compensation and Human Resources Committee has reviewed and discussed the above Compensation Discussion and Analysis with management. Based on its review and discussions, the Compensation and Human Resources Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the proxy statement and incorporated by reference into the Company's Annual Report on Form 10-K for the year ended December 31, 2012. This report was provided by the following independent directors who comprise the Compensation and Human Resources Committee:

Douglas W. Leatherdale (Chair)
William C. Ballard, Jr.
Robert J. Darretta
Rodger A. Lawson

31


Table of Contents


2012 Summary Compensation Table*

        The following table provides certain summary information for the years ended December 31, 2012, 2011 and 2010 relating to compensation paid or granted to, or accrued by us on behalf of, our named executive officers.

 
Name and
Principal Position

  Year
  Salary
($)(1)

  Bonus
($)

  Stock
Awards
($)(2)

  SAR
Awards
($)(3)

  Non-Equity
Incentive Plan
Compensation
($)(4)

  Change in
Pension Value
and
Non-Qualified
Deferred
Compensation
Earnings
($)(5)

  All Other
Compensation
($)(6)

  Total
($)

Stephen J. Hemsley

  2012   1,300,000             —     7,000,012                 —     5,300,000   (7)   287,443   13,887,455

President and CEO

  2011   1,300,000             —     7,000,028                 —     4,940,000   —     154,804   13,394,832

  2010   1,300,000             —     4,500,045   1,500,007   3,400,000   —     110,079   10,810,131
 

David S. Wichmann

  2012      850,000             —     4,500,074                 —     3,044,230   —     106,549     8,500,853

Executive Vice President

  2011      832,692             —     7,000,070                 —     2,794,200   —       84,212   10,711,174

and CFO

                                   
 

Gail K. Boudreaux

  2012      850,000             —     4,500,074                 —     3,044,230   —     103,770     8,498,074

Executive Vice President

  2011      832,692   205,000   7,000,070                 —     2,794,200   —       93,353   10,925,315

and CEO, UnitedHealthcare

  2010      700,000   205,000   3,000,063   1,000,004   1,400,000   —       68,679     6,373,746
 

Larry C. Renfro

  2012      850,000       4,500,074        37,494   3,044,230       185,006     8,616,804

Executive Vice President

  2011      832,692             —     7,000,070                 —     2,734,600   —       35,825   10,603,187

and CEO, Optum

  2010      692,308       3,000,063   1,000,004   1,400,000   —     240,300     6,332,675
 

Lori Sweere

                                   

Executive Vice President,

  2012      600,000             —     2,000,034                 —     1,800,000   —       73,338     4,473,372

Human Capital

                                   
 

Anthony Welters

  2012      750,000             —     4,000,066                 —     2,556,410   —     104,608     7,411,084

Executive Vice President

  2011      744,231             —     4,500,060                 —     2,514,600   —     112,118     7,871,009

  2010      700,000             —     3,000,063   1,000,004   1,400,000   —     119,687     6,219,754
 
*
Please see "Compensation Discussion and Analysis" above for a description of our executive compensation program necessary to an understanding of the information disclosed in this table. Please see "Executive Employment Agreements" below for a description of the material terms of each named executive officer's employment agreement.

(1)
Amounts reported reflect the base salary earned by named executive officers in the years ended December 31, 2012, 2011 and 2010. Amounts reported for 2012 include the following salary amounts deferred by the named executive officers under our Executive Savings Plan:

Name
  Amount
Deferred

Stephen J. Hemsley

  $78,000

David S. Wichmann

  $51,000

Gail K. Boudreaux

  $51,000

Larry C. Renfro

  $51,000

Lori Sweere

  $36,000

Anthony Welters

  $45,000
(2)
The amounts reported in this column reflect the aggregate grant date fair value of the RSUs and performance shares (at target) granted in 2012, 2011 and 2010 and computed in accordance with FASB ASC Topic 718, based on the closing

32


Table of Contents

 
   
  Performance Shares
 
  Restricted
Stock Units
Name
  Target   Maximum

Stephen J. Hemsley

  $3,500,006   $3,500,006   $7,000,012

David S. Wichmann

  $2,250,037   $2,250,037   $4,500,074

Gail K. Boudreaux

  $2,250,037   $2,250,037   $4,500,074

Larry C. Renfro

  $2,250,037   $2,250,037   $4,500,074

Lori Sweere

  $1,000,017   $1,000,017   $2,000,034

Anthony Welters

  $2,000,033   $2,000,033   $4,000,066
(3)
The actual value to be realized by a named executive officer depends upon the performance of the Company's stock and the length of time the SAR award is held. No value will be realized with respect to any SAR award if the Company's stock price does not increase following the award's grant date or if the executive officer does not satisfy the vesting criteria.

The amounts reported in this column reflect the aggregate grant date fair value of SARs granted in 2010 computed in accordance with FASB ASC Topic 718. In Mr. Renfro's case, the amount shown for 2012 reflects the incremental increase in fair value with respect to SARs granted in 2009 and 2010, the award agreements for which were amended in 2012 in order to revise the terms pursuant to which Mr. Renfro will be deemed retirement eligible. The grant prices for Mr. Renfro's 2009 and 2010 SARs were not modified in connection with such amendments. See footnote 6 to the 2012 Grants of Plan-Based Awards table for additional detail. For a description of the assumptions used in computing the aggregate grant date fair value, see Note 11 to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012. These same assumptions have been used in computing aggregate grant date fair value since fiscal year 2009.

(4)
Amounts reported include both annual and long-term cash incentive awards to our named executive officers under our 2008 Executive Incentive Plan. The 2012 annual incentive awards, including amounts deferred by the named executive officers, were the following:

Name
  Total Amount of
Annual Cash
Incentive Award
  Amount of Annual
Cash Incentive
Award Deferred

Stephen J. Hemsley

  $4,000,000   $240,000

David S. Wichmann

  $2,250,000   $135,000

Gail K. Boudreaux

  $2,250,000   $225,000

Larry C. Renfro

  $2,254,614            —

Lori Sweere

  $1,200,000   $  72,000

Anthony Welters

  $1,825,000   $109,500

Name
  Period   Total Amount of
Long-Term Cash
Incentive Award

Stephen J. Hemsley

  2010-2012   $1,300,000

David S. Wichmann

  2010-2012   $  794,230

Gail K. Boudreaux

  2010-2012   $  794,230

Larry C. Renfro

  2010-2012   $  789,616

Lori Sweere

  2010-2012   $  600,000

Anthony Welters

  2010-2012   $  731,410
(5)
Named executive officers participate in our Executive Savings Plan, which is a non-qualified deferred compensation plan. The Executive Savings Plan does not credit above-market earnings or preferential earnings to the amounts deferred, and accordingly, no non-qualified deferred compensation earnings have been reported. Under the Executive Savings Plan, there are no measuring investments tied to Company stock performance. The measuring investments are a collection of unaffiliated mutual funds identified by the Company.

33


Table of Contents

(6)
All other compensation includes the following:

Name
  Year   Company
Matching
Contributions
Under 401(k)
Savings Plan
  Company
Matching
Contributions
Under
Executive
Savings Plan
  Company
Matching
Contributions
Under
Executive
Board Service
Matching
Program(a)
  Insurance
Premiums(b)
  Relocation
Benefits(c)
  Tax
Assistance(c)
  Hart-
Scott-
Rodino
Filing Fee(d)

Stephen J. Hemsley

  2012   $11,250   $148,200          —          —          —          —   $125,000

David S. Wichmann

  2012   $11,250   $  87,000          —          —          —          —          —

Gail K. Boudreaux

  2012   $11,250   $  87,000          —          —          —          —          —

Larry C. Renfro

  2012   $10,760   $  25,500          —   $10,320   $80,702   $57,724          —

Lori Sweere

  2012   $11,039   $  54,000          —          —          —          —          —

Anthony Welters

  2012   $  7,788   $  76,500   $10,000   $10,320          —          —          —
(7)
The amount of Mr. Hemsley's supplemental retirement benefit was frozen in 2006 based on his then current age and average base salary and converted into a lump sum of $10,703,229. As such, there was no increase in the benefit payable to Mr. Hemsley under his supplemental retirement benefit in fiscal year 2012.

34


Table of Contents


2012 Grants of Plan-Based Awards*

        The following table presents information regarding each grant of an award under our compensation plans made during 2012 to our named executive officers for fiscal year 2012.

 
   
   
   
   
   
   
   
   
  All Other
Option/
SAR
Awards:
Number of
Securities
Underlying
Options/
SARs
(#)

   
   
 
   
   
   
   
   
   
   
  All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)

  Exercise
or Grant
Price of
Option/
SAR
Awards
($/Sh)

  Grant Date
Fair Value
of Stock
or Option/
SAR
Awards
($)(1)

 
   
  Estimated Future Payouts
Under Non-Equity Incentive Plan
Awards
  Estimated Future Payouts
Under Equity Incentive Plan
Awards
Name
  Grant Date
  Threshold
($)

  Target
($)

  Maximum
($)

  Threshold
(#)

  Target
(#)

  Maximum
(#)

Stephen J. Hemsley

                                           

Annual Cash Incentive Award(2)

  —       2,047,500       2,275,000          4,550,000          —          —          —          —          —          —          —       

Long-Term Cash Incentive Award(3)

  —       3,495       650,000          1,300,000          —          —          —          —          —          —          —       

RSU Award(4)

  2/7/2012       —       —          —          —          —          —          67,269          —          —          3,500,006       

Performance Share Award(5)

  2/7/2012       —       —          —          362          67,269          134,538          —          —          —          3,500,006       
 

David S. Wichmann

                                           

Annual Cash Incentive Award(2)

  —       1,147,500       1,275,000          2,550,000          —          —          —          —          —          —          —       

Long-Term Cash Incentive Award(3)

  —       2,366       440,064          880,128          —          —          —          —          —          —          —       

RSU Award(4)

  2/7/2012       —       —          —          —          —          —          43,245          —          —          2,250,037       

Performance Share Award(5)

  2/7/2012       —       —          —          232          43,245          86,490          —          —          —          2,250,037       
 

Gail K. Boudreaux

                                           

Annual Cash Incentive Award(2)

  —       1,147,500       1,275,000          2,550,000          —          —          —          —          —          —          —       

Long-Term Cash Incentive Award(3)

  —       2,366       440,064          880,128          —          —          —          —          —          —          —       

RSU Award(4)

  2/7/2012       —       —          —          —          —          —          43,245          —          —          2,250,037       

Performance Share Award(5)

  2/7/2012       —       —          —          232          43,245          86,490          —          —          —          2,250,037       
 

Larry C. Renfro

                                           

Annual Cash Incentive Award(2)

  —       1,147,500       1,275,000          2,550,000          —          —          —          —          —          —          —       

Long-Term Cash Incentive Award(3)

  —       2,366       440,064          880,128          —          —          —          —          —          —          —       

RSU Award(4)

  2/7/2012       —       —          —          —          —          —          43,245          —          —          2,250,037       

Performance Share Award(5)

  2/7/2012       —       —          —          232          43,245          86,490          —          —          —          2,250,037       

SAR Award(6)

  2/3/2009       —       —          —          —          —          —          —          92,800          29.74          14,411       

SAR Award(6)

  2/9/2010       —       —          —          —          —          —          —          76,024          33.00          23,083       
 

Lori Sweere

                                           

Annual Cash Incentive Award(2)

  —       540,000       600,000          1,200,000          —          —          —          —          —          —          —       

Long-Term Cash Incentive Award(3)

  —       1,613       300,000          600,000          —          —          —          —          —          —          —       

RSU Award(4)

  2/7/2012       —       —          —          —          —          —          19,220          —          —          1,000,017       

Performance Share Award(5)

  2/7/2012       —       —          —          103          19,220          38,440          —          —          —          1,000,017       
 

Anthony Welters

                                           

Annual Cash Incentive Award(2)

  —       1,012,500       1,125,000          2,250,000          —          —          —          —          —          —          —       

Long-Term Cash Incentive Award(3)

  —       2,016       375,000          750,000          —          —          —          —          —          —          —       

RSU Award(4)

  2/7/2012       —       —          —          —          —          —          38,440          —          —          2,000,033       

Performance Share Award(5)

  2/7/2012       —       —          —          207          38,440          76,880          —          —          —          2,000,033       
 
*
Please see "Compensation Discussion and Analysis" above for a description of our executive compensation program necessary for an understanding of the information disclosed in this table.

(1)
The actual value to be realized by a named executive officer depends upon the appreciation in value of the Company's stock and the length of time the award is held. No value will be realized with respect to any SAR award if the Company's stock price does not increase following the grant date. The amounts reported in this column for SAR awards reflect the incremental fair value resulting from the amendments described in footnote 6 below, computed in accordance with FASB ASC Topic 718. For a description of the assumptions used in computing grant date fair value for SAR awards pursuant to FASB ASC Topic 718, see Note 11 to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012. The grant date fair value of each restricted stock unit award and targeted grant date value of each performance share award was computed in accordance with FASB ASC Topic 718 based on the closing stock price on the grant date.

(2)
Amounts represent estimated payouts of annual cash incentive awards granted under our Executive Incentive Plan in 2012. The Executive Incentive Plan permits a maximum annual bonus pool for executive officers equal to 2% of the Company's net income (as defined in the plan) and no executive officer may receive more than 25% of such annual bonus pool. The Compensation Committee has limited annual cash incentive payouts to not more than two times the target amount, which is reflected in the maximum payout column. In order for any amount to be paid, the Company must achieve approved performance measures of (i) revenue, (ii) operating income, (iii) cash flow, (iv) consumer, customer and physician satisfaction, (v) employee engagement and (vi) employee teamwork. The estimated threshold award represents

35


Table of Contents

(3)
Amounts represent estimated future payouts of long-term cash incentive awards granted under our Executive Incentive Plan in 2012 for the 2012-2014 incentive period, to be paid in 2015. The Executive Incentive Plan permits a maximum long-term bonus pool for executive officers equal to 2% of the Company's average net income (as defined in the plan) during the performance period and no executive officer may receive more than 25% of such long-term bonus pool. The Compensation Committee has limited the long-term cash incentive payout maximum amount to not more than two times each named executive officer's target amount, which is reflected in the maximum payout column. In 2012, upon recommendation by management, the Compensation Committee approved a cumulative EPS measure and an average return on equity measure for the 2012-2014 incentive period, either one of which must be achieved before the threshold amount shown above becomes earned and payable. Each measure is weighted equally. The Compensation Committee will determine whether the goals have been achieved at the end of the performance period. The estimated threshold award represents the amount that may be paid if threshold performance on one of the performance measures is exceeded. Once threshold performance is achieved, the Compensation Committee has the discretion to pay an award ranging from 0% up to a maximum of 200% of target. The estimated threshold, target and maximum awards listed in the table were computed based on participants' estimated average salary over the 2012 to 2014 performance period. This three year average salary was determined using their actual 2012 salary earned with their current salary used to estimate their 2013 and 2014 salaries.

(4)
Amounts represent the number of RSUs granted under our 2011 Stock Incentive Plan. These RSUs proportionately vest on December 28, 2012, February 7, 2014 and February 7, 2015, other than for Messrs. Hemsley and Welters as described in footnote 4 to the Outstanding Equity Awards at 2012 Fiscal Year-End table. The RSUs are eligible to receive dividend equivalents, which are subject to the same terms as the RSUs and will be forfeited if the underlying RSUs do not vest. Unless the holder is retirement eligible, these RSUs are subject to earlier termination upon certain events related to termination of employment. Unvested RSUs will vest in full upon death or disability. Unvested RSUs will also vest in full if, within two years of a change in control, an executive terminates employment for Good Reason or is terminated without Cause (i.e., "double-trigger" vesting), as these terms are defined in each executive's equity-award agreement. RSUs may also continue to vest following retirement, if the executive officer is retirement eligible, or over any severance period following termination of employment.

(5)
Amounts represent the estimated future number of performance shares that may be earned under our 2011 Stock Incentive Plan at each of the threshold, target and maximum levels. The performance share award will be paid out in shares of Company common stock. The number of performance shares that the executive officer will receive will be determined at the conclusion of the 2012-2014 performance period and will be dependent upon the Company's achievement of a cumulative EPS measure and an average ROE measure approved by the Compensation Committee. The Compensation Committee has the discretion to reduce the number of performance shares an executive officer is entitled to receive. The estimated threshold award represents the number of performance shares that may be awarded if threshold performance is achieved on one of the performance measures. No dividend equivalents are paid on performance shares. The full target number of performance shares will immediately vest upon a change in control of the Company, as this term is defined in each executive's equity-award agreement. Upon retirement, if the executive officer is retirement eligible, the executive officer will vest in the full number of performance shares that are earned at the end of the performance period as if the executive officer had been continuously employed throughout the entire performance period, provided the executive officer had served for at least one year of the performance period. Upon death, disability or termination of employment for Good Reason or other than for Cause (as these terms are defined in the performance share award agreement), the executive officer will receive at the end of the applicable performance period, a pro-rata number of performance shares that are earned based on the number of full months employed plus, if applicable, the number of months for any severance period.

(6)
Mr. Renfro's equity awards granted in 2009 and 2010 were amended in 2012 to provide that (i) for purposes of calculating years of service for retirement eligibility, Mr. Renfro will receive two years of service credit for each year he remains employed with the Company after he reaches age 59, and (ii) prior to the date upon which Mr. Renfro becomes retirement eligible, Mr. Renfro will be deemed to have met the applicable age and service requirements under the Company's equity award agreements and be retirement eligible if his employment is terminated by the Company without Cause or if he terminates employment for Good Reason (as these terms are defined in the award agreements). Pursuant to FASB ASC Topic 718, the amendment of Mr. Renfro's 2009 and 2010 SARs grants resulted in incremental increase in their fair value in 2012, the amounts of which are shown in the table. The grant prices for Mr. Renfro's 2009 and 2010 SARs were not modified in connection with these amendments.

36


Table of Contents


Outstanding Equity Awards at 2012 Fiscal Year-End

        The following table presents information regarding outstanding equity awards held at the end of fiscal year 2012 by our named executive officers.

 
  Option/SAR Awards   Stock Awards
Name
  Date of
Option/
SAR
Grant

 

Number of
Securities
Underlying
Unexercised
Options/
SARs (#)
Exercisable

  Number of
Securities
Underlying
Unexercised
Options/
SARs (#)
Unexercisable

  Option/
SAR
Exercise/
Grant
Price ($)

  Option/
SAR
Expiration
Date(1)

  Stock Award
Grant Date

  Number of
Shares or
Units of
Stock That
Have Not
Vested (#)

  Market
Value of
Shares or
Units of
Stock
That Have
Not Vested
($)(2)

  Equity
Incentive
Plan Awards:
Number of
Unearned
Shares or
Units That
Have Not
Vested (#)

  Equity
Incentive
Plan Awards:
Market Value
of Unearned
Shares or
Units That
Have Not
Vested ($)(2)

Stephen J. Hemsley

      2/9/2010     57,018   57,018(3)   33.0000       2/9/2020     2/7/2012   45,483(4)   2,466,998             —                      —  

    2/23/2009   127,263   42,420(5)   29.7400     2/23/2019     2/7/2012           —                      —       67,269(6)   3,648,671

    1/31/2006   200,000           —        59.4200     1/31/2016     2/9/2011   28,483(7)   1,544,918             —                      —  

      5/2/2005     62,500           —        57.4183       5/2/2015     2/9/2011           —                      —     166,390(6)   9,024,994

      5/2/2005   187,500           —        48.3550       5/2/2015     2/9/2010   22,727(8)   1,232,712             —                      —  

      2/3/2005   450,000           —        45.2800       2/3/2015   2/23/2009   14,423(9)      782,304             —                      —  

      2/3/2005   150,000           —        55.3583       2/3/2015                    

    2/11/2004   600,000           —        58.3600     2/11/2014                    

    2/12/2003   300,000           —        58.3600     2/12/2013                    

    2/12/2003   900,000           —        58.3600     2/12/2013                    
 

David S. Wichmann

      2/9/2010     38,012   38,012(3)   33.0000       2/9/2020     2/7/2012   29,240(4)   1,585,978             —                      —  

    2/23/2009     84,842   28,280(5)   29.7400     2/23/2019     2/7/2012           —                      —       43,245(6)   2,345,609

      6/5/2008   203,642           —        33.9400       6/5/2018     2/9/2011     18,311(7)      993,189             —                      —  

    5/28/2007             —       25,000(10)   54.4100     5/28/2017     2/9/2011     61,035(11)   3,310,538             —                      —  

    5/28/2007   150,000           —        54.4100     5/28/2017     2/9/2011           —                      —     106,966(6)   5,801,836

      5/2/2006   150,000           —        48.5800       5/2/2016     2/9/2010   15,152(8)      821,844             —                      —  

  10/31/2005     65,000           —        59.0000   10/31/2015   2/23/2009     9,615(9)      521,518             —                      —  

      5/2/2005     25,000           —        49.7886       5/2/2015                    

      5/2/2005     75,000           —        48.3550       5/2/2015                    
 

Gail K. Boudreaux

      2/9/2010     19,006   38,012(3)   33.0000       2/9/2020     2/7/2012   29,240(4)   1,585,978             —                      —  

    2/23/2009             —     28,280(5)   29.7400     2/23/2019     2/7/2012           —                      —       43,245(6)   2,345,609

                        2/9/2011   18,311(7)      993,189             —                      —  

                        2/9/2011   61,035(11)   3,310,538             —                      —  

                        2/9/2011           —                      —     106,966(6)   5,801,836

                        2/9/2010   15,152(8)      821,844             —                      —  

                      2/23/2009     9,615(9)      521,518             —                      —  
 

Larry C. Renfro

      2/9/2010     38,012   38,012(3)   33.0000       2/9/2020     2/7/2012   29,240(4)   1,585,978             —                      —  

      2/3/2009     69,600   23,200(5)   29.7400       2/3/2019     2/7/2012           —                      —       43,245(6)   2,345,609

                        2/9/2011   18,311(7)      993,189             —                      —  

                        2/9/2011     61,035(11)   3,310,539             —                      —  

                        2/9/2011           —                      —     106,966(6)   5,801,836

                        2/9/2010   15,152(8)      821,844             —                      —  

                        2/3/2009   26,650(8)   1,445,496             —                      —  
 

Lori Sweere

      2/9/2010             —     19,006(3)   33.0000       2/9/2020     2/7/2012   12,996(4)      704,903             —                      —  

    2/23/2009             —     14,140(5)   29.7400     2/23/2019     2/7/2012           —                      —       19,220(6)   1,042,493

    7/30/2007     64,956           —        48.9400     7/30/2017     2/9/2011     8,139(7)      441,459             —                      —  

                        2/9/2011           —                      —       47,540(6)   2,578,570

                        2/9/2010     7,576(8)      410,922             —                      —  

                      2/23/2009     4,807(9)      260,732             —                      —  
 

Anthony Welters

      2/9/2010             —     38,012(3)   33.0000       2/9/2020     2/7/2012   25,991(4)   1,409,752             —                      —  

    2/23/2009             —     28,280(5)   29.7400     2/23/2019     2/7/2012           —                      —       38,440(6)   2,084,986

      6/5/2008     21,212           —        33.9400       6/5/2018     2/9/2011   18,311(7)      993,189             —                      —  

    5/28/2007             —       25,000(10)   54.4100     5/28/2017     2/9/2011           —                      —     106,966(6)   5,801,836

    5/28/2007   150,000           —        54.4100     5/28/2017     2/9/2010   15,152(8)      821,844             —                      —  

      5/2/2006   100,000           —        48.5800       5/2/2016   2/23/2009     9,615(9)      521,518             —                      —  

  10/31/2005     40,000           —        60.0700   10/31/2015                    

      5/2/2005   100,000           —        48.5700       5/2/2015                    

    11/4/2004   100,000           —        42.8650     11/4/2014                    
 
(1)
The expiration date shown is the latest date that options/SARs may be exercised. Options/SARs may terminate earlier in certain circumstances, such as in connection with the named executive officer's termination of employment.

(2)
Based on the per share closing market price of our common stock on December 31, 2012 of $54.24.

(3)
Vest 25% annually over a four-year period beginning on the first anniversary of the grant date.

(4)
Vest 33-1/3% on December 28, 2012, February 7, 2014 and February 7, 2015, other than for retirement eligible executive officers. A portion of a retirement eligible executive officer's award that otherwise would have vested on the next specified

37


Table of Contents

(5)
Vest 25% annually over a four-year period beginning on February 3, 2010.

(6)
Vest 100% at the end of the three-year performance period. The number of performance shares that the executive officer will receive is dependent upon the achievement of a cumulative EPS measure and an average ROE measure approved by the Compensation Committee. The number of performance shares reported above for grants made in 2012 is at the target number established by the Compensation Committee because we currently believe that is the probable outcome of the performance conditions based on the Company's performance through December 31, 2012. The number of performance shares reported above for grants made in 2011 is the maximum number established by the Compensation Committee because we believe that payout at maximum is the probable outcome of the performance conditions based on the Company's performance through December 31, 2012.

(7)
Vest 33-1/3% on February 9, 2012, December 28, 2012 and February 9, 2014, other than for retirement eligible executive officers. A portion of a retirement eligible executive officer's award that otherwise would have vested on the next specified vesting date is cancelled to pay applicable FICA taxes owed by the executive officer. The cancellation occurs in the year of grant if the executive officer is retirement eligible during that year or in the first year the executive officer becomes retirement eligible. The remainder of the award vests proportionally over the remaining vesting period. Messrs. Hemsley and Welters are retirement eligible. These RSUs are eligible to and did receive dividend equivalents converted into additional shares; accordingly, the number of shares shown has been rounded to the nearest whole share. For more information on RSUs cancelled in 2012, please see the 2012 Option Exercises and Stock Vested table.

(8)
Vest 25% annually over a four-year period beginning on the first anniversary of the grant date, other than for retirement eligible executive officers. A portion of a retirement eligible executive officer's award that otherwise would have vested on the next anniversary of the grant date is cancelled to pay applicable FICA taxes owed by the executive officer. The cancellation occurs in the year of grant if the executive officer is retirement eligible during that year or in the first year the executive officer becomes retirement eligible. The remainder of the award vests proportionally over the remaining vesting period. Mr. Hemsley was retirement eligible on the grant date and Mr. Welters became retirement eligible in 2010.

(9)
Vest 25% annually over a four-year period beginning on February 3, 2010, other than for retirement eligible executive officers. A portion of a retirement eligible executive officer's award that otherwise would have vested on the next specified vesting date is cancelled to pay applicable FICA taxes owed by the executive officer. The cancellation occurs in the year of grant if the executive officer is retirement eligible during that year or in the first year the executive officer becomes retirement eligible. The remainder of the award vests proportionally over the remaining vesting period. Mr. Hemsley was retirement eligible on the grant date and Mr. Welters became retirement eligible in 2010.

(10)
Vest 100% on the sixth anniversary of the grant date.

(11)
Vest 100% on the fourth anniversary of the grant date. These RSUs are eligible to and did receive dividend equivalents converted into additional shares; accordingly, the number of shares shown has been rounded to the nearest whole share.

38


Table of Contents


2012 Option Exercises and Stock Vested

        The following table presents information regarding the exercise of stock options during fiscal year 2012 by our named executive officers and vesting of restricted stock awards held by our named executive officers for fiscal year 2012.

 
  Option Awards   Stock Awards
Name
  Number of
Shares
Acquired on
Exercise
(#)

  Value
Realized on
Exercise
($)(1)

  Number of
Shares
Acquired on
Vesting
(#)

  Value
Realized on
Vesting
($)

Stephen J. Hemsley

     600,000   12,488,010(2)   284,836   15,345,669(3)
 

David S. Wichmann

  1,008,000   23,438,031(4)   198,502   10,712,240(5)
 

Gail K. Boudreaux

    232,948     4,863,131(6)   218,614   11,839,316(7)
 

Larry C. Renfro

                —                       —          206,424   11,075,613(8)
 

Lori Sweere

       84,056     1,998,075(9)     96,418       5,204,343(10)
 

Anthony Welters

     259,931       5,075,342(11)   203,526     11,002,404(12)
 
(1)
Computed by determining the market value per share of the shares acquired based on the difference between: (a) the per share market value of our common stock at exercise, defined as the closing price on the date of exercise, or the weighted average selling price if same-day sales occurred, and (b) the exercise price of the options.

(2)
Mr. Hemsley's value was computed as described in footnote 1 above and was based on the following:

Date of Award   Exercise Date   Number of
Options Exercised
  Stock Splits Since
Date of Award
  Market Price
at Exercise
  Exercise Price
2/11/2004   12/5/2012   300,000   2:1   $54.0337   $29.7000
2/11/2004   12/6/2012   300,000   2:1   $53.5312   $36.2382
(3)
Reflects the vesting of a portion of the RSUs granted to Mr. Hemsley. The value realized on vesting was computed based on the following:

Date of Award   Vesting Date   Number of Shares
Acquired on Vesting
  Market Price
at Vesting
  Value Realized
on Vesting
2/23/2009       2/3/2012   14,423   $51.31   $   740,044
  2/9/2010       2/9/2012   11,364   $53.06   $   602,974
  2/9/2011       2/9/2012   26,004   $53.06   $1,379,784
  2/9/2011   12/28/2012   28,483   $53.86   $1,534,113
  2/7/2012   12/28/2012   21,058   $53.86   $1,134,166

Date of Award   Performance Period
Completion Date
  Number of Shares
Acquired on Vesting
  Market Price at End of
Performance Period
  Value Realized
on Vesting
2/9/2010   12/31/2012   181,820   $54.24   $9,861,917

39


Table of Contents

(4)
Mr. Wichmann's value was computed as described in footnote 1 above and was based on the following:

Date of Award   Exercise Date   Number of
Options Exercised
  Stock Splits Since
Date of Award
  Market Price
at Exercise
  Exercise Price
    8/5/2002       2/9/2012   200,000   4:1   $53.2064   $22.1100
  2/12/2003   11/29/2012   200,000   4:1   $53.6255   $22.5086
11/28/2003   11/29/2012   112,500   2:1   $53.6529   $29.3986
11/28/2003   11/29/2012     37,500   2:1   $53.5300   $26.9500
    8/6/2004   11/29/2012     75,000   2:1   $53.8554   $31.5350
    8/6/2004   11/29/2012     75,000   2:1   $53.8870   $33.1236
  12/7/2004   11/29/2012   154,000   2:1   $54.2210   $42.2986
  12/7/2004   11/29/2012   154,000   2:1   $54.1531   $39.8500
(5)
Reflects the vesting of a portion of the RSUs granted to Mr. Wichmann. The value realized on vesting was computed based on the following:

Date of Award   Vesting Date   Number of Shares
Acquired on Vesting
  Market Price
at Vesting
  Value Realized
on Vesting
2/23/2009       2/3/2012     9,615   $51.31   $493,346
  2/9/2010       2/9/2012     7,576   $53.06   $401,983
  2/9/2011       2/9/2012   18,053   $53.06   $957,915
  6/5/2008       6/5/2012     9,113   $56.04   $510,693
  2/9/2011   12/28/2012   18,311   $53.86   $986,231
  2/7/2012   12/28/2012   14,620   $53.86   $787,425

Date of Award   Performance Period
Completion Date
  Number of Shares
Acquired on Vesting
  Market Price at end of
Performance Period
  Value Realized
on Vesting
2/9/2010   12/31/2012   121,214   $54.24   $6,574,647
(6)
Ms. Boudreaux's value was computed as described in footnote 1 above and was based on the following:

Date of Award   Exercise Date   Number of
Options Exercised
  Stock Splits Since
Date of Award
  Market Price
at Exercise
  Exercise Price
    6/5/2008   1/11/2012   96,825     $52.6200   $33.9400
2/23/2009   1/11/2012   56,562     $52.6200   $29.7400
  2/9/2010   1/11/2012   19,006     $52.6200   $33.0000
  6/5/2008     9/7/2012   32,275     $54.8900   $33.9400
2/23/2009     9/7/2012   28,280     $54.8900   $29.7400
(7)
Reflects the vesting of a portion of the RSUs granted to Ms. Boudreaux. The value realized on vesting was computed based on the following:

Date of Award   Vesting Date   Number of Shares
Acquired on Vesting
  Market Price
at Vesting
  Value Realized
on Vesting
2/23/2009       2/3/2012     9,615   $51.31   $   493,346
  2/9/2010       2/9/2012     7,576   $53.06   $   401,983
  2/9/2011       2/9/2012   18,053   $53.06   $   957,915
  6/5/2008       6/5/2012   29,225   $56.04   $1,637,769
  2/9/2011   12/28/2012   18,311   $53.86   $   986,231
  2/7/2012   12/28/2012   14,620   $53.86   $   787,425

40


Table of Contents

Date of Award   Performance Period
Completion Date
  Number of Shares
Acquired on Vesting
  Market Price at End of
Performance Period
  Value Realized
on Vesting
2/9/2010   12/31/2012   121,214   $54.24   $6,574,647
(8)
Reflects the vesting of a portion of the RSUs granted to Mr. Renfro. The value realized on vesting was computed based on the following:

Date of Award   Vesting Date   Number of Shares
Acquired on Vesting
  Market Price
at Vesting
  Value Realized
on Vesting
2/3/2009       2/3/2012   26,650   $51.31   $1,367,412
2/9/2010       2/9/2012     7,576   $53.06   $   401,983
2/9/2011       2/9/2012   18,053   $53.06   $   957,915
2/9/2011   12/28/2012   18,311   $53.86   $   986,231
2/7/2012   12/28/2012   14,620   $53.86   $   787,425

Date of Award   Performance Period
Completion Date
  Number of Shares
Acquired on Vesting
  Market Price at End of
Performance Period
  Value Realized
on Vesting
2/9/2010   12/31/2012   121,214   $54.24   $6,574,647
(9)
Ms. Sweere's value was computed as described in footnote 1 above and was based on the following:

Date of Award   Exercise Date   Number of
Options Exercised
  Stock Splits Since
Date of Award
  Market Price
at Exercise
  Exercise Price
  6/5/2008   2/27/2012   25,455     $55.6500   $33.9400
2/23/2009   2/27/2012   14,140     $55.6500   $29.7400
  2/9/2010   2/27/2012   19,006     $55.6500   $33.0000
  6/5/2008   6/19/2012   25,455     $59.4200   $33.9400
(10)
Reflects the vesting of a portion of the RSUs granted to Ms. Sweere. The value realized on vesting was computed based on the following:

Date of Award   Vesting Date   Number of Shares
Acquired on Vesting
  Market Price
at Vesting
  Value Realized
on Vesting
2/23/2009       2/3/2012   4,808   $51.31   $246,698
  2/9/2010       2/9/2012   3,788   $53.06   $200,991
  2/9/2011       2/9/2012   8,024   $53.06   $425,734
  6/5/2008       6/5/2012   4,556   $56.04   $255,318
  2/9/2011   12/28/2012   8,138   $53.86   $438,294
  2/7/2012   12/28/2012   6,497   $53.86   $349,930

Date of Award   Performance Period
Completion Date
  Number of Shares
Acquired on Vesting
  Market Price at End of
Performance Period
  Value Realized
on Vesting
2/9/2010   12/31/2012   60,608   $54.24   $3,287,378

41


Table of Contents

(11)
Mr. Welter's value was computed as described in footnote 1 above and was based on the following:

Date of Award   Exercise Date   Number of
Options Exercised
  Stock Splits Since
Date of Award
  Market Price
at Exercise
  Exercise Price
11/4/2004   4/23/2012     70,000   2:1   $59.1547   $42.8650
  6/5/2008   4/23/2012     23,639     $59.5100   $33.9400
2/23/2009   4/23/2012     28,280     $59.5100   $29.7400
  2/9/2010   4/23/2012     38,012     $59.5100   $33.0000
11/4/2004     6/7/2012   100,000   2:1   $57.6752   $42.8650
(12)
Reflects the vesting of a portion of the RSUs granted to Mr. Welters. The value realized on vesting was computed based the following:

Date of Award   Vesting Date   Number of Shares
Acquired on Vesting
  Market Price
at Vesting
  Value Realized
on Vesting
2/23/2009       2/3/2012     9,615   $51.31   $493,346
  2/9/2010       2/9/2012     7,576   $53.06   $401,983
  2/9/2011       2/9/2012   16,728   $53.06   $887,610
  6/5/2008       6/5/2012   17,087   $56.04   $957,555
  2/9/2011   12/28/2012   18,311   $53.86   $986,231
  2/7/2012   12/28/2012   12,041   $53.86   $648,533

Date of Award   Performance Period
Completion Date
  Number of Shares
Acquired on Vesting
  Market Price at End of
Performance Period
  Value Realized
on Vesting
2/9/2010   12/31/2012   121,214   $54.24   $6,574,647


2012 Pension Benefits

        The following table presents information regarding the present value of accumulated benefits payable under our non-qualified defined-benefit pension plans covering our named executive officers for fiscal year 2012.

Name
  Plan Name
  Number of
Years Credited
Service (#)

  Present Value of
Accumulated
Benefit ($)

  Payments
During Last
Fiscal Year ($)

Stephen J. Hemsley

  Individual Agreement for
Supplemental Executive
Retirement Pay
  (1)   10,703,229(1)  
 

David S. Wichmann

  N/A   —                 —    
 

Gail K. Boudreaux

  N/A   —                 —    
 

Larry C. Renfro

  N/A   —                 —    
 

Lori Sweere

  N/A   —                 —    
 

Anthony Welters

  N/A   —                 —    
 
(1)
Upon termination of Mr. Hemsley's employment for any reason, a lump-sum benefit of $10,703,229 will be paid six months and one day after his termination. In the event of Mr. Hemsley's death prior to payment of his entire supplemental retirement benefit, his surviving spouse will receive any unpaid benefit. The dollar amount of this lump sum benefit was frozen in 2006 and will not vary, regardless of Mr. Hemsley's age, years of service or average compensation at the time of his actual termination.

42


Table of Contents


2012 Non-Qualified Deferred Compensation

        The following table presents information as of the end of 2012 regarding the non-qualified deferred compensation arrangements for our named executive officers for fiscal year 2012.

Name (a)
  Executive
Contributions
in Last FY ($)(1)(2)
(b)

  Registrant
Contributions
in Last FY ($)(1)(3)
(c)

  Aggregate
Earnings
in Last FY ($)(4)
(d)

  Aggregate
Withdrawals/
Distributions ($)(5)
(e)

  Aggregate
Balance at
Last FYE ($)(1)
(f)

Stephen J. Hemsley

  296,400   148,200   496,435     8,707,353
 

David S. Wichmann

  174,000     87,000   310,030     2,418,230
 

Gail K. Boudreaux

  256,000     87,000     96,217     1,160,376
 

Larry C. Renfro

    51,000     25,500     15,290        232,912
 

Lori Sweere

  108,000     54,000     72,910        742,840
 

Anthony Welters

  153,000     76,500   107,060     1,437,300
 
(1)
All amounts in columns (b) and (c) have been reported as compensation. In addition to the amounts shown in columns (b) and (c), column (f) includes the following amounts reported in the summary compensation table for prior years:

Name
  Amount
Previously
Reported
   

Stephen J. Hemsley

  $6,178,276    

David S. Wichmann

  $   995,502    

Gail K. Boudreaux

  $   555,923    

Larry C. Renfro

  $   136,177    

Lori Sweere

  $          —      

Anthony Welters

  $   772,557    
(2)
Named executive officers are eligible to participate in our Executive Savings Plan, which is a non-qualified deferred compensation plan. Under the plan, employees may generally defer up to 80% of their eligible annual base salary (100% prior to January 1, 2007) and up to 100% of their annual and long-term cash incentive awards. Amounts deferred, including Company credits, are credited to a bookkeeping account maintained for each participant, and are distributable pursuant to an election made by the participant as to time and form of payment that is made prior to the time of deferral. The Company maintains a Rabbi Trust for the plan. The Company's practice is to set aside amounts in the Rabbi Trust to be used to pay for all benefits under the plan, but the Company is under no obligation to do so except in the event of a change in control.

(3)
For the first 6% of the employee's base salary and annual incentive award deferrals under our Executive Savings Plan, the Company provides a matching credit of up to 50% of amounts deferred at the time of each deferral. This matching credit does not apply to deferrals of long-term cash incentive awards, or other special incentive awards.

(4)
Amounts deferred are credited with earnings from measuring investments selected by the employee from a collection of unaffiliated mutual funds identified by the Company. The Executive Savings Plan does not credit above-market earnings or preferential earnings to amounts deferred. The returns on the mutual funds available to employees during 2012 ranged from 0.11% to 26.15%, with a median return of 14.87% for the year ended December 31, 2012. Employees may change their selection of measuring investments on a daily basis.

(5)
Under our Executive Savings Plan, unless an employee in the plan elects to receive distributions during the term of his or her employment with the Company, benefits will be paid no earlier than at the beginning of the year following the employee's termination. However, upon a showing of severe financial hardship, an employee may be allowed to access funds in his or her deferred compensation account earlier. Benefits can be received either as a lump sum payment, in five or ten annual installments, in pre-selected amounts and on pre-selected dates, or a combination thereof. An employee may change his or her election with respect to the timing and form of distribution for such deferrals under certain conditions. However, for deferrals relating to services performed on or after January 1, 2004, employees may not accelerate the timing of the distributions.

43


Table of Contents


Executive Employment Agreements

        We have entered into an employment agreement with each of the named executive officers.

Stephen J. Hemsley

        On November 7, 2006, the Board of Directors entered into an employment agreement with Mr. Hemsley to serve as President and CEO. On December 14, 2010, the employment agreement was amended to extend the employment period to December 1, 2014. The employment agreement will extend automatically for additional one-year periods after December 1, 2014 unless sooner terminated in accordance with the terms of the employment agreement. During the period of his employment, the Board of Directors will nominate Mr. Hemsley for election to the Board of Directors by the shareholders of the Company.

        Under the employment agreement, Mr. Hemsley receives a base salary of $1,300,000, with any increases at the sole discretion of the Compensation Committee and ultimately the independent members of the Board of Directors. The employment agreement does not set any minimum or target level for any bonus or other incentive compensation. All bonus and incentive compensation awards are solely at the discretion of the Compensation Committee. Mr. Hemsley is eligible to participate in the Company's generally available employee benefit programs.

        Upon termination of Mr. Hemsley's employment for any reason, he is entitled to a previously accrued and vested lump sum supplemental retirement benefit of $10,703,229 to be paid six months and one day after his termination.

        If Mr. Hemsley's employment is terminated by the Company without Cause, other than upon expiration of the term of the employment agreement, or by Mr. Hemsley for Good Reason, the Company will pay Mr. Hemsley a lump sum in an amount equal to his annual base salary for the longer of the remainder of the term under the employment agreement or twelve months.

        If Mr. Hemsley's employment is terminated because of his death or permanent disability, the Company will pay him or his beneficiaries a lump sum in an amount equal to two years' total compensation of base salary plus the average bonus for the last two calendar years, excluding any special or one-time bonus or incentive compensation payments.

        If Mr. Hemsley is terminated by the Company for Cause, by Mr. Hemsley without Good Reason or because of his retirement or upon expiration of the term of the employment agreement, he will not be entitled to any further compensation from the Company other than earned but unpaid salary and benefits.

        As defined in the employment agreement, "Cause" generally means willful and continued failure to perform his duties after written notice and a failure to remedy the deficiency, a violation of the Company's Code of Conduct that is materially detrimental to the Company and is not remedied after written notice, engaging in fraud, material dishonesty or gross misconduct in connection with the Company's business, conviction of a felony or willful and material breach of the employment agreement that is not remedied after written notice. As defined in the employment agreement, "Good Reason" generally means an assignment of duties inconsistent with his position or duties or other diminution of duties, a relocation of primary work location by more than 25 miles, failure by the Board of Directors to elect Mr. Hemsley as CEO, failure by the Board of Directors to nominate Mr. Hemsley to serve on the Board of Directors, the Company's failure to pay or provide Mr. Hemsley's base salary, incentive compensation or other benefits, or any other material breach of Mr. Hemsley's employment agreement that is not remedied.

        Pursuant to the employment agreement, Mr. Hemsley is subject to provisions prohibiting his solicitation of the Company's employees and customers or competing with the Company during the term of the employment agreement and the longer of two years following termination or the period that severance payments are made to him under the employment agreement. In addition, he is prohibited at all times from disclosing confidential information related to the Company.

44


Table of Contents

Gail K. Boudreaux, David S. Wichmann, Larry C. Renfro, Lori Sweere and Anthony Welters

        Ms. Boudreaux entered into an employment agreement with the Company on April 8, 2008, which agreement was amended and restated most recently on August 8, 2011. Mr. Wichmann entered into an employment agreement with the Company that was effective December 1, 2006 and was amended and restated most recently effective as of December 31, 2008. Mr. Renfro entered into an employment agreement with the Company that was effective January 29, 2009 and was amended and restated most recently as of March 26, 2012. Ms. Sweere entered into an employment agreement with the Company that was effective June 29, 2007, and was amended and restated most recently effective as of December 31, 2008. Mr. Welters entered into an employment agreement with the Company on April 17, 2007, which agreement was amended and restated most recently effective as of December 31, 2008. The titles of these executive officers are specified in the 2012 Summary Compensation Table above.

        Under their respective employment agreements, Mses. Boudreaux and Sweere and Messrs. Wichmann, Renfro and Welters report to the President and CEO of the Company and receive base salaries with any adjustments at the discretion of the Compensation Committee. These executive officers are eligible to participate in the Company's incentive compensation plans. The target and maximum amount of any actual bonus payable to each executive officer is in the discretion of the Compensation Committee. These executive officers also are eligible to receive stock-based awards in the discretion of the Compensation Committee and to participate in the Company's generally available employee benefit programs. During the term of their respective employment, in addition to the Company's generally available benefits, the Company will provide each executive officer, at the Company's expense, a $2 million face value term life insurance policy. In addition, the executive officers also participate in a long-term disability policy, at the Company's expense, which provides an annual benefit that covers 60% of eligible base salary in the event of a qualifying long-term disability, subject to the terms of the policy.

        The employment agreements for Mses. Boudreaux and Sweere and Mr. Renfro also contain provisions for equity awards and bonuses in connection with commencement of employment. In addition, the employment agreement for Mr. Renfro states that for purposes of determining his eligibility for retirement, he will receive two years of service credit for each year he remains employed with the Company after age 59, clarifies that he will be deemed eligible for retirement if, prior to otherwise becoming eligible for retirement, his employment is terminated by the Company without Cause or he resigns for Good Reason, and amends his outstanding and future equity awards to reflect these provisions.

        Each employment agreement and each executive officer's employment may be terminated (a) at any time by mutual agreement or, with prior written notice, by the Company with or without Cause, (b) at any time by the executive officer with or without Good Reason and (c) upon the executive officer's death or disability that renders him or her incapable of performing the essential functions of his job, with or without reasonable accommodation. If an executive officer's employment is terminated by the Company without Cause or by the executive officer for Good Reason, the Company will provide the executive officer with outplacement services consistent with those provided to similarly situated executives and pay the executive officer severance compensation equal to the sum of (a) 200% of his or her annualized base salary as of his or her termination date, (b) 200% of the average of his or her last two calendar year bonuses, excluding any equity awards and any special or one-time bonus or incentive compensation payments, and (c) $12,000 to offset the costs of benefit continuation coverage. The severance compensation will be payable over a 24-month period for Mses. Boudreaux and Sweere and Messrs. Wichmann and Welters and will be payable over a 12-month period for Mr. Renfro.

        For purposes of each applicable employment agreement, "Cause" generally means (a) material failure to follow the Company's reasonable direction or to perform any duties reasonably required on material matters, (b) a material violation of, or failure to act upon or report known or suspected violations of, the Company's Principles of Integrity and Compliance, (c) conviction of a felony, commission of any criminal, fraudulent or dishonest act or any conduct that is materially detrimental to the interests of the Company, or (d) material breach of the employment agreement. The employment agreement provides that the Company will, within 120 days of the discovery of the conduct constituting Cause, give the executive officer written notice specifying in reasonable

45


Table of Contents

detail the conduct constituting Cause and the executive officer will have 60 days to remedy the conduct, if the conduct is reasonably capable of being remedied. In any instance where the Company may have grounds for Cause, failure by the Company to provide written notice of the grounds for Cause within 120 days of discovery will be a waiver of its right to assert the subject conduct as a basis for termination for Cause.

        For purposes of each applicable employment agreement, "Good Reason" will generally exist if the Company (a) reduces the executive officer's base salary or long- or short-term target bonus percentage other than in connection with a general reduction affecting a group of similarly situated employees, (b) moves the executive officer's primary work location more than 50 miles, (c) makes changes that substantially diminish the executive officer's duties or responsibilities, or (d) changes the executive officer's reporting relationship away from the President and CEO of the Company (except that "Good Reason" will also exist for Mr. Renfro if the Company makes a change so that he no longer holds the position of CEO of Optum, Inc. or another equivalent position). The employment agreement provides that the executive officer must give the Company written notice specifying in reasonable detail the circumstances constituting Good Reason within 120 days of becoming aware of the circumstances, or those circumstances will not constitute Good Reason. If the circumstances constituting Good Reason are reasonably capable of being remedied, the Company will have 60 days to remedy the circumstances.

        Pursuant to their respective employment agreements, each executive officer is subject to provisions prohibiting his or her solicitation of the Company's employees or competing with the Company during the term of the employment agreement and two years following termination for any reason. In addition, each executive officer is prohibited at all times from disclosing confidential information related to the Company.

46


Table of Contents


Potential Payments Upon Termination or Change in Control

        The following table describes the potential payments to named executive officers upon termination of employment or a change in control of the Company as of December 31, 2012. Amounts are calculated based on the benefits available to the named executive officers under existing plans and arrangements, including each of their employment agreements described under "Executive Employment Agreements."

 
  For Good Reason
or Not For Cause
($)

  Death
($)

  Disability
($)

  Retirement
($)

  Change
In Control
($)

Stephen J. Hemsley

                   

Cash Payments

    2,491,667     9,640,000     9,640,000                   —                     —  

Annual Cash Incentive(1)

                  —       4,550,000     4,550,000     4,550,000                   —  

Long-Term Cash Incentive(2)

                  —       1,300,000     1,300,000     1,300,000     1,300,000

SERP

  10,703,229   10,703,229   10,703,229   10,703,229   10,703,229

Insurance Benefits

                  —                     —          420,000                   —                     —  

Acceleration of Equity(3)

  16,438,488   12,501,911   12,501,911   16,438,488   16,438,488
 

Total(4)

  29,633,384   38,695,140   39,115,140   32,991,717   28,441,717
 

David S. Wichmann

                   

Cash Payments

    5,162,000                   —                     —                     —                     —  

Annual Cash Incentive(1)

                  —       2,550,000     2,550,000     2,550,000                   —  

Long-Term Cash Incentive(2)

                  —          846,154        846,154        846,154        846,154

Insurance Benefits

                  —       2,000,000        420,000                   —                     —  

Acceleration of Equity(3)

    9,876,294   11,449,139   11,449,139                   —     13,979,814
 

Total(4)

  15,038,294   16,845,293   15,265,293     3,396,154   14,825,968
 

Gail K. Boudreaux

                   

Cash Payments

    5,162,000                   —                     —                     —                     —  

Annual Cash Incentive(1)

                  —       2,550,000     2,550,000     2,550,000                   —  

Long-Term Cash Incentive(2)

                  —          846,154        846,154        846,154        846,154

Insurance Benefits

                  —       2,000,000        420,000                   —                     —  

Acceleration of Equity(3)

    9,876,294   11,449,139   11,449,139                   —     13,979,814
 

Total(4)

  15,038,294   16,845,293   15,265,293     3,396,154   14,825,968
 

Larry C. Renfro

                   

Cash Payments

    5,162,000                   —                     —                     —                     —  

Annual Cash Incentive(1)

                  —       2,550,000     2,550,000     2,550,000                   —  

Long-Term Cash Incentive(2)

                  —          846,154        846,154        846,154        846,154

Insurance Benefits

                  —       2,000,000        420,000                   —                     —  

Acceleration of Equity(3)

  14,779,333   12,248,657   12,248,657                   —     14,779,333
 

Total(4)

  19,941,333   17,644,811   16,064,811     3,396,154   15,625,487
 

Lori Sweere

                   

Cash Payments

    3,412,000                   —                     —                     —                     —  

Annual Cash Incentive(1)

                  —       1,200,000     1,200,000     1,200,000                   —  

Long-Term Cash Incentive(2)

                  —          600,000        600,000        600,000        600,000

Insurance Benefits

                  —       2,000,000        360,000                   —                     —  

Acceleration of Equity(3)

    4,547,446     3,775,179     3,775,179                   —       4,899,900
 

Total(4)

    7,959,446     7,575,179     5,935,179     1,800,000     5,499,900
 

Anthony Welters

                   

Cash Payments

    4,712,000                   —                     —                     —                     —  

Annual Cash Incentive(1)

                  —       2,250,000     2,250,000     2,250,000                   —  

Long-Term Cash Incentives(2)

                  —          748,718        748,718        748,718        748,718

Insurance Benefits

                  —       2,000,000        420,000                   —                     —  

Acceleration of Equity(3)

  10,232,453     7,875,562     7,875,562   10,232,453   10,232,453
 

Total(4)

  14,944,453   12,874,280   11,294,280   13,231,171   10,981,171
 
(1)
Represents the maximum amount the Compensation Committee may in its discretion determine, but is not required, to pay the executive officer (or the executive officer's estate, if applicable) based upon a pro-rated portion of the award that

47


Table of Contents

(2)
With respect to "Death," "Disability" and "Retirement," represents the maximum amount the Compensation Committee may in its discretion determine, but is not required, to pay the executive officer (or the executive officer's estate, if applicable) based upon the portion of the incentive periods the executive officer served prior to death, disability or retirement and measurement of Company and executive performance based on performance through the end of the fiscal year of the Company which ends closest to the executive officer's date of death, disability or retirement, calculated at the achievement of the maximum performance target, as more fully described in footnote 3 to the 2012 Grants of Plan-Based Awards table. With respect to "Change in Control," represents the amount payable by the Company or its successor to each executive officer (or credit to the named executive officer's account in the Company's Executive Savings Plan if a timely deferral election is in effect), which is a pro-rated portion of the maximum long-term cash incentive award for which the executive officer is eligible for the 2011-2013 and 2012-2014 performance periods.

(3)
Represents the (i) unvested RSUs multiplied by the closing stock price on December 31, 2012 ($54.24), (ii) intrinsic value of the unvested stock options and SARs which is calculated based on the difference between the closing price of our stock on December 31, 2012 ($54.24), and the exercise or grant price of the unvested stock options and SARs as of that date, and (iii) the number of performance shares earned if target performance is achieved multiplied by the closing stock price on December 31, 2012 ($54.24). If maximum performance is achieved for the performance shares, the amounts for Acceleration of Equity would be (a) for "For Good Reason or Not for Cause," $24,599,655 for Mr. Hemsley; $15,122,821 each for Mr. Wichmann and Ms. Boudreaux; $20,025,860 for Mr. Renfro; $6,879,223 for Ms. Sweere, and $15,218,356 for Mr. Welters; (b) for "Death" and "Disability," $16,726,502 for Mr. Hemsley; $14,164,990 each for Mr. Wichmann and Ms. Boudreaux; $14,964,508 for Mr. Renfro; $4,982,236 for Ms. Sweere, and $10,504,575 for Mr. Welters; (c) for "Retirement," $24,599,655 for Mr. Hemsley and $15,218,356 for Mr. Welters and (d) for "Change in Control," $24,599,655 for Mr. Hemsley; $19,226,341 each for Mr. Wichmann and Ms. Boudreaux; $20,025,860 for Mr. Renfro; $7,231,678 for Ms. Sweere; and $15,218,356 for Mr. Welters.

For "For Good Reason or Not for Cause," the amount includes the value of unvested equity awards held by the named executive officer that will not immediately vest upon termination but will continue to vest through any applicable severance. For "Retirement," the amount includes the value of certain unvested equity awards granted in 2009 and 2010 that will continue to vest and be exercisable for a period of five years (but not after the award's expiration date). The value of the awards that will not immediately vest is based on their intrinsic values on December 31, 2012. However, because these awards would continue to vest after termination of employment or retirement, the actual value the named executive officer would receive is not determinable. At December 31, 2012, Mr. Hemsley and Mr. Welters had met the retirement eligibility provisions. Mr. Renfro's employment agreement as revised in 2012 provides that he will be deemed retirement eligible if he terminates employment for Good Reason or his employment is terminated by the Company without Cause.

(4)
Does not include value of benefits, plans or arrangements that would be paid or available following termination of employment that do not discriminate in scope, terms or operation in favor of our executive officers and that are generally available to all salaried employees or accrued balances under any non-qualified deferred compensation plan that is described above.


PROPOSAL 2 — ADVISORY APPROVAL OF THE COMPANY'S EXECUTIVE COMPENSATION

        The Board of Directors recognizes the significant interest of shareholders in executive compensation matters. We are seeking shareholders' views on our executive compensation philosophy and practices through an advisory vote on the following resolution at the Annual Meeting:

The Compensation Discussion and Analysis, the compensation tables and the related narrative disclosures appear on pages 16-48 of this proxy statement.

48


Table of Contents

        As discussed in the Compensation Discussion and Analysis, the Board of Directors believes that our executive compensation program attracts and retains highly qualified executives while linking executive compensation directly to Company-wide performance. In deciding how to vote on this proposal, the Board of Directors asks you to consider the following key points with regard to our executive compensation program:

49


Table of Contents

        This advisory proposal, commonly referred to as a "say-on-pay" proposal, is not binding on the Board of Directors. Although the voting results are not binding, the Board and the Compensation Committee will review and consider them when evaluating our executive compensation program. Our shareholders expressed strong support for our executive compensation program in the say-on-pay votes at our 2011 and 2012 Annual Meetings of Shareholders. The next say-on-pay advisory vote will occur at our 2014 Annual Meeting of Shareholders.

        In addition to our annual advisory vote to approve the Company's executive compensation, we are committed to ongoing engagement with our shareholders on executive compensation and corporate governance issues. These engagement efforts take place throughout the year through meetings, telephone calls and correspondence involving our senior management, directors and representatives of our shareholders.

        For these reasons, the Board of Directors recommends that you vote FOR approval of the compensation of the named executive officers, as disclosed in this proxy statement. Proxies will be voted FOR approval of the compensation of the named executive officers unless you specify otherwise.


DIRECTOR COMPENSATION

        Our director compensation and benefit program is designed to compensate our non-employee directors fairly for work required for a company of our size and scope and to align their interests with the long-term interests of our shareholders. Director compensation reflects our desire to attract, retain and use the expertise of highly qualified people serving on the Company's Board of Directors. The Compensation Committee reviews the compensation level of our non-employee directors on an annual basis and makes recommendations to the Board of Directors. Mr. Hemsley and Dr. Bueno are employee directors and do not receive additional compensation for serving as a director.

        The following table highlights the material elements of our director compensation program:

Compensation Element
  Compensation Value

Annual Cash Retainer

  $125,000
 

Annual Audit Committee Chair Cash Retainer

  $  15,000
 

Annual Compensation Committee Chair Cash Retainer

  $  15,000
 

Annual Nominating Committee Chair Cash Retainer

  $  10,000
 

Annual Public Policy Committee Chair Cash Retainer

  $  10,000
 

Annual Board Chair Cash Retainer

  $300,000
 

Annual Equity Award

  $150,000 aggregate fair value of deferred stock units
 

Initial Equity Award to New Directors

  6,250 deferred stock units
 

Equity Conversion Program

            Cash compensation converted into deferred
          stock units at the director's election
 


Cash Compensation

        Director cash compensation is payable on a quarterly basis in arrears and prorated if the director did not serve the entire quarter. Directors may elect to convert cash compensation into equity or defer receipt of the cash compensation to a later date.


Equity-Based Compensation

        Non-employee directors receive grants of deferred stock units under the 2011 Stock Incentive Plan. To continue to align the interests of directors with the long-term interests of our shareholders, each director is required to retain all deferred stock units granted until completion of his or her service on the Board of Directors. Upon completion of service, the deferred stock units convert to an equal number of shares of the Company's common stock. A director may defer receipt of the shares for up to ten years after completion of service.

50


Table of Contents

Initial Equity Award

        A new non-employee director receives an initial one-time grant of 6,250 deferred stock units on the date of the director's appointment to the Board of Directors. The new director award vests at a rate of 25% per year for four years, subject to continued service on the Board of Directors on the vesting date. Each director is required to retain the deferred stock units until completion of his or her service on the Board of Directors.

Annual Equity Award

        Non-employee directors also receive an annual grant of deferred stock units having an annual aggregate fair value of $150,000. This grant is in consideration of general service and responsibilities and required meeting preparation. The grants are issued quarterly in arrears on the first business day following the end of each fiscal quarter and prorated if the director did not serve the entire quarter. The number of deferred stock units granted is determined by dividing $37,500 (the quarterly value of the annual equity award) by the closing stock price on the grant date, rounded up to the nearest share. These awards are vested immediately upon grant and must be held until the director's completion of his or her service on the Board of Directors.

Deferred Stock Unit Dividends

        The Company pays dividend equivalents in the form of additional deferred stock units on all outstanding deferred stock units. Dividend equivalents are paid at the same rate and at the same time that dividends are paid to Company shareholders. The dividend equivalents are subject to the same vesting conditions as the underlying grant and must be held until the director's completion of his or her service on the Board of Directors.


Stock Ownership Guidelines

        Under our stock ownership guidelines, we require non-employee directors to achieve ownership of shares of the Company's common stock (excluding stock options, but including vested deferred stock units and vested restricted stock units) having a fair market value equal to five times the directors' annual base cash retainer. Non-employee directors must comply with the stock ownership guidelines within five years of their appointment to the Board of Directors, other than directors serving when we last revised the guidelines in August 2010, who must comply with the new stock ownership guidelines by August 2015. All of our non-employee directors have met the stock ownership requirement.


Other Compensation

        We reimburse directors for any out-of-pocket expenses incurred in connection with service as a director. We also provide health care coverage to directors but only if the director is not eligible for coverage under another group health care benefit program. Health care coverage is provided generally on the same terms and conditions as current employees. Upon retirement from the Board of Directors, current directors may continue to obtain health care coverage under benefit continuation coverage, and after the lapse of such coverage, under the Company's post-employment medical plan for up to a total of ninety-six months if they are otherwise eligible.

        The Company maintains a program through which it will match up to $15,000 of charitable donations made by each director for each calendar year. The directors do not receive any financial benefit from this program because the charitable income tax deductions accrue solely to the Company. Donations under the program may not be made to family trusts, partnerships or similar organizations.


Equity Conversion Program

        Directors may elect to convert any or all director cash compensation earned into deferred stock units, which must be held until completion of his or her service on the Board. The conversion grants are made on the day the eligible cash compensation becomes payable to the director and immediately vest upon grant. If a director elects to convert his or her cash compensation into deferred stock units, he or she receives the number of deferred stock units equal to the cash compensation foregone, divided by the closing price of our common stock on the date of grant, rounded up to the nearest share.

51


Table of Contents


Cash Deferral Plan

        Under our Directors' Compensation Deferral Plan ("Director Deferral Plan"), non-employee directors may elect annually to defer receipt of all or a percentage of their cash compensation. Amounts deferred are credited to a bookkeeping account maintained for each director participant that uses a collection of unaffiliated mutual funds as measuring investments. Subject to certain additional rules set forth in the Director Deferral Plan, a participating director may elect to receive the distribution in one of the following ways:


2012 Director Compensation Table

        The following table provides summary information for the year ended December 31, 2012 relating to compensation paid to or accrued by us on behalf of our non-employee directors who served in this capacity during 2012:

Name
  Fees Earned
or Paid in
Cash
($)(1)

  Stock
Awards
($)(2)

  Option
Awards
($)(3)

  Change in
Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings
($)(4)

  All Other
Compensation
($)(5)

  Total
($)

William C. Ballard, Jr.

  136,250   150,149       17,500   303,899
 

Richard T. Burke

  425,000   150,149       26,031   601,180
 

Robert J. Darretta

  125,000   150,065         2,500   277,565
 

Michele J. Hooper

  135,000   150,149       17,465   302,614
 

Rodger A. Lawson

  125,000   150,149       31,713   306,862
 

Douglas W. Leatherdale

  140,000   150,149       17,500   307,649
 

Glenn M. Renwick

  128,750   150,098       17,500   296,348
 

Kenneth I. Shine, M.D.

  125,000   150,149       17,500   292,649
 

Gail R. Wilensky, Ph.D.

  135,000   150,149       17,500   302,649
 
(1)
Mr. Darretta and Mr. Renwick elected to convert 2012 cash compensation into 2,244 and 2,311 deferred stock units, respectively. Mr. Leatherdale elected to defer all 2012 cash compensation under the Director Deferral Plan.

(2)
The amounts reported reflect the aggregate grant date fair value of the stock awards granted in 2012 computed in accordance with FASB ASC Topic 718, based on the closing stock price on the grant date. The amounts reported include for each director the aggregate grant date fair value of the annual equity award of deferred stock units granted in quarterly installments. The amounts reflect the value of fractional shares issued with the quarterly installments as we round grants of deferred stock units up to the nearest whole share. For Messrs. Darretta and Renwick, we combined the cash compensation they elected to convert into deferred stock units on a quarterly basis and the value of the quarterly deferred stock unit grant prior to determining the number of deferred stock units to be granted each quarter.

52


Table of Contents

Name
  January 3,
2012
($)
  April 2,
2012
($)
  July 2,
2012
($)
  October 1,
2012
($)

William C. Ballard, Jr.

  37,536   37,541   37,525   37,546

Richard T. Burke

  37,536   37,541   37,525   37,546

Robert J. Darretta*

  68,791   68,757   68,750   68,768

Michele J. Hooper

  37,536   37,541   37,525   37,546

Rodger A. Lawson

  37,536   37,541   37,525   37,546

Douglas W. Leatherdale

  37,536   37,541   37,525   37,546

Glenn M. Renwick*

  68,791   68,757   68,750   72,551

Kenneth I. Shine, M.D.

  37,536   37,541   37,525   37,546

Gail R. Wilensky, Ph.D.

  37,536   37,541   37,525   37,546
 

*
Includes the value of deferred stock units issued upon conversion of annual cash retainer as described in footnote 1 above of $125,000 for Mr. Darretta and $128,750 for Mr. Renwick.

Name
  Restricted
Stock Units
  Deferred
Stock Units

William C. Ballard, Jr.

        —     12,695

Richard T. Burke

        —     12,695

Robert J. Darretta

  3,125   20,919

Michele J. Hooper

  6,250   12,695

Rodger A. Lawson

        —     11,244

Douglas W. Leatherdale

        —     12,695

Glenn M. Renwick

  3,125   20,986

Kenneth I. Shine, M.D.

  6,250   14,656

Gail R. Wilensky, Ph.D.

        —     12,695
(3)
The Company did not grant stock option awards to directors in 2012. As of December 31, 2012, our non-employee directors held outstanding (and unexercised) option awards as follows: Mr. Ballard — 183,000 options; Mr. Burke — 186,600 options; Mr. Darretta — 56,621 options; Ms. Hooper — 35,000 options; Mr. Leatherdale — 191,750 options; Mr. Renwick — 33,929 options; Dr. Shine — 2,500 options; and Dr. Wilensky — 197,060 options.

(4)
The Director Deferral Plan does not credit above-market earnings or preferential earnings to the amounts deferred. There are no measuring investments tied to Company stock performance. The measuring investments are a collection of unaffiliated mutual funds identified by the Company.

(5)
In 2012, the Company matched charitable contributions made by directors to charitable organizations selected by directors pursuant to the Company's Board Matching Program as follows: Mr. Ballard — $15,000; Mr. Burke — $15,000; Ms. Hooper — $14,475; Mr. Lawson — $15,000; Mr. Leatherdale — $15,000; Mr. Renwick — $15,000; Dr. Shine — $15,000; and Dr. Wilensky — $15,000. In 2012, the Company also made a $2,500 contribution to a charitable organization selected by each director in lieu of 2011 holiday gifts. We also paid $8,531, $490 and, $14,213 in health care premiums on behalf of Mr. Burke, Ms. Hooper and Mr. Lawson, respectively.

53


Table of Contents


CERTAIN RELATIONSHIPS AND TRANSACTIONS

Approval or Ratification of Related-Person Transactions

        The Board of Directors has adopted a written Related-Person Transactions Approval Policy, which is administered by the Audit Committee. A copy of the policy is available on our website at www.unitedhealthgroup.com. Under the policy, "related-person" transactions are prohibited unless approved or ratified by the Audit Committee. In general, a related-person transaction is any transaction or series of transactions (or amendments thereto) directly or indirectly involving a director, executive officer or shareholder beneficially owning more than five percent of our common stock, or any of their respective immediate family members, in which the Company or its subsidiaries is directly or indirectly a participant and the amount involved exceeds $1.00 (or, in the case of a director, that is not deemed to be immaterial under the Company's Standards for Director Independence).

        Related-person transactions under the policy do not include:

        Under the policy, the Company determines whether a transaction falls under the definition of a related-person transaction requiring review by the Audit Committee. In determining whether to approve or ratify a related-person transaction, the Audit Committee will consider, among other things, whether the terms of the related-person transaction are fair to the Company and on terms at least as favorable as would apply if the other party was not an affiliate; the business reasons for the transaction; whether the transaction could impair the independence of a director under the Company's Standards for Director Independence; and whether the transaction would present an improper conflict of interest for any director or executive officer of the Company.

        Any member of the Audit Committee who has an interest in the transaction under discussion will abstain from voting on the approval of the related-person transaction, but may, if so requested by the Chair of the Audit Committee, participate in some or all of the Audit Committee's discussions of the related-person transaction. Any related-person transaction that is not approved or ratified, as the case may be, will be voided, terminated or amended, or other actions will be taken in each case as determined by the Audit Committee so as to avoid or otherwise address any resulting conflict of interest.

        As required under SEC rules, transactions in which the Company was or is to be a participant and the amount involved exceeds $120,000, and in which any related person had or will have a direct or indirect material interest, are disclosed below.


Related-Person Transactions

Transactions with Edson Bueno

        On October 29, 2012, the Board of Directors elected Dr. Bueno to the Board. Dr. Bueno is the founder, President, CEO and Chairman of Amil Participações S.A. ("Amil"), the largest health care organization in Brazil. On October 26, 2012, the Company acquired approximately 60% of the outstanding shares of Amil from Amil's founding shareholders, including Dr. Bueno, and Amil management. The Company acquired indirectly Amil common shares from Dr. Bueno through the acquisition of 407,687,473 shares in Amil's controlling shareholder, a holding company, for R$7.917426 per share, based on a price of R$30.75 per Amil common share. Dr. Bueno and his partner, Dr. Dulce Pugliese, continue to own approximately 10% of Amil's outstanding common shares and have committed to retain such shares for at least five years from the date of the closing, or October 26, 2017, subject to certain exceptions. Dr. Bueno has the right to put the shares to the Company and the Company has the

54


Table of Contents

right to call the Amil shares upon expiration of the five year term, unless accelerated upon certain events, at a fair market value to be determined by appraisal firms selected by the Company and Dr. Bueno. Dr. Bueno and Dr. Pugliese have agreed to indemnify the Company against certain losses in connection with the acquisition and have pledged their 10% stake in Amil as security for this indemnification. The Company is advancing a tender offer to purchase approximately 25% of Amil's outstanding common shares from public shareholders in the first half of 2013. Dr. Bueno invested approximately U.S.$470 million in the Company's common shares and will hold those shares for the same five-year term, subject to certain exceptions.

        Set forth below is information regarding certain business relationships between Amil and related persons, all of which existed prior to the closing of the acquisition of a majority interest in Amil by the Company in October 2012. The Audit Committee of the Board of Directors has ratified these relationships. Dollar amounts below have been converted into U.S. dollars based on an exchange rate of R$2.0467 to U.S.$1.00, the same exchange rate used for financial reporting purposes.

        Diagnosticos da America S.A. ("DASA"). Dr. Bueno owns approximately 12% of DASA, the largest provider of laboratory tests and medical diagnostic services in Latin America. DASA is a publicly traded company in Brazil. DASA provides vaccinations, diagnostic services and laboratory and pathology tests to many customers in Brazil, including Amil plan members. Services outside of São Paulo, Brazil are provided pursuant to a contract with a term ending in 2013 (which is automatically renewed for successive 36-month terms). Services in São Paulo are provided pursuant to a contract with a term ending in 2026 (which is renewable for successive 15-year terms). Amil generally receives a discount on services provided to its members ranging from 2% to 12.5%, depending on volume. Amil has granted DASA the exclusive right to provide laboratory and pathology testing services at approximately 64 locations in São Paulo during the term of the contract and receives a discount on services ranging from 4% to 15%, depending on volume. From January 1, 2012 to December 31, 2012, Amil paid DASA approximately $52.1 million, which reflects discounts over market rates in part due to exclusivity arrangements. Amounts paid in the future will depend on volume. The Company believes that the contract terms are equal to or better than what could be obtained from unaffiliated third parties.

        Hospital Investments. Dr. Bueno owns a 51% interest in six hospitals and a 42% interest in one hospital that provide services in Brazil to Amil plan members. Services to Amil plan members represent approximately 27% of the aggregate revenue of these hospitals during the period from January 1, 2012 through December 31, 2012. The services are provided pursuant to contracts between Amil and each individual hospital. The contracts will expire in 2022. From January 1, 2012 to December 31, 2012, Amil paid these hospitals approximately $1.4 million for services to Amil plan members and the real estate lease payments described below. The Company believes that the contract terms are equal to what could be obtained from unaffiliated third parties and are comparable to, or lower than, rates that are charged to other Brazilian health plans. Amil also has a right of first offer and a right of first refusal to purchase interests in these hospitals should Dr. Bueno or his affiliates determine to transfer their interests to third parties within ten years from the date of the closing, or October 26, 2022.

        Hospital de Clínicas de Niteroi Ltda. ("HCN"). HCN, one of the hospitals in which Dr. Bueno owns a 51% interest, is also a property leasing company. HCN leases 11 medical facilities and office space to Amil. All of the leases run through October 2022. The aggregate rent for Amil's use of the properties was approximately $9.3 million for 2012. The lease terms are subject to annual adjustment based on the variation of a general Brazilian price index. The Company believes that the contract terms are equal to what could be obtained from unaffiliated third parties. Amil has a right of first offer and a right of first refusal should Dr. Bueno or his affiliates determine to transfer any of the properties to third parties within ten years from the date of the closing, or October 26, 2022.

        Aeromil Táxi Aéreo Limitada ("Aeromil"). In connection with the Company's acquisition of the Amil common shares, Amil sold 80% of Aeromil, an air taxi business, to Dr. Bueno to comply with Brazilian restrictions on foreign ownership of such businesses. Dr. Bueno's son-in-law is the CEO of Aeromil. Aeromil will provide on-demand emergency medical transport services to Amil through October 2014, with automatic renewal for succeeding two-year terms. The cost to Amil for such services is based on the operating costs (including utilization and maintenance) of the relevant aircraft. From January 1, 2012 to December 31, 2012, Amil paid Aeromil

55


Table of Contents

approximately $15.4 million for emergency medical transport services. Based on prior usage of such services when Aeromil was wholly owned by Amil, Amil expects payments for such services to range between $17 million and $20 million for 2013. Amil is entitled to receive dividends equaling 99.9% of the profits of Aeromil and has an irrevocable option to purchase all of Dr. Bueno's shares in Aeromil at a price of approximately $14.5 million, the price paid by Dr. Bueno for his stake in Aeromil. Amil's call option has an indefinite term so long as each party holds stock in Aeromil. Dr. Bueno is restricted from selling his shares in Aeromil except pursuant to Amil's call option.

        Employment of Solange Novelli Medina. Ms. Medina, who shares a household with Dr. Bueno, serves as Amil's head of design. In 2012, she received approximately $323,500 in salary and profit sharing payments from Amil. She also received benefits under Amil's benefit plans that are generally available to Amil employees.

Transactions with BlackRock, Inc.

        BlackRock Inc. beneficially owns approximately 6.32% of our common stock. The Company paid BlackRock approximately $3.2 million for investment management fees in 2012. BlackRock maintains a self-funded health insurance plan through the Company and paid the Company approximately $815,000 in administrative services in 2012.


COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

        During fiscal 2012, Messrs. Ballard, Darretta, Lawson and Leatherdale served on the Compensation Committee. None of these persons has ever been an officer or employee of the Company or any of our subsidiaries and has no interlocking relationships requiring disclosure under applicable SEC rules.


AUDIT COMMITTEE REPORT

        The Audit Committee of our Board of Directors is comprised of three non-employee directors, all of whom are audit committee financial experts, as defined by the SEC. The Board of Directors has determined that all of the members of the Audit Committee are independent within the meaning of the listing standards of the NYSE, the rules of the SEC and the Company's Standards for Director Independence. The Audit Committee operates under a written charter adopted by the Board of Directors which you may access in the corporate governance section of our website at www.unitedhealthgroup.com/about/UNH-Audit-Committee-Charter.pdf.

        Management has primary responsibility for the Company's consolidated financial statements and the overall reporting process, for maintaining adequate internal control over financial reporting and, with the assistance of the Company's internal auditors, for assessing the effectiveness of the Company's internal control over financial reporting.

        The Audit Committee has responsibility for the selection and evaluation of the independent registered public accounting firm, and such firm reports directly to the Audit Committee. It is not the duty of the Audit Committee to plan or conduct audits. The Company's independent registered public accounting firm, Deloitte & Touche LLP, is responsible for performing an independent audit of the Company's consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States), expressing an opinion as to the conformity of the consolidated financial statements with generally accepted accounting principles in the United States of America, and auditing management's assessment of the effectiveness of internal control over financial reporting. The Audit Committee's responsibility is to monitor and oversee these processes. The Audit Committee discussed with the Company's internal auditors and independent registered public accounting firm the overall scope and plans for their respective audits. The Audit Committee has discussed and reviewed, with both management and Deloitte & Touche LLP, management's annual report on the Company's internal control over financial reporting and Deloitte & Touche LLP's attestation. The Audit Committee also discussed with management and Deloitte & Touche LLP the process used to support certifications by the Company's CEO and CFO that are required by the SEC and the Sarbanes-Oxley Act of 2002 to accompany the Company's periodic filings with the SEC and the process used to support management's annual report on the Company's internal controls over financial reporting.

56


Table of Contents

        Management represented to the Audit Committee that the Company's consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed with management and the independent registered public accounting firm in separate sessions the Company's consolidated financial statements for the years ended December 31, 2012, December 31, 2011 and December 31, 2010.

        The Audit Committee discussed with Deloitte & Touche LLP matters required to be discussed by Statement on Auditing Standards No. 61 (Communications with Audit Committees), Statement on Auditing Standards No. 90 (Audit Committee Communications) and Rule 2-07 of Regulation S-X. The Company's independent registered public accounting firm also provided to the Audit Committee the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm's communications with the Audit Committee concerning independence, and the Audit Committee discussed with the independent registered public accounting firm the accounting firm's independence. In considering the independence of the independent registered public accounting firm, the Audit Committee took into consideration whether the provision of non-audit services is compatible with maintaining the independence of the independent registered public accounting firm.

        Based upon the Audit Committee's review of the financial statements, independent discussions with management and Deloitte & Touche LLP, and the Audit Committee's review of the representation of management and the report of the independent registered public accounting firm to the Audit Committee, and subject to the limitations of the Audit Committee's role, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements for the years ended December 31, 2012, December 31, 2011 and December 31, 2010 be included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed with the SEC.

Members of the Audit Committee

Glenn M. Renwick, Chair
Robert J. Darretta
Michele J. Hooper


INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Disclosure of Fees Paid to Independent Registered Public Accounting Firm

        Aggregate fees billed to the Company for the fiscal years ended December 31, 2012 and 2011 represent fees billed by the Company's principal independent registered public accounting firm, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates, which includes Deloitte Consulting (collectively, "Deloitte & Touche"). The Audit Committee pre-approved the audit and non-audit services provided in the years ended December 31, 2012 and December 31, 2011 by Deloitte & Touche, as reflected in the table below.

 
  Year Ended
Fee Category
  2012
  2011

Audit Fees

  $17,350,000   $16,918,000

Audit-Related Fees(a)

  9,546,000   2,803,000
     

Total Audit and Audit-Related Fees

  $26,896,000   $19,721,000

Tax Fees(b)

  998,000   504,000

All Other Fees(c)

  175,000   673,000
     

Total

  $28,069,000   $20,898,000
 
(a)
Audit-Related Fees for 2012 and 2011 include benefit plan and other required audits, certain AICPA agreed-upon procedures, internal control assessments and due diligence services. For 2012, Audit-Related Fees also include fees related to the acquisition of Amil and the Optum audit.

(b)
Tax Fees include tax compliance, planning and support services. In 2012 and 2011 approximately 25% ($248,000) and 73% ($367,000), respectively, of Tax Fees were related to tax compliance (review and preparation of corporate and

57


Table of Contents

(c)
All Other Fees include consulting fees and, for 2011, fees relating to claim assessments and reviews by a particular state and fees relating to a new technology platform.


Audit Committee's Consideration of Independence of Independent Registered Public Accounting Firm

        The Audit Committee has reviewed the nature of non-audit services provided by Deloitte & Touche and has concluded that these services are compatible with maintaining the firm's ability to serve as our independent registered public accounting firm.


Audit and Non-Audit Services Approval Policy

        The Audit Committee has adopted a Policy for Approval of Independent Auditor Services (the "Policy") outlining the scope of services that Deloitte & Touche may provide to the Company. The Policy sets forth guidelines and procedures the Company must follow when retaining Deloitte & Touche to perform audit, audit-related, tax and other services. The Policy also specifies certain non-audit services that may not be performed by Deloitte & Touche under any circumstances. Pursuant to these guidelines, the Audit Committee approves fee thresholds annually for each of these categories, and services within these thresholds are deemed pre-approved. All fees reported above were approved pursuant to the Policy. The services provided by our independent registered public accounting firm and related fees are discussed with the Audit Committee and the Policy is evaluated and updated periodically by the Audit Committee.


PROPOSAL 3 — RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

        The Audit Committee has appointed Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2013. The Board of Directors has proposed that shareholders ratify this appointment at the Annual Meeting. If shareholders do not ratify the appointment of Deloitte & Touche LLP, the Audit Committee will reconsider the appointment but is not obligated to appoint another independent registered public accounting firm. The Audit Committee evaluates, at least every three years, whether to rotate our independent registered public accounting firm.

        Representatives of Deloitte & Touche LLP are expected to be present at the meeting, will have an opportunity to make a statement and will be available to respond to questions from shareholders.

        The Board of Directors recommends that you vote FOR ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2013. Proxies will be voted FOR ratification of this appointment unless you specify otherwise.


PROPOSAL 4 — SHAREHOLDER PROPOSAL

        We have been informed that Trillium Asset Management LLC, along with co-sponsors Marco Consulting Group Trust I, AFL-CIO Reserve Fund and the Missionary Oblates of Mary Immaculate, intend to introduce the proposal set forth below at the Annual Meeting. In accordance with SEC rules, the text of the proposal is printed verbatim from the submission. The Company will provide to shareholders the addresses and reported holdings of the Company's common stock for the proposal sponsors promptly upon receiving an oral or written request. The Board of Directors has recommended a vote against this proposal for the reasons set forth following the proposal.


Shareholder Proposal — Lobbying Disclosure Report

58


Table of Contents


Board of Directors' Recommendation

        The Board of Directors unanimously recommends a vote AGAINST the foregoing proposal for the following reasons:

        The Board of Directors has carefully considered this shareholder proposal and has concluded that the proposal is not in the best interests of the Company and our shareholders and is redundant to existing comprehensive state and federal public disclosure requirements.

        As a participant in the regulated health care industry, we have an obligation to our Company and shareholders to engage with policymakers on an ongoing basis. We have pursued and will continue to pursue efforts to help inform public policy decisions at both the state and federal levels that have the potential to improve

59


Table of Contents

and sustain the quality and delivery of health care and that affect our customers, employees, consumers, and the communities in which we operate. Our activities include advocacy efforts at the federal and state levels; thought leadership regarding health care modernization and other important issues impacting the Company and our customers; educational outreach and promotion; campaign contributions; and other related activities.

        This shareholder proposal reflects the opinions of the proponents related to three components of the Company's lobbying activities: transparency of the Company's positions on public policy and policies and procedures related thereto; advocacy efforts including membership in different groups; and lobbying costs. As detailed below, our positions are clear, our advocacy is well disclosed, and our expenditures — although far below material levels — are disclosed in conformity with all state and federal requirements.

        Lobbying activities are led by Government Affairs with participation throughout our businesses, and are subject to oversight by senior management and the Public Policy Committee of our Board of Directors. In addition to overseeing our advocacy efforts, the Public Policy Committee assists the Board of Directors in fulfilling its responsibilities relating to our public policy, health care reform and modernization activities, political contributions, government relations, community and charitable activities, third party activities (including trade associations and industry groups) and corporate social responsibility, and is responsible for overseeing the risks associated with these activities. The Public Policy Committee receives regular reports from our leadership on these matters; oversees our policies; and reviews the purposes and benefits of these activities at each meeting. The Committee provides reports of its activities to our Board of Directors at each in-person meeting. The Committee meets four times per year.

        Our advocacy and legislative priorities at the federal and state levels are set forth in our "Roadmap for Transforming America's Health Care System" and "Playbook for States Seeking to Modernize Their Health Care Systems," which contain detailed information about our positions on health care reform and other public policy issues and are available on our website. In addition, since 2009, the Company's United Center for Health Reform & Modernization has issued nine working papers that draw on our internal expertise and extensive external partnerships to develop and offer innovative, practical solutions for the most significant health care challenges facing our nation. This information is also publicly available on our website.

        In the 2012 CPA-Zicklin Index of Corporate Political Accountability and Disclosure, the Center for Political Accountability ranked us within the top 20% of the 200 companies it reviewed for political transparency and accountability, and gave us the second highest rating for managed care companies.

        We believe that it is in the best interests of our Company and our shareholders to belong to trade associations and industry and other groups, where we benefit from the general business, technical and industry standard-setting expertise these organizations provide. The Company has stated publicly that we do not agree with all positions taken by these groups. We make a Political Contributions report available on our website and, on an annual basis, we report the aggregate amount of dues paid to certain trade associations that are not deductible under Section 162(e) of the Internal Revenue Code.

        We comply fully with all state and federal laws concerning the disclosure of our lobbying expenses. These disclosures are publicly available and provide extensive detail regarding the Company's lobbying expenses and the nature of its lobbying activities. All proposed contributions go through a legal and business approval process designed to ensure compliance with applicable federal or state campaign finance and related laws, internal policies and, in the case of contributions from our PACs, the applicable PAC's bylaws. All contributions must reflect the Company's interests and not those of its individual officers or directors. No campaign contributions are given in anticipation of, in recognition of, or in return for an official act.

        Our expenses related to political and lobbying activities are not financially material. In 2012, our total expenses relating to political and lobbying activities, even using a broad definition of such, were significantly less than one tenth of one percent of our total operating costs. Therefore, we do not believe that additional line item disclosure of these immaterial amounts would be beneficial to our investors and believe that preparation of the additional disclosures requested by the proponents would impose unnecessary costs and administrative burdens on the Company. Accordingly, the Board does not believe that implementing the proposal is in the best interests of the Company or our shareholders.

60


Table of Contents

        Our shareholders were presented with a substantially similar proposal submitted by three of the same proponents at our 2012 annual meeting. Minnesota corporate law dictates how votes at our annual meetings are tallied. In accordance with Minnesota law, the lobbying proposal submitted at our 2012 annual meeting did not pass, having only received 23% of the votes. In the shareholder supporting statement for this Annual Meeting, the proponents provide no new compelling arguments in support of the proposal.

        For these reasons, the Board of Directors recommends that you vote AGAINST this proposal. Proxies will be voted AGAINST this proposal unless you specify otherwise.


QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING

1.     What is the purpose of the Annual Meeting?

        At the Annual Meeting, shareholders will act upon the matters outlined in the Notice of Annual Meeting of Shareholders. These include the election of directors, an advisory vote to approve our executive compensation, ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm and, if properly presented at the meeting, a shareholder proposal. Also, once the business of the Annual Meeting is concluded, management of the Company will give a business update. Management, Chairs of each standing Board committee and representatives of Deloitte & Touche LLP will be available to respond to questions from shareholders.

2.     What is a proxy statement?

        The Company's Board of Directors is soliciting proxies for use at the 2013 Annual Meeting of Shareholders. A proxy statement is a document we give you when we are soliciting your vote pursuant to SEC regulations.

3.     What is a proxy?

        It is your legal designation of another person to vote the stock you own in the manner you direct. That other person is called a proxy. If you designate someone as your proxy in a written document, that document also is called a proxy or a proxy card. We have designated Marianne D. Short and Dannette L. Smith to serve as proxies for the Annual Meeting. The Board of Directors will use the proxies at the 2013 Annual Meeting of Shareholders. The proxies also may be voted at any adjournments or postponements of the meeting.

4.     What is the difference between a shareholder of record and a shareholder who holds stock in street name?

        Shareholders of Record.    If your shares are registered in your name with our transfer agent, Wells Fargo Shareowner Services, you are a shareholder of record with respect to those shares and the Notice of Internet Availability of Proxy Materials ("Notice") or the proxy materials were sent directly to you by Broadridge Financial Solutions.

        Street Name Holders.    If you hold your shares in an account at a bank or broker, then you are the beneficial owner of shares held in "street name." The Notice or proxy materials were forwarded to you by your bank or broker, who is considered the shareholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your bank or broker on how to vote the shares held in your account.

5.     How many shares must be present to hold the Annual Meeting?

        In order to conduct the Annual Meeting, holders of a majority of the shares entitled to vote as of the close of business on the record date must be present in person or by proxy. This constitutes a quorum. Your shares are counted as present if you attend the Annual Meeting and vote in person, if you vote your proxy over the internet or by telephone, or by mail. Abstentions and broker non-votes will be counted as present for purposes of establishing a quorum. If a quorum is not present, we will adjourn the Annual Meeting until a quorum is obtained.

61


Table of Contents

6.     How can I access the proxy materials for the Annual Meeting?

        Shareholders may access the proxy materials, which include the Notice of Annual Meeting of Shareholders, Proxy Statement (including a form of proxy card) and Annual Report for the year ended December 31, 2012 on the internet at www.unitedhealthgroup.com/proxymaterials. We will also provide a hard copy of any of these documents free of charge upon request to: UnitedHealth Group Incorporated, 9900 Bren Road East, Minnetonka, Minnesota 55343, Attention: Secretary to the Board of Directors.

        Instead of receiving future copies of our proxy materials by mail, you can elect to receive an e-mail that will provide electronic links to these documents. Opting to receive your proxy materials online will save the cost of producing and mailing documents to your home or business, will give you an electronic link to the proxy voting site and will also help preserve environmental resources.

        Shareholders of Record.    If you vote on the internet at www.proxyvote.com, simply follow the prompts for enrolling in the electronic proxy delivery service. You also may enroll in the electronic proxy delivery service at any time by going directly to www.unitedhealthgroup.com and following the enrollment instructions.

        Street Name Holders.    If you hold your shares in a bank or brokerage account, you may also have the opportunity to receive the proxy materials electronically. Please check the information provided in the proxy materials you receive from your bank or broker regarding the availability of this service.

7.     How do I attend the Annual Meeting? What do I need to bring?

        To attend the Annual Meeting, you will need to bring an admission ticket and valid photo identification.

        Shareholders of Record.    If you are a shareholder of record and received a Notice, the Notice is your admission ticket. If you are a shareholder of record and received proxy materials by mail, your admission ticket is attached to your proxy card. You will need to bring the Notice or the admission ticket and valid photo identification with you to the Annual Meeting in order to be admitted to the meeting.

        Street Name Holders.    If you hold your shares in street name, bring your most recent brokerage statement or a letter from your broker or other nominee and valid photo identification with you to the Annual Meeting. We will use that statement or letter to verify your ownership of common stock and admit you to the Annual Meeting; however, you will not be able to vote your shares at the Annual Meeting without a legal proxy, as described in Question 8.

        Please note that use of cameras, phones or other similar electronic devices and the bringing of large bags, packages or sound or video recording equipment will not be permitted in the meeting room. Attendees will also be required to comply with rules of order and procedure that will be available at the meeting.

8.     How can I vote at the Annual Meeting if I own shares in street name?

        If you are a street name holder, you may not vote your shares at the Annual Meeting unless you obtain a legal proxy from your bank or broker. A legal proxy is a bank's or broker's authorization for you to vote the shares it holds in its name on your behalf. To obtain a legal proxy, please contact your bank or broker for further information.

9.     What shares are included on the Notice, proxy card or voting instruction form?

        If you are a shareholder of record, you will receive only one Notice or proxy card for all the shares of common stock you hold:

62


Table of Contents

        If you hold your shares in street name, you will receive one Notice or voting instruction form for each account you have with a bank or broker. If you hold shares in multiple accounts, you may need to provide voting instructions for each account.

        If you hold shares in our 401(k) savings plan and do not vote your shares or specify your voting instructions on your proxy card, the administrators of the 401(k) savings plan will vote your 401(k) plan shares in the same proportion as the shares for which they have received voting instructions. To allow sufficient time for voting by the 401(k) administrators, your voting instructions must be received by 11:59 p.m. Eastern Time on May 29, 2013.

10.  How can I listen to the live webcast of the Annual Meeting?

        You can listen to the live webcast of the Annual Meeting by logging on to our website at www.unitedhealthgroup.com and clicking on "Investors" and then on the link to the webcast. An archived copy of the webcast will also be available on our website for fourteen days following the Annual Meeting.

11.  What different methods can I use to vote?

        By Written Proxy.    All shareholders of record who received proxy materials by mail can vote by written proxy card. If you received a Notice or the proxy materials electronically, you may request a proxy card at any time by following the instructions on the Notice or on the voting website. If you are a street name holder, you will receive instructions on how you may vote from your bank or broker, unless you previously enrolled in electronic delivery.

        By Telephone or Internet.    All shareholders of record can vote by telephone from the U.S. and Canada, using the toll-free telephone number on the proxy card, or through the internet using the procedures and instructions described on the Notice or proxy card. Street name holders may vote by internet or telephone if their bank or broker makes those methods available, in which case the bank or broker will enclose the instructions with the proxy materials. The internet and telephone voting procedures are designed to authenticate shareholders' identities, allow shareholders to vote their shares and to confirm that their instructions have been properly recorded.

        In Person.    All shareholders of record may vote in person at the Annual Meeting. Street name holders may vote in person at the Annual Meeting if they have a legal proxy, as described in Question 8.

        The Notice is not a proxy card and it cannot be used to vote your shares.

12.  What is the record date and what does it mean?

        The record date for the Annual Meeting is April 5, 2013. Only owners of record of shares of common stock of the Company at the close of business on the record date are entitled to notice of and to vote at the Annual Meeting, or at any adjournments or postponements of the Annual Meeting. On April 5, 2013, there were 1,020,498,723 shares of common stock issued, outstanding and entitled to vote. Each owner of record on the record date is entitled to one vote for each share of common stock held.

        The record date was established by our Board of Directors as required by the Minnesota Business Corporation Act. Owners of record of common stock at the close of business on the record date are entitled to:

13.  If I submit a proxy, may I later revoke it and/or change my vote?

        Shareholders of record may revoke a proxy and/or change their vote prior to the completion of voting at the Annual Meeting by:

63


Table of Contents

        Street name holders may revoke a proxy and/or change their vote prior to the completion of voting at the Annual Meeting by: