UnitedHealth’s Exiting CEO to Get Salary, Bonus for 2 Years
(Bloomberg) -- UnitedHealth Group Inc. will pay departing Chief Executive Officer Dave Wichmann about what he would be entitled to as severance -- two years’ salary and bonus -- after his unexpected retirement last week, the company disclosed in a securities filing.
Former pharmaceutical executive Andrew Witty, who had been leading the company’s Optum health-services division, was tapped to succeed Wichmann as CEO last week. The change was effective immediately. Wichmann had been chief for less than four years, and the company had made no signal that a leadership change was coming.
Wichmann’s exit package is roughly equivalent to the severance benefits specified in his employment agreement of two times base salary and bonus compensation. His base salary was $1.4 million in 2019, and he received cash bonus compensation of $4.5 million according to the company’s most recent proxy filing.
According to the employment agreement, severance is payable if the executive “is terminated by UnitedHealth Group without cause or if executive terminates employment for good reason.” The agreement doesn’t call for payment upon retirement.
UnitedHealth said last week that Wichmann decided to retire after the pandemic reaffirmed the importance of family for him. Wichmann retired on Feb. 2, according to the filing, two days before it was announced publicly.
“These payments represent what Mr. Wichmann is entitled and obligated to under his contract, 23 years of service, and appreciation for his leadership,” the company said in a statement provided by a spokesman.
Wichmann is staying on through the end of March to help with the transition. His equity awards will continue to vest, the company said in the filing, citing his “lengthy and successful tenure with the company,” which he joined in 1998.
Witty, the new CEO, was previously head of British drugmaker GlaxoSmithKline Plc for almost a decade. He joined UnitedHealth’s board in 2018 after leaving GSK. The next year he left the board to take an executive role running Optum.
Witty will have a base salary of $1.5 million annually, a target bonus of up to twice that amount, as well as equity awards worth millions more.
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