United Healthcare 2006 Annual Report Download - page 113

• The Board of Directors took the following actions related to the Company’s policy governing the granting of
equity awards:
• Required that all grants of equity awards to employees are to be made at the sole discretion of the
Compensation Committee and no authority to grant equity awards is delegated to management.
• Required that all grants of equity awards in connection with commencement of employment or the
promotion or retention of existing employees are to be made at regularly scheduled quarterly meetings of
the Compensation Committee.
• Provides that all broad-based grants of equity awards to employees are only to be considered by the
Compensation Committee on an annual basis at the meeting of the Compensation Committee held in
connection with the Company’s Annual Meeting of Shareholders.
• Amended the Compensation Committee charter to remove the delegation of authority to the Chair of the
Compensation Committee to grant equity awards to executive officers of the Company.
• Amended the Compensation Committee charter to clarify the responsibilities of the Compensation
Committee to oversee and administer the Company’s equity incentive compensation plans.
• The Company recommended, and the Compensation Committee approved, a policy regarding equity awards
that:
• Documents the actions taken by the Board of Directors referred to above.
• Permits that, in the event that the Compensation Committee determines not to make equity awards on the
dates set forth above because the Company is in possession of material nonpublic information on that
date, then the Compensation Committee may grant such equity awards on a later date, which need not be
a regularly scheduled Committee meeting, when the Company is no longer in possession of material
nonpublic information.
• Requires that the date of grant of an equity award shall only be the date on which the Compensation
Committee acts to authorize the equity award.
• Addresses equity award approval requirements, award levels, award date requirements, awards to
individuals with significant stock ownership, modifications to existing awards, and review of and
amendments to equity award policies.
• The Company took the following actions to strengthen its internal control processes relating to equity awards:
• Engaged an outside professional services firm to review and advise the Company on improving the design
of the control environment around the Company’s equity award initiation and modification, equity award
approval, equity award administration and equity exercise administration processes.
• Evaluated and enhanced the design and documentation of the end-to-end process for equity
compensation, including grant initiation, grant approval, grant administration, exercise administration and
grant modification.
• Evaluated, strengthened and implemented processes and controls throughout the end-to-end process,
including controls to ensure cross-functional communication, controls around the oversight and approval
for all equity grant activity and controls around the preparation and review of stock-based compensation
information in the Company’s financial reports.
• Established an Equity Award Working and Oversight Group, comprised of senior tax, legal, human
capital and accounting/finance personnel, to review all recommended equity awards to employees prior to
consideration by the Compensation Committee and, following each Compensation Committee action, to
review the equity awards granted by the Compensation Committee.
• Enhanced training and education to ensure that all relevant personnel involved in the administration of
stock option grants understand the terms of the Company’s stock option plans and the relevant accounting
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