MINNEAPOLIS -- UnitedHealth Group Inc. will lose the chief executive that built it into a health insurance powerhouse, but Wall Street yawned about it yesterday.
UnitedHealth shares traded in a narrow range and analysts said they had expected the departure of chairman and chief executive William McGuire because of apparent stock options backdating. With McGuire gone from the boardroom immediately, and set to retire as chief by Dec. 1, the board promoted president Stephen Hemsley to chief executive.
UnitedHealth shares slipped $1.21, or about 2.5 percent, to close at $47.54 on the New York Stock Exchange. They're down from a high of $64.61 in December, with much of that loss since questions about the company's stock options timing arose in March.
By making Hemsley chief executive, UnitedHealth's directors signaled they would keep the company headed in the same direction, which has boosted UnitedHealth's stock price exponentially over the past 15 years and transformed it into the nation's second-largest health insurer. Hemsley has been at the company since 1997 and has run the company's day-to-day operations since 1999.
UnitedHealth said on Sunday that McGuire would step down after a company-commissioned report found widespread, systematic backdating was probably the explanation for his extraordinary good fortune in receiving stock options priced at the lowest possible point in eight different quarters.
Nothing in the report suggests that Hemsley was involved in any backdating, although the report concludes that he received stock options that were ``likely backdated."