Former UnitedHealth CEO William McGuire has agreed to pay $30 million to settle a class-action lawsuit that accused him of cheating shareholders in a stock-option backdating arrangement while he led the company.
The California Public Employees’ Retirement System (CalPERS) said it believes the settlement is the largest cash recovery ever obtained from an individual in a securities class-action lawsuit. McGuire also agreed to give back 3.675 million shares of stock options he received between 2003 and 2005.
“I am pleased to be able to help bring the stock option dating issues closer to complete resolution,” McGuire said in a statement this morning.
McGuire’s deal follows a separate settlement reached between CalPERS and UnitedHealth Group, which agreed to pay $895 million into a fund for the plaintiffs. McGuire also previously settled with UnitedHealth and the Securities and Exchange Commission. All of the settlements remain subject to court approval.
“We are glad to have this chapter of stock-option backdating abuse behind us and to achieve comprehensive relief for the company’s shareholders,” CalPERS President Rob Feckner said in a statement. “We hope this sends a strong message to other corporations that continue to look after their own best interests rather than the shareholders.”
The agreement notes that McGuire continues to deny the allegations against him in the class-action complaint.