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UnitedHealth shareholders reject investor proposals but accept company reforms

MINNEAPOLIS – Shareholders of UnitedHealth Group Inc. on Tuesday rejected all proposals put forth by investor groups but approved company proposals designed to make the insurer more accountable to its stockholders.

One rejected proposal sought an advisory vote for shareholders on executive compensation. Another, from the California public pension system, would have allowed shareholders who own more than 3 percent of UnitedHealth shares to put director candidates on company-issued ballots.

Instead, shareholders approved proposals offered by the company in response to shareholder anger over a stock options scandal. UnitedHealth has acknowledged that some stock options granted to executives were probably backdated to dates when its stock price was more favorable for the recipient. The biggest recipient – then-chairman and CEO William McGuire – was forced out last year over the scandal.

Under the adopted proposals, UnitedHealth will switch to annual elections for directors, beginning in 2008. Those directors must win a majority of votes in uncontested elections, rather than the plurality vote required in the past.

Shareholders also approved addition of one of five new independent directors, Robert J. Darretta, and proposals to eliminate supermajority provisions for the removal of directors and other business combinations.

“Everyone at UnitedHealth Group is gratified by the strong shareholder support for the Company and the solid progress we have achieved in the past year in corporate governance,” board Chairman Richard Burke told shareholders.