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TheStreet Open House

The Five Dumbest Things on Wall Street This Week

UnitedHealthy and Wealthy
A billion in options here...

2. Loose Change

UnitedHealth (UNH) is getting sick and tired of all this executive pay chatter.

The Minnesota-based health insurer and some other big companies have been under the gun for possibly giving execs sweetheart deals on stock options. The Wall Street Journal reports that top UnitedHealth execs repeatedly got options priced at or near the bottom of their stock's trading range, making the options more valuable and raising accounting and disclosure questions.

The Securities and Exchange Commission has contacted UnitedHealth about options pricing. This week saw a management shake-up at another possible options backdater, Vitesse (VTSS).

UnitedHealth says its board is investigating options grant practices and that it believes it acted appropriately. That doesn't mean the company is happy about the attention, though.

"It is extraordinarily difficult and frustrating not to respond to media reports," CEO William McGuire said on UnitedHealth's earnings conference call, The Wall Street Journal reports.

Making things stickier for UnitedHealth is the sheer size of McGuire's haul. UnitedHealth has been a strong performer, quadrupling its bottom line since 2001 and tripling its stock price over three years. But the Journal's report that McGuire is sitting on $1.6 billion worth of stock options had some observers questioning the board's independence.

So McGuire fired back this week by suggesting that the company will suspend options grants to well-off top execs. "It was my recommendation that we consider terminating or slowing down or stopping at least for the foreseeable future stock options for the most senior employees," he told CNBC.

That sounds like a good idea. And as for his personal fortune? "I've never made it a practice of looking for money," McGuire said Tuesday.

Having $1.6 billion in options sitting around makes that less of a priority.

Dumb-o-Meter score: 90. Now McGuire & Co. can look forward to defending a shareholder civil suit on the options grants, too.

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