Some top insiders at

UnitedHealth

(UNH) - Get Report

, a company known for inking the most health benefits policies in the country, could be suffering from writer's cramp for another reason.

The company's compensation committee has spent years signing off on some gigantic executive paychecks. Committee members have a track record of being generous on other boards as well. But at UnitedHealth, they've gone a step further by making senior executives there among the best-paid in the entire country.

During the past three years alone, UnitedHealth CEO William McGuire has raked in well over $100 million, counting his seven-figure salary and some incredibly profitable stock-option transactions. And the company just keeps giving. Last year, for example, UnitedHealth showered top brass with 1.3 million new options -- worth nearly $150 million if the stock climbs 10% annually -- in addition to their industry-leading salaries.

To be fair, UnitedHealth shareholders have profited during McGuire's reign as well. UnitedHealth supporters point out that the company's stock -- which set a record high of $56.25 this summer -- has "blown away" the performance of the broader

S&P 500

index. But the managed care industry as a whole has been riding an up cycle for a while. And some, including S&P, have predicted that the tide could soon change.

Regardless of what happens, big option grants make people like Brandon Rees -- a research analyst at labor giant AFL-CIO -- very nervous. Rees worries that stock options can push executives to take drastic, and sometimes improper, steps to inflate the price of their shares.

"Today, stock options account for two-thirds of the value of a CEO's compensation package," Rees said. "So obviously, they're going to be a driving element in his or her decision-making."

Sharing the Wealth

Of course, the compensation committee -- which awards those options -- stands to benefit as well.

In addition to $30,000 cash, all UnitedHealth directors pick up 10,000 stock options annually. Compensation committee members also collect an extra $6,000 for their service.

And all three members score nice perks for serving on other compensation committees as well. By far, Thomas Kean -- the former governor of New Jersey -- reaps the biggest rewards. Last year,

Kean earned nine times more sitting on corporate boards than he did working full time as a university president.

But UnitedHealth's other compensation committee members haven't done too shabbily, either. As chairman of the committee, fund manager William Spears picks up $5,000 more than others in the group. And his boardroom perks don't stop there.

Spears, a longtimer who joined UnitedHealth's board when McGuire was promoted to CEO in 1991, also earns decent pay as director of a much smaller company in which his firm ranks as a top institutional holder. At real estate company

Avatar

( AVTR) -- whose market capitalization is just $280 million compared to UnitedHealth's $31 billion -- Spears last year collected $17,500 for attending four board meetings and an added $5,000 for chairing the compensation committee. Although he apparently received no stock options, he personally owns more than 45,000 shares already.

Under Spears' leadership, the compensation committee last year awarded the CEO of Avatar -- whose stock price gained only 56 cents in 2002 -- $1 million in salary and bonuses. The committee also continued to give the CEO 8% of the cash flow from a real estate project and eliminated a former cap on his long-term pay from the company.

Spears chairs yet another compensation committee as well. At

Alcide

(ALCD)

-- a tiny chemical company with a market cap of just $35 million -- Spears last year earned $6,000 as a director, $5,000 for attending board meetings and another $1,000 for chairing the compensation committee's single session of the year.

Despite a poor year for Alcide's stock -- which fell nearly 40% -- the compensation committee elected to give the company's CEO a 5% raise to $273,266 and another $130,127 in incentive bonuses.

"The critical factor underlying this arrangement is the company's emphasis on tying a significant portion of the executives' total compensation to the company's financial performance and growth," Alcide's latest proxy states. "Bonus compensation as a percent of base salary was awarded for fiscal year 2002 performance after careful consideration by the committee of progress made during that year in achieving key financial milestones."

Despite the board's stated policy, Alcide awarded the CEO a bonus in a year when the company's profit growth tumbled and its stock -- once a $60 highflier -- briefly fell below the $10 mark for the first time in years.

Purse Strings

UnitedHealth's third compensation committee member -- an academic like Kean -- also picks up extra cash serving on multiple boards.

Dean of nursing at Columbia University, Mary Mundinger, chairs the compensation committee at

Cell Therapeutics

(CTIC) - Get Report

, a $400 million company that develops cancer treatments. Last year, Mundinger's committee voted to give the company's CEO roughly $750,000 -- putting him in the top quartile of his peer group -- and grant him more than 300,000 stock options despite the fact that the company has operated for more than a decade without ever turning a profit.

Mundinger herself collected 15,000 stock options when she joined the board in 1997 and continues to earn up to $15,000 cash and 5,000 stock options annually for her service as a director.

Mundinger earns even more as a director at

Gentiva Health Services

(GTIV)

, a $315 million home health company based in New York. Last year, Mundinger scored $25,000 in cash and stock and another 10,000 options to buy stock in the future.

By then, Gentiva's board already had made the company's former CEO a very rich man. In his final year at the helm, Edward Blechschmidt collected $9.47 million -- making him Long Island's eighth most highly paid CEO in 2001, according to

Newsday

.

The company did scale back in 2002. Last year, the new CEO collected $775,000 -- nearly 40% of it in bonuses -- and 10,000 stock options.

"The committee concluded that the company either met or made significant progress towards achieving its goals and objectives under

the CEO's leadership and direction," the proxy explained.

Still, Gentiva's CEO picked up the rewards for a year in which the once-profitable company -- hit by a slew of special charges -- swung to a hefty full-year loss.

Mundinger wasn't the only UnitedHealth director presiding over Gentiva that year. Gail Wilenski, a veteran UnitedHealth director well-connected to the Bush family, also fills one of nine seats on the company's board. In addition, Wilenski acts as an adviser to the Robert Wood Johnson Foundation, where Kean serves as a director.

At least two other UnitedHealth directors cross paths in other boardrooms as well. James Johnson, the former CEO of

Fannie Mae

( FNM) and a current member of UnitedHealth's audit committee, helps govern

Gannett

(GCI) - Get Report

with help from university president and UnitedHealth compliance committee member Donna Shalala.

Paul Hodgson, senior research associate at the Corporate Library, believes American boardrooms could use some fresh blood.

"Right now, there's a fairly limited circle of candidates," he said. "It shouldn't just be executive officers, lawyers, academics ... and politicians," he said. "There should be a much wider circle of candidates being used."

Nursing Growth

To be fair, Mundinger has made a bigger name for herself outside of corporate boardrooms.

She is perhaps best known for a high-profile academic study showing that nurse practitioners can provide the same kind of care normally administered by physicians. Although doctors in particular have doubted her claims, Mundinger has managed to convince those who really matter -- some of the biggest spenders on health care -- that she is right.

By 1998, some two years before actually publishing her study in the

Journal of the American Medical Association

, Mundinger had convinced several major insurance companies to not only pay for nurses providing physician care but also to do so without cutting their reimbursement rates. The American College of Physicians listed United, where Mundinger had joined the board a year earlier, among the insurance companies participating in the groundbreaking deal.

By now, of course, UnitedHealth's business strategies have won tremendous praise from fans and foes alike. The company currently ranks as the largest -- and arguably most successful -- managed-care company in the nation. And UnitedHealth shareholders have benefited accordingly.

Still, some people stop well short of saying McGuire deserves so much pay for that success. Indeed, Rees points to the recent ouster of

New York Stock Exchange

Chairman Richard Grasso -- whose $140 million paycheck dwarfs even McGuire's compensation -- as a sign of growing intolerance for jumbo executive prizes.

"This is the first time a CEO has been removed solely because of his compensation," Rees said. "No one was criticizing his performance. This is a real wake-up call."