UnitedHealth Group (UNH) will pay retiring Chief Executive David Wichmann two years’ salary and bonus following his retirement last week.
Shares of the Minnetonka, Minn., health-services giant at last check were up 1.6% at $329.38.
The company said in a regulatory filing that Wichmann, who had been CEO since 2017, is leaving "after playing an instrumental role leading, building and unifying UnitedHealth Group over its most pivotal two-plus decades of growth and diversification."
The company said that as a result of his "lengthy and successful tenure with the company, he has met the definition of retirement set forth in his previously granted equity awards."
Wichmann's base salary was $1.4 million in 2019, and he received cash bonus compensation of $4.5 million, according to the company’s most recent proxy filing.
According to the employment agreement, severance is payable if the executive “is terminated by UnitedHealth Group without cause or if executive terminates employment for good reason,” Bloomberg reported. The agreement doesn’t call for payment upon retirement.
"These payments represent what Mr. Wichmann is entitled and obligated to under his contract, 23 years of service, and appreciation for his leadership,” the company said in a statement to Bloomberg.
Wichmann is staying on through the end of March to help with the transition.
UnitedHealth said that Wichmann decided to retire after the pandemic reaffirmed the importance of family for him.
Last week the company named its president, Sir Andrew Witty, to succeed Wichmann as CEO.
Witty is a former CEO of GlaxoSmithKline (GSK) . He joined UnitedHealth in 2018. He became president of UnitedHeath's Optum that year.
He will have a base salary of $1.5 million annually, a target bonus of up to twice that amount, as well as equity awards worth millions more.