DEF 14A 1 a2235292zdef14a.htm DEF 14A

Use these links to rapidly review the document
TABLE OF CONTENTS

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.            )

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

o


Preliminary Proxy Statement

o


Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý


Definitive Proxy Statement

o


Definitive Additional Materials

o


Soliciting Material under §240.14a-12

 

UnitedHealth Group Incorporated

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

ý


No fee required.

o


Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 


(1)


Title of each class of securities to which transaction applies:
        
  (2) Aggregate number of securities to which transaction applies:
        
  (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        
  (4) Proposed maximum aggregate value of transaction:
        
  (5) Total fee paid:
        

o


Fee paid previously with preliminary materials.

o


Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 


(1)


Amount Previously Paid:
        
  (2) Form, Schedule or Registration Statement No.:
        
  (3) Filing Party:
        
  (4) Date Filed:
        

 


Table of Contents

LOGO

9900 Bren Road East, Minnetonka, Minnesota 55343

April 20, 2018

Dear Shareholder:

We cordially invite you to attend our 2018 Annual Meeting of Shareholders. We will hold our meeting on Monday, June 4, 2018, at 10:00 a.m. Central Time at 11 East Walton Street, Third Floor – Thoreau Room, Chicago, Illinois 60611.

As a shareholder of UnitedHealth Group, you play an important role in our company by considering and taking action on the matters set forth in the attached proxy statement. We appreciate the time and attention you invest in making thoughtful decisions.

Attached you will find a notice of meeting and proxy statement containing further information about the items upon which you will be asked to vote and the meeting itself, including:

    How to obtain admission to the meeting if you plan to attend; and

    Different methods you can use to vote your proxy, including by Internet, telephone and mail.

Every shareholder vote is important, and we encourage you to vote as promptly as possible. If you cannot attend the meeting in person, you may listen to the meeting via webcast. Instructions on how to access the live webcast are included in the proxy statement.

Sincerely,

SIGNATURE

David S. Wichmann
Chief Executive Officer

SIGNATURE

Stephen J. Hemsley
Executive Chairman of the Board


Table of Contents

LOGO

Notice of 2018 Annual Meeting of Shareholders

Date June 4, 2018

Time


10:00 a.m. Central Time

Location


Third Floor – Thoreau Room
11 East Walton Street
Chicago, Illinois 60611

Record Date


April 10, 2018. Only shareholders of record of the Company's common stock at the close of business on the record date are entitled to receive notice of, and to vote at, the Annual Meeting and any adjournments or postponements of the meeting.

Items of Business

To elect the eleven nominees set forth in the attached proxy statement to the Company's Board of Directors.

An advisory vote to approve the compensation paid to the Company's named executive officers as disclosed in the attached proxy statement (a "Say-on-Pay" vote).

To ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for the Company for the year ending December 31, 2018.

To transact other business that properly may come before the Annual Meeting or any adjournments or postponements of the meeting.


Admission to the Annual Meeting


To attend the Annual Meeting, you will need to bring an admission ticket and valid photo identification. You may attend the Annual Meeting by following the procedures described under Question 7 of the "Questions and Answers About the Annual Meeting and Voting" section in the attached proxy statement.

Proxy Voting


Important.
Even if you plan to attend the Annual Meeting, we still encourage you to submit your proxy by Internet, telephone or mail prior to the meeting. If you later choose to revoke your proxy or change your vote, you may do so by following the procedures described under Question 13 of the "Questions and Answers About the Annual Meeting and Voting" section in the attached proxy statement.

Webcast


You can listen to the live webcast of the Annual Meeting by logging on to our website at www.unitedhealthgroup.com and clicking on "Investors" and then on the link to the webcast. See Question 10 of the "Questions and Answers About the Annual Meeting and Voting" section in the attached proxy statement.

By Order of the Board of Directors,

SIGNATURE

Dannette L. Smith
Secretary to the Board of Directors

April 20, 2018

IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 4, 2018:

The Notice of Internet Availability of Proxy Materials, Notice of Annual Meeting of Shareholders, Proxy Statement and Annual Report are available at www.unitedhealthgroup.com/proxymaterials.


Table of Contents

Table of Contents

 
 
Page
Proxy Summary 1



Proposal 1 — Election Of Directors


6



Director Nomination Process


6



2018 Director Nominees


9
     
Director Compensation 14



Cash Compensation


14



Equity-Based Compensation


14



Stock Ownership and Retention Guidelines


15



Director Deferral Plan


15



Other Compensation


16
     
2017 Director Compensation Table 17



Overview


19



Principles of Governance


21



Code of Conduct: Our Principles of Ethics & Integrity


21
     
Compliance and Ethics 21



Director Independence


22



Board Leadership Structure


23



Risk Oversight


24



Board Meetings and Annual Meeting Attendance


25



Board Committees


25
     
Communication with the Board of Directors 28



Executive Summary


29



Compensation Discussion and Analysis


31



Compensation Committee Report


51



Compensation Committee Interlocks and Insider Participation


51
     
2017 Summary Compensation Table 52



2017 Grants of Plan-Based Awards


55



Outstanding Equity Awards at 2017 Fiscal Year-End


58



2017 Option Exercises and Stock Vested


59



2017 Pension Benefits


62



2017 Non-Qualified Deferred Compensation


63



Executive Employment Agreements


64



Potential Payments Upon Termination or Change in Control


69



CEO Pay Ratio


70




Proposal 2 — Advisory Approval of the Company's Executive Compensation


72

 


 


 
     



 


 

i


Table of Contents


 


 



Page



Audit Committee Report


73
     
Disclosure of Fees Paid to Independent Registered Public Accounting Firm 75



Audit Committee's Consideration of Independence of Independent Registered Public Accounting Firm


75



Audit and Non-Audit Services Approval Policy


75

Proposal 3 — Ratification of Independent Registered Public Accounting Firm 76
     
     
Questions and Answers About the Annual Meeting and Voting 77
     
Security Ownership of Certain Beneficial Owners and Management 84



Householding Notice


86



Other Matters at Meeting


86
  
   
     
Certain Relationships and Transactions 87
     
Section 16(a) Beneficial Ownership Reporting Compliance 89

 


 


 

 


 


 
     
   
Appendix A — Reconciliation of Non-GAAP Financial Measures 90

ii


Table of Contents


Proxy Summary

This summary highlights information contained elsewhere in this proxy statement. We encourage you to review the entire proxy statement. This proxy statement and our Annual Report for the year ended December 31, 2017 are first being mailed to the Company's shareholders and made available on the Internet at www.unitedhealthgroup.com/proxymaterials on or about April 20, 2018. Website addresses included throughout this proxy statement are for reference only. The information contained on our website is not incorporated by reference into this proxy statement.

Chief Executive Officer Succession

On August 15, 2017, the Board of Directors elected David S. Wichmann to succeed Stephen J. Hemsley as Chief Executive Officer ("CEO") and become a director of the Company, effective September 1, 2017. On September 1, 2017, Mr. Hemsley took the newly-created role of Executive Chairman of the Board of Directors, after serving more than ten years as CEO, and Richard T. Burke, formerly Chairman of the Board, became Lead Independent Director.

These changes were designed to ensure continuity as the Company continues to grow and evolve. They were the result of a four-year succession-planning process, during which the Board had the opportunity to observe and evaluate Mr. Wichmann in many different settings, including formal Board presentations, Board/management meetings, investor presentations and individual discussions with directors.

The Board determined that Mr. Wichmann had the right business and leadership skills, enterprise knowledge and support, broad health care experience and expertise in growth, innovation, technology, operations and global markets to be CEO and lead the Company into the future.

Business Results

We are a diversified health care company whose mission is to help people live healthier lives and to help make the health system work better for everyone. We again achieved strong business results in 2017, including:

    Revenues increased 9% to $201.2 billion from $184.8 billion in 2016;

    Operating earnings increased 18% year-over-year to $15.2 billion, net earnings to UnitedHealth Group common shareholders increased to over $10.5 billion and cash flows from operations grew to $13.6 billion;

    Adjusted earnings per share1 increased 25% to $10.07 per share from $8.05 per share in 2016;

    Driven by net earnings growth, including the deferred tax revaluation, return on equity increased to 24.4% in 2017;

    Total shareholder return, which is defined as the increase in stock price, together with dividends paid, was 40% in 2017, 125% over the 2015-2017 time period and 324% over the 2013-2017 time period;

    Our annual cash dividend rate increased to $3.00 per share, paid quarterly, representing a 20% increase over the annual cash dividend rate of $2.50 per share paid quarterly since the second quarter of 2016;

   


1
Adjusted earnings per share is a non-GAAP financial measure. Refer to Appendix A in this proxy statement for a reconciliation of adjusted earnings per share to the most directly comparable GAAP measure.

1


Table of Contents

    UnitedHealth Group was the top ranking company in the insurance and managed care sector on Fortune's 2018 "World's Most Admired Companies" list, based on 2017 results. This is the eighth consecutive year UnitedHealth Group has ranked No. 1 overall in the insurance and managed care sector;

    UnitedHealth Group was named to both the Dow Jones Sustainability World and North America Indices for the 19th consecutive year;

    UnitedHealth Group was included among the 2017 Best Employers for Diversity by Forbes; and

    Michele J. Hooper, a UnitedHealth Group director, was named 2017 Director of the Year by the National Association of Corporate Directors, and, in 2016, was included in Savoy magazine's Most Influential Black Corporate Directors, and Board of Directors member Dr. Gail R. Wilensky was included in the 2016 NACD Director 100 list of the most influential people in the boardroom.

Corporate Governance

UnitedHealth Group is committed to meeting high standards of ethical behavior, corporate governance and business conduct in everything we do, every day. This commitment has led us to implement many governance best practices, including the following:

    Board Structure and Composition — Our directors are elected annually by a majority vote of our shareholders. We have an Executive Chairman of our Board of Directors and an Independent Lead Director, and ten of our twelve directors are independent.

    Chief Executive Officer ("CEO") Succession Planning — Our succession plan, which is reviewed annually by our Board of Directors, addresses both an unexpected loss of our CEO and longer-term succession.

    Board Refreshment and Tenure — Since January 2017, we have appointed four new directors to the Board who are standing for election this year, three of whom are independent, advancing both the skill and experience profile of the Board as well as its diversity.

    Nominating Advisory Committee — Our Nominating Advisory Committee, comprised of long-term shareholders of the Company and a member of the medical community, provides our Nominating and Corporate Governance Committee (the "Nominating Committee") with additional input regarding desirable characteristics of director candidates and the composition of our Board.

    Proxy Access — A shareholder or group of shareholders who have owned at least 3% of our common stock for at least three years, and who comply with specified procedural and disclosure requirements, may include in our proxy materials shareholder-nominated director candidates representing up to 20% of the Board.

    Stock Ownership Guidelines — Each of our executive officers and directors were in compliance with our stock ownership guidelines as of April 10, 2018. Mr. Wichmann, our CEO, owned shares equal to 140 times his base salary as of April 10, 2018.

    Stock Retention Policy — We generally require executive officers to hold, for at least one year, one-third of the net shares acquired upon vesting or exercise of any equity award. Our directors are generally required to hold all equity awards granted until completion of service on the Board, or until they have met our stock ownership requirements.

    Clawback Policy — We have adopted a clawback policy that entitles the Board of Directors to seek reimbursement from our senior executives if they are involved in fraud or misconduct that causes a material restatement or in the event of a senior executive's violation of non-compete, non-solicit or confidentiality provisions.

2


Table of Contents

    Independent Compensation Consultant — Our Compensation and Human Resources Committee (the "Compensation Committee") uses an independent compensation consultant that performs no other consulting or services for the Company.

    Political Contributions Disclosure — We publicly disclose our political contributions and public advocacy efforts and the contributions of our federal and state political action committees.

    Environmental Policy — We seek to minimize our environmental impact and to heighten our employees' awareness of the importance of the environment.

    Short Selling and Hedging Transactions in Company Securities — Our insider trading policy prohibits all directors, executive officers and employees from engaging in short sales and hedging transactions relating to our common stock, and requires advance approval of the Compensation Committee of any pledging of common stock by directors, executive officers and other members of management.

    Absence of Rights Plan — We do not have a shareholder rights plan, commonly referred to as a "poison pill."

See the "Corporate Governance" portion of this proxy statement for further information on our governance practices.

Enterprise-Wide Risk Oversight

Our Board of Directors, assisted by its committees, oversees management's enterprise-wide risk management activities. Risk management activities include assessing and taking actions necessary to mitigate and manage risk incurred in connection with the long-term strategic direction and operation of our business.

Executive Compensation

Our executive compensation program uses a mix of base salary, annual and long-term cash incentives, equity awards and broad-based benefits to attract and retain highly qualified executives and maintain a strong relationship between executive pay and Company performance. Shareholders expressed strong support for our executive compensation program at our 2017 Annual Meeting of Shareholders, with more than 96% of the votes cast in favor of our Say-on-Pay proposal.

Our Overall Compensation Program Principles

    Pay-for-performance — A substantial portion of the total compensation of our executive officers is earned based on achievement of enterprise-wide goals that drive long-term performance, including growth and shareholder value.

    Enhance the value of the business — Incentive compensation is designed to grow and sustain the longer-term value of the Company and avoid excessive risk-taking.

    Reward long-term growth and focus management on sustained success and shareholder value creation — Compensation of our executive officers is weighted toward equity awards that encourage sustained performance and drive shareholder returns.

    Standard benefits and very limited perquisites — We provide standard employee benefits and very limited perquisites to our executive officers.

3


Table of Contents

Summary of Compensation Paid to David S. Wichmann, our CEO, in 2017

    Base salary — $1.16 million.

    Cash incentive awards — Annual cash incentive award of $4.25 million and long-term cash incentive award of $649,800, which reflect the Company's performance against pre-set goals and continued strong leadership by Mr. Wichmann.

    Equity awards — Performance shares with a target grant date fair value of $5.55 million, restricted stock units with a grant date fair value of $2.775 million and stock options with a grant date fair value of $2.775 million.

    Company matching contributions — $159,519 under our 401(k) and executive savings plan.

Information regarding compensation paid to each of our named executive officers in 2017 is described in the "Compensation Discussion and Analysis" section.

Strong Governance Standards in Oversight of Executive Compensation Policies

We maintain strong governance standards in the oversight of our executive compensation policies and practices, including:

    No excise tax gross ups.

    Performance based compensation arrangements, including performance based equity awards, that use a variety of performance measures, with different measures used for annual and long term plans.

    Double trigger change in control arrangements for equity grants.

    Our 2011 Stock Incentive Plan prohibits the repricing of stock options and stock appreciation rights without shareholder approval.

    Annual advisory shareholder votes to approve the Company's executive compensation.

    Stock ownership guidelines requiring executive officers to beneficially own specified amounts of the Company's common stock within five years of their appointment as an executive officer.

    A stock retention policy generally requiring executive officers to hold, for at least one year, one third of the net shares acquired upon vesting or exercise of any equity award.

    A clawback policy entitling the Board of Directors to seek reimbursement from senior executives if they are involved in fraud or misconduct that causes a material restatement or in the event of a senior executive's violation of non-compete, non-solicit or confidentiality provisions.

4


Table of Contents

Voting Matters and Vote Recommendations

Proposal
Board Recommendation
Reasons for Recommendation
More Information
1 Election of eleven directors FOR The Board and Nominating Committee believe the eleven Board candidates possess the experience, skills, attributes and diversity to effectively monitor performance, provide oversight and advise management on the Company's strategy. Page 6
GRAPHIC
         
2 Advisory Approval of the Company's Executive Compensation (a "Say-on-Pay" vote) FOR Our executive compensation program is designed to attract and retain highly qualified executives and to maintain a strong link between pay and the achievement of enterprise-wide goals. We emphasize and reward teamwork and collaboration among executive officers, which we believe fosters Company growth and performance, optimizes the use of enterprise-wide capabilities, drives efficiencies and integrates products and services for the benefit of our customers and other stakeholders. Page 72
GRAPHIC
         
3 Ratification of Independent Registered Public Accounting Firm FOR Based on the Audit Committee's assessment of Deloitte & Touche's qualifications and performance, it believes their retention for fiscal year 2018 is in the best interests of the Company. Page 76
GRAPHIC
         

5


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

BOARD OF DIRECTORS

Proposal 1 — Election of Directors

Director Nomination Process

Criteria for Nomination to the Board

The Nominating Committee analyzes, on an annual basis, director skills and attributes, and recommends to the Board of Directors appropriate individuals for nomination as Board members.

The Nominating Committee developed and maintains a skills matrix to assist it in considering the appropriate balance of experience, skills and attributes required of a director and to be represented on the Board as a whole. We believe that an effective board consists of a diverse group of individuals who bring a variety of complementary skills and a range of tenures. The skills matrix is consistent with the Company's long-term strategic plan and is regularly reviewed and updated by the Nominating Committee. The key features of the skills matrix are also discussed with members of our Nominating Advisory Committee and their feedback is considered by the Nominating Committee when it updates the skills matrix. The Nominating Committee uses the skills matrix in the broader context of the Board's overall composition, with a view toward constituting a board that has the best skill set and experience to oversee the Company's business and to ensure that the Board has the appropriate mix of skills needed for the broad set of challenges that it confronts. The Nominating Committee evaluates Board candidates against the skills matrix when determining whether to recommend candidates for initial election to the Board and when determining whether to recommend currently serving directors for reelection to the Board.

The skills matrix has two sections — a list of core criteria every member of the Board should meet and a list of skills and attributes to be represented collectively on the Board. The following are core director criteria that should be satisfied by each director or nominee:

    Independence under the Company's Standards for Director Independence and New York Stock Exchange ("NYSE") listing requirements, subject to waiver by the Nominating Committee;

    Service on no more than three other public company boards; except our CEO may serve on no more than one other public company board;

    High integrity and ethical standards;

    Standing and reputation in the individual's field;

    Risk oversight ability with respect to the particular skills of the individual director;

    Understanding of and experience with complex public companies or like organizations; and

    Ability to work collegially and collaboratively with other directors and management.

6


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

Each of our director nominees has satisfied all the core director criteria set forth in the skills matrix, except Messrs. Hemsley and Wichmann who are not independent directors because Mr. Hemsley is our Executive Chairman of the Board and Mr. Wichmann is our CEO.

The skills matrix provides further that the Board as a whole should represent a diverse group and have expertise in the substantive areas included in the following table, which also indicates the director nominees with expertise in each area.

Ballard
Burke
Flynn
Hemsley
Hooper
McNabb
Montgomery
Rice


Renwick
Shine
Wichmann
Wilensky

Corporate Governance

· · · · · ·   ·   · ·

Finance

· · · · · ·   ·   ·  

Health Care Industry

· ·   · ·   · · · · ·

Direct Consumer Markets

    ·     ·   ·      

Social Media/Marketing

          ·   ·      

Diversity

        ·   · ·     ·

Experience with Large Complex Organizations

· · · · · · · · · · ·

Technology/Business Processes

· · · · · ·   ·   ·  

Clinical Practice

            ·   ·    

Political/Health Care Policy/Regulatory

· · · ·   · · · · · ·

Capital Markets

· · · ·   ·   ·   ·  

Our Nominating Committee strives to maintain a balance of tenure on the Board. Long-serving directors bring valuable experience with our Company and familiarity with the successes achieved and challenges it has faced over the years, while newer directors bring fresh perspectives and ideas. Tenure of the eleven director nominees is as follows:

GRAPHIC

7


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

Board Diversity

UnitedHealth Group embraces and encourages a culture of diversity and inclusion. Valuing diversity makes good business sense and helps to ensure our future success. Our Board has not adopted a formal definition of diversity.

Our Board assesses its overall effectiveness through an annual evaluation process. This evaluation includes, among other things, an assessment of the overall composition of the Board, including the diversity of its members.

Although the Board does not establish specific goals with respect to diversity, the Board's overall diversity is a consideration in the director nomination process. For this year's election, the Board has nominated eleven individuals; all are incumbent nominees who collectively bring tremendous diversity to the Board. Each nominee is a strategic thinker and has varying, specialized experience in the areas that are relevant to the Company and its businesses. Moreover, their collective experience covers a wide range of geographies and industries, including health care, insurance, consumer products, technology and financial services and roles in academia and government. The eleven director nominees range in age from 60 to 83 and three of the eleven director nominees are women; two are African American; and one is a citizen of another country, specifically New Zealand.

Nominating Advisory Committee

The Board of Directors formed the Nominating Advisory Committee in 2006 to provide the Nominating Committee with additional input from shareholders and others regarding desirable characteristics of director candidates and the composition of the Board of Directors. The Nominating Committee considers, but is not bound by, input provided by the Nominating Advisory Committee. The Nominating Advisory Committee currently includes four individuals affiliated with long-term shareholders of the Company and one individual who is a member of the medical community. Members of the Nominating Advisory Committee do not receive any compensation from the Company for serving on the Nominating Advisory Committee. The Nominating Advisory Committee met once in 2017. A description of the Nominating Advisory Committee, including a description of how the members of the committee are nominated and selected, can be found on our website at www.unitedhealthgroup.com.

Process for Identifying and Evaluating Nominees; Shareholder Recommendations for Director Candidates

The Board's ongoing director development efforts are closely attuned to the evolving needs of the Company, factoring in the proactive management of the Board's skill profile and tenure to the environment the Company will operate in going forward. Since January 2017, we have added four new directors to the Board standing for election this year, three of whom are independent directors, advancing the skill and experience profile of the Board as well as its diversity.

The Board and the Nominating Committee believe having a diverse profile in life, cultural and business experience is essential to a balanced, well-functioning board. We have long considered diversity as an important component in identifying, evaluating and nominating director candidates and it has been a core element of our director skills matrix. We have for several years maintained an active "Evergreen" director candidate pipeline which reflects this continuing commitment to diversity in all dimensions. This approach reflects a long-standing, naturally inclusive approach and process. Prior to the appointment of each of the new independent directors in 2017 and 2018, the Nominating Committee considered a wide slate of potential candidates, including qualified women and minority candidates. Each eventual nominee was selected due to his or her overall skills and experience and was discussed with the members of our shareholder Nominating Advisory Committee, who uniformly supported the director profiles prior to appointment to the Board.

8


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

In assessing current directors for potential re-nomination, the Nominating Committee reviews the directors' overall performance on the Board of Directors and other relevant factors, including the criteria for nomination to the Board discussed above.

In considering potential candidates for election to the Board, the Nominating Committee considers views expressed by members of the Nominating Advisory Committee and other shareholders regarding skill sets that would be valuable for a new director to possess. The Nominating Committee has an outside firm on retainer to assist in identifying and evaluating director candidates. The Nominating Committee will also consider recommendations submitted by shareholders for director candidates. Recommendations should be directed to the Secretary to the Board of Directors. None of the Company's shareholders recommended candidates for the Board of Directors in connection with the 2018 Annual Meeting.

Shareholder Director Candidates for Inclusion in our Proxy Statement (Proxy Access)

Our Bylaws provide a shareholder or group of shareholders (of up to 20) who have owned at least 3% of our common stock for at least three years the ability to include in our proxy statement shareholder-nominated director candidates for up to 20% of the Board. To be eligible to use this right, the shareholder(s) and the candidate(s) must satisfy the requirements specified in our Bylaws. Our Bylaws are available at www.unitedhealthgroup.com/About/CorporateGovernance.aspx. For the 2019 Annual Meeting, director nominations submitted under these Bylaw provisions must be received at our principal executive offices, directed to the Secretary to the Board of Directors, no earlier than November 21, 2018 and no later than December 21, 2018.

Shareholder Nominations of Director Candidates at a Meeting

Our shareholders may also nominate candidates for election to the Board of Directors from the floor of our Annual Meeting of Shareholders, instead of including the director candidate in our proxy statement, only by submitting timely written notice to the Secretary to the Board in accordance with our Bylaws. The notice must include the information required by our Bylaws, which are available at www.unitedhealthgroup.com/About/CorporateGovernance.aspx. For the 2019 Annual Meeting, this notice must be received at our principal executive offices, directed to the Secretary to the Board of Directors, no earlier than February 4, 2019 and no later than March 6, 2019.

2018 Director Nominees

Our Certificate of Incorporation and Bylaws provide that each member of our Board of Directors is elected annually by a majority of votes cast if the election is uncontested. The Board of Directors has nominated the eleven directors set forth below for election by the shareholders at the 2018 Annual Meeting. All of the director nominees were elected by our shareholders at the 2017 Annual Meeting except for Dr. Montgomery Rice and Messrs. McNabb and Wichmann. Dr. Montgomery Rice and Mr. Wichmann were appointed unanimously by the Board in August 2017, and Mr. McNabb in February 2018. All of the nominees have informed the Board that they are willing to serve as directors if elected. If any nominee should decline or become unable to serve as a director for any reason, the persons named as proxies will elect a replacement. After seven years of exceptional service, Mr. Lawson is not standing for election at the 2018 Annual Meeting. Andrew P. Witty, who was appointed unanimously by the Board in August 2017, has stepped down from the Board in anticipation of his transition to the role of Chief Executive Officer of Optum in July 2018.

9


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

The Board of Directors recommends that you vote FOR the election of each of the nominees. Executed proxies will be voted FOR the election of each nominee unless you specify otherwise.

Name
Age
Director Since
William C. Ballard, Jr. 77 1993
Richard T. Burke 74 1977
Timothy P. Flynn 61 2017
Stephen J. Hemsley 65 2000
Michele J. Hooper 66 2007
F. William McNabb III 60 2018
Valerie C. Montgomery Rice, M.D. 56 2017
Glenn M. Renwick 62 2008
Kenneth I. Shine, M.D. 83 2009
David S. Wichmann 55 2017
Gail R. Wilensky, Ph.D. 74 1993

The director nominees, if elected, will serve until the 2019 Annual Meeting or until their successors are elected and qualified. Following is a brief biographical description of each director nominee. A table listing the areas of expertise in the skills matrix that are held by each director and that, in part, led the Board to conclude that each respective director should continue to serve as a member of the Board is included on page 7.

William C. Ballard, Jr. Director since 1993

Mr. Ballard served as Of Counsel to Bingham Greenebaum Doll LLP (formerly Greenebaum Doll & McDonald PLLC), a law firm in Louisville, Kentucky, from 1992 until 2008. In 1992, Mr. Ballard retired from Humana, Inc., a health and well being company, after serving with Humana in various roles for 22 years, including as the Chief Financial Officer ("CFO") and a director. In the past five years, he also served as a director of Welltower, Inc. (formerly Health Care REIT, Inc.).

Richard T. Burke


Director since 1977

Mr. Burke is Lead Independent Director of the Board of Directors of UnitedHealth Group and has served in that capacity since September 2017. Mr. Burke served as Chairman of the Board from 2006 to August 2017, has been a member of our Board since 1977, and was Chief Executive Officer of UnitedHealthcare, Inc., our predecessor corporation, until 1988. From 1995 until 2001, Mr. Burke was the owner, Chief Executive Officer and Governor of the Phoenix Coyotes, a National Hockey League team. Mr. Burke currently serves as a director of Meritage Homes Corporation.

10


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

Timothy P. Flynn


Director since 2017

Mr. Flynn was Chairman of KPMG International ("KPMG"), a global professional services organization that provides audit, tax and advisory services, from 2007 until his retirement in October 2011. From 2005 until 2010, he served as Chairman and from 2005 to 2008 as CEO of KPMG LLP in the U.S., the largest individual member firm of KPMG. Prior to serving as Chairman and CEO of KPMG LLP, Mr. Flynn was Vice Chairman, Audit and Risk Advisory Services, with operating responsibility for Audit, Risk Advisory and Financial Advisory Services practices. He previously served as a trustee of the Financial Accounting Standards Board, a member of the World Economic Forum's International Business Council, and a director of the International Integrated Reporting Council. Mr. Flynn currently serves as a director of Alcoa Corporation, JPMorgan Chase & Co. and Wal-Mart Stores, Inc.

Stephen J. Hemsley


Director since 2000

Mr. Hemsley is Executive Chairman of the Board of UnitedHealth Group and has served in that capacity since September 2017. Mr. Hemsley previously served as Chief Executive Officer from 2006 to August 2017. He has been a member of the Board of Directors since 2000. Mr. Hemsley joined the Company in 1997 as Senior Executive Vice President and became Chief Operating Officer in 1998. Mr. Hemsley served as President and Chief Operating Officer from 1999 to 2006 and as President and Chief Executive Officer from 2006 to November 2014. Mr. Hemsley currently serves as a director of Cargill, Inc.

Michele J. Hooper


Director since 2007

Ms. Hooper is President and CEO of The Directors' Council, a private company she co-founded in 2003 that works with corporate boards to increase their independence, effectiveness and diversity. She was President and CEO of Voyager Expanded Learning, a developer and provider of learning programs and teacher training for public schools, from 1999 until 2000. Prior to that, she was President and CEO of Stadtlander Drug Company, Inc., a provider of disease-specific pharmaceutical care, from 1998 until Stadtlander was acquired in 1999. Ms. Hooper is a nationally recognized corporate governance expert. Ms. Hooper currently serves as a director of PPG Industries, Inc. and United Airlines, Inc.

F. William McNabb III


Director since 2018

Mr. McNabb is Chairman of The Vanguard Group, Inc. and served as CEO from 2008 to 2017. He joined Vanguard in 1986. In 2010 he became Chairman of the Board of Directors and the Board of Trustees of the Vanguard group of investment companies. Earlier in his career, Mr. McNabb led each of Vanguard's client facing business divisions. Mr. McNabb serves as the Vice-Chairman of the Investment Company Institute's Board of Governors, and served as Chairman from 2013 to 2016. Mr. McNabb is Chairman of the Board of the Zoological Society of Philadelphia and serves on the Wharton Leadership Advisory Board and the Dartmouth Athletic Advisory Board. He is also a board member of CECP: The CEO Force for Good.

11


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

Valerie C. Montgomery Rice, M.D.


Director since 2017

Dr. Montgomery Rice is the President and Dean of the Morehouse School of Medicine, a medical school in Atlanta, Georgia, and has served in that capacity since 2014, and as the Executive Vice President and Dean from 2011 to 2014. Morehouse School of Medicine is among the nation's leading educators of primary care physicians and was recently recognized as the top institution among U.S. medical schools for their social mission. Prior to joining Morehouse School of Medicine, she served as dean of the School of Medicine and Senior Vice President of health affairs at Meharry Medical College from March 2006 to June 2009, and the director of the Center for Women's Health Research, one of the nation's first research centers devoted to studying diseases that disproportionately impact women of color, from 2005 to 2011. Dr. Montgomery Rice also serves as a Council Member of the National Institute of Health, National Center for Advancing Translational Science, and previously on the National Institute of Health's Minority Health and Health Disparities and Office of Research on Women's Health advisory councils, and the Association of American Medical Colleges Council of Deans administrative board. Dr. Montgomery Rice is a member of the National Academy of Medicine and a renowned infertility specialist and women's health researcher.

Glenn M. Renwick


Director since 2008

Mr. Renwick has been Chairman of the Board of Fiserv, Inc. since May 2017, and has been a director of Fiserv since 2001. Mr. Renwick also serves as Chairman of the Board of Directors of The Progressive Corporation, an auto insurance holding company, but announced his decision to retire from Progressive's Board at their 2018 annual meeting of shareholders. Mr. Renwick has served as Chairman of the Board of Progressive since November 2013. Mr. Renwick served as Executive Chairman of Progressive from July 2016 to June 2017, and as President and CEO from 2001 to 2016. Before being named President and CEO in 2001, Mr. Renwick served as CEO-Insurance Operations and Business Technology Process Leader at Progressive from 1998 to 2000. Prior to that, he led Progressive's Consumer Marketing group and served as President of various divisions within Progressive. Mr. Renwick joined Progressive in 1986 as Auto Product Manager for Florida.

Kenneth I. Shine, M.D.


Director since 2009

Dr. Shine has been Professor of Medicine at the Dell Medical School within the University of Texas System (the "UT System"), which consists of nine academic campuses and six health institutions, since June 2015. He served as the Special Advisor to the Chancellor for Health Affairs of the UT System from September 2013 to June 2015, as Executive Vice Chancellor for Health Affairs of the UT System from 2003 to September 2013, and as interim Chancellor of the UT System from 2008 to February 2009. Dr. Shine served as President of the Institute of Medicine at the National Academy of Sciences from 1992 until 2002. From 1993 until 2003, Dr. Shine served as a Clinical Professor of Medicine at the Georgetown University School of Medicine. From 1971 until 1992, Dr. Shine served in several positions at the University of California at Los Angeles School of Medicine, with his final position being Dean and Provost, Medical Sciences, and he continues to hold the position of Professor of Medicine Emeritus. Dr. Shine also served as Chair of the Council of Deans of the Association of American Medical Colleges from 1991 until 1992 and as President of the American Heart Association from 1985 until 1986. He is a nationally recognized cardiologist.

12


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

David S. Wichmann


Director since 2017

Mr. Wichmann is Chief Executive Officer of UnitedHealth Group and a member of the Board of Directors, having served in both capacities since September 2017. Mr. Wichmann served as President of UnitedHealth Group from November 2014 to August 2017. Mr. Wichmann also served as Chief Financial Officer of UnitedHealth Group from January 2011 to June 2016. From April 2008 to November 2014, Mr. Wichmann served as Executive Vice President of UnitedHealth Group and President of UnitedHealth Group Operations. Mr. Wichmann currently serves as a director of Tennant Company.

Gail R. Wilensky, Ph.D.


Director since 1993

Dr. Wilensky has been a senior fellow at Project HOPE, an international health foundation, since 1993. From 2008 to 2009, Dr. Wilensky was President of the Department of Defense Health Board and chaired its sub-committee on health care delivery. From 2006 to 2008, Dr. Wilensky co-chaired the Department of Defense Task Force on the Future of Military Health Care. During 2007 she also served as a commissioner on the President's Commission on Care for America's Returning Wounded Warriors. From 2001 to 2003, she was the Co-Chair of the President's Task Force to Improve Health Care for our Nation's Veterans. From 1997 to 2001, she was also Chair of the Medicare Payment Advisory Commission. From 1992 to 1993, Dr. Wilensky served as the Deputy Assistant to President George H. W. Bush for policy development, and from 1990 to 1992, she was the Administrator of the Health Care Financing Administration (now known as the Centers for Medicare and Medicaid Services) directing the Medicaid and Medicare programs for the United States. Dr. Wilensky is a nationally recognized health care economist. Dr. Wilensky currently serves as a director of Quest Diagnostics Incorporated.

13


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

Director Compensation

We seek to compensate our non-employee directors fairly for work required for a company of our size and scope and to align their interests with the long-term interests of our shareholders. Director compensation reflects our desire to attract, retain and benefit from the expertise of highly qualified people serving on the Company's Board of Directors. The Compensation Committee annually reviews the compensation of our non-employee directors and makes recommendations to the Board of Directors. In August 2017, the Compensation Committee, with the advice of its independent compensation consultant, undertook a review of the structure, philosophy and overall mix of the director compensation program as compared to the Company's compensation peer group and also the four large publicly traded managed health care companies. Following this review, and in connection with the establishment of the Lead Independent Director position, the Compensation Committee recommended, and the Board approved, an annual $75,000 cash retainer for the Lead Independent Director, effective as of September 1, 2017. No other changes were made to the compensation of non-employee directors. The Compensation Committee's recommendations, and the Board's subsequent approval, were made after considering the results of the market practices review and the complexity of the Company's structure and operations.

The following table highlights the material elements of our director compensation program:

Compensation Element
Compensation Value
Annual Cash Retainer $125,000
Annual Audit Committee Chair Cash Retainer $  25,000
Annual Compensation Committee Chair Cash Retainer $  20,000
Annual Nominating Committee Chair Cash Retainer $  20,000
Annual Public Policy Committee Chair Cash Retainer $  20,000
Annual Lead Independent Director Cash Retainer $  75,000 *
Annual Equity Award $175,000 aggregate fair value of deferred stock units
Equity Conversion Program At the director's election, cash compensation may be converted into DSUs, or if the director has met the stock ownership guidelines, into common stock
*
Prior to the establishment of the Lead Independent Director position on September 1, 2017, the independent Board Chair received an annual cash retainer of $300,000.

Cash Compensation

Cash retainers are payable on a quarterly basis in arrears on the first business day following the end of each fiscal quarter, and are subject to pro rata adjustment if the director did not serve the entire quarter. Directors may elect to receive deferred stock units ("DSUs") or common stock (if the director has met the stock ownership guidelines) in lieu of their cash compensation or may defer receipt of their cash compensation to a later date pursuant to the Directors' Compensation Deferral Plan ("Director Deferral Plan").

Equity-Based Compensation

Non-employee directors receive annual grants of DSUs under the 2011 Stock Incentive Plan having an aggregate fair value of $175,000, subject to rounding adjustments described below. The grants are in consideration of general

14


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

service and responsibilities and required meeting preparation. The grants are issued quarterly in arrears on the first business day following the end of each fiscal quarter and prorated if the director did not serve the entire quarter. The number of DSUs granted is determined by dividing $43,750 (the quarterly value of the annual equity award) by the closing price of our common stock on the grant date, rounded up to the nearest share.

The DSUs immediately vest upon grant and must be retained until completion of the director's service on the Board of Directors. Upon completion of service, the DSUs convert into an equal number of shares of the Company's common stock. A director may defer receipt of the shares for up to ten years after completion of service pursuant to the Director Deferral Plan. Non-employee directors who have met their stock ownership requirement may elect to receive common stock in lieu of DSUs and/or in-service distributions on pre-selected dates.

If a director elects to convert his or her cash compensation into common stock or DSUs, such conversion grants are made on the day the eligible cash compensation becomes payable to the director. The director receives the number of shares of common stock or DSUs, as applicable, equal to the cash compensation foregone, divided by the closing price of our common stock on the date of grant, rounded up to the nearest share. The DSUs immediately vest upon grant. A director may only elect to receive common stock if he or she has met the stock ownership guidelines.

The Company pays dividend equivalents in the form of additional DSUs on all outstanding DSUs. Dividend equivalents are paid at the same rate and at the same time that dividends are paid to Company shareholders and are subject to the same vesting conditions as the underlying grant.

Stock Ownership and Retention Guidelines

Under our stock ownership guidelines, we require non-employee directors to achieve ownership of shares of the Company's common stock (excluding stock options, but including vested DSUs and vested restricted stock units) having a fair market value equal to five times the directors' annual base cash retainer. Non-employee directors must comply with the stock ownership guidelines within five years of their appointment to the Board of Directors. All of our non-employee directors have met the stock ownership requirement or have served as a director for less than five years. Our directors are required to hold all equity awards granted until completion of service on the Board or until they have met our stock ownership requirements.

Director Deferral Plan

Under the Director Deferral Plan, subject to compliance with applicable laws, non-employee directors may elect annually to defer receipt of all or a percentage of their compensation. Amounts deferred are credited to a bookkeeping account maintained for each director participant that uses a collection of unaffiliated mutual funds as measuring investments. Subject to certain additional rules set forth in the Director Deferral Plan, a participating director may elect to receive the distribution in one of the following ways:

    a series of five or ten annual installments following the completion of his or her service on the Board of Directors;

    a delayed lump sum following either the fifth or tenth anniversary of the completion of his or her service on the Board of Directors;

    for cash deferrals, an immediate lump sum upon the completion of his or her service on the Board of Directors; or

15


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

    pre-selected amounts to be distributed on pre-selected dates while the director remains a member of the Board of Directors.

The Director Deferral Plan does not provide for matching contributions by the Company.

Other Compensation

We reimburse directors for any out-of-pocket expenses incurred in connection with service as a director. We also provide health care coverage to directors but only if the director is not eligible for subsidized coverage under another group health care benefit program. Health care coverage is provided generally on the same terms and conditions as current employees. Upon retirement from the Board of Directors, directors may continue to obtain health care coverage under benefit continuation coverage, and after the lapse of such coverage, under the Company's post-employment medical plan for up to a total of 96 months if they are otherwise eligible.

The Company maintains a program through which it will match up to $15,000 of charitable donations made by each director for each calendar year. The directors do not receive any financial benefit from this program because the charitable income tax deductions accrue solely to the Company. Donations under the program may not be made to family trusts, partnerships or similar organizations.

Our corporate aircraft use policy prohibits personal use of corporate aircraft by any independent director. However, because there is essentially no incremental cost to the Company, the policy permits a director's family member to accompany the director on a business flight on Company aircraft provided a seat is available.

16


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

The following table provides summary information for the year ended December 31, 2017 relating to compensation paid to or accrued by us on behalf of our non-employee directors who served in this capacity during 2017. Messrs. Hemsley and Wichmann are employee directors and do not receive additional compensation for serving as directors. Mr. Flynn joined the Board on January 13, 2017, Dr. Montgomery Rice joined the Board on August 4, 2017, and Mr. McNabb joined the Board on February 13, 2018. Mr. Witty served on the Board from August 4, 2017 until March 13, 2018. Mr. Darretta ceased serving on the Company's Board on June 5, 2017.

2017 Director Compensation Table

Name


Fees Earned
or Paid in
Cash
($)(1)




Stock
Awards
($)(2)



Option
Awards
($)(3)



Change in Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings
($)(4)







All Other
Compensation
($)(5)



Total
($)

William C. Ballard, Jr.

125,000 175,329 18,000 318,329

Richard T. Burke

406,659 175,329 25,640 607,628

Robert J. Darretta

204,588 204,588

Timothy P. Flynn

215,137 15,000 230,137

Michele J. Hooper

145,000 175,329 18,287 338,616

Rodger A. Lawson

145,000 175,329 23,678 344,007

Valerie C. Montgomery Rice, M.D.

19,702 27,642     14,955 62,299

Glenn M. Renwick

325,400 22,192 347,592

Kenneth I. Shine, M.D.

125,000 175,329 18,000 318,329

Gail R. Wilensky, Ph.D.

145,000 175,526 18,000 338,526

Andrew P. Witty

19,702 27,642     15,000 62,344
(1)
Mr. Darretta converted his $85,165 cash compensation into 504 DSUs, Mr. Flynn converted his $89,584 cash compensation into 490 DSUs and Mr. Renwick converted his $150,000 cash compensation into 850 DSUs.

(2)
The amounts reported reflect the aggregate grant date fair value of the stock awards granted in 2017 computed in accordance with FASB ASC Topic 718, based on the closing price of our common stock on the grant date. For a description of the assumptions used in computing the aggregate grant date fair value, see Note 11 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. For each director, the amounts reported include the aggregate grant date fair value of the annual equity award of DSUs granted in quarterly installments. The amounts reflect the value of fractional shares issued with the quarterly installments as we round equity grants up to the nearest whole share. For Messrs. Darretta, Flynn and Renwick, we combined the cash compensation they elected to convert into DSUs on a quarterly basis and the value of the quarterly DSU grant prior to determining the number of DSUs to be granted each quarter. For 2017, Dr. Shine elected that all of his, and Dr. Wilensky elected that a portion of her, annual DSU awards be granted in shares of common stock. Mr. Darretta did not stand for re-election at the 2017 Annual Meeting of Shareholders and his DSU awards were paid in common shares in accordance with the terms of the DSUs.

17


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

    The aggregate grant date fair values of the stock awards granted in 2017, computed in accordance with FASB ASC Topic 718 based on the closing price of our common stock on the grant date, are as follows:

Name
January 3,
2017
($)
April 3,
2017
($)
July 3,
2017
($)
October 2,
2017
($)

William C. Ballard, Jr.

43,753 43,881 43,863 43,832

Richard T. Burke

43,753 43,881 43,863 43,832

Robert J. Darretta*

75,074 75,012 54,502

Timothy P. Flynn*

65,077 75,033 75,027

Michele J. Hooper

43,753 43,881 43,863 43,832

Rodger A. Lawson

43,753 43,881 43,863 43,832

Valerie C. Montgomery Rice, M.D.

27,641

Glenn M. Renwick*

81,371 81,305 81,379 81,345

Kenneth I. Shine, M.D.

43,753 43,881 43,863 43,832

Gail R. Wilensky, Ph.D.

43,753 43,881 43,863 44,029

Andrew P. Witty

27,642
*
Includes the value of DSUs issued upon conversion of annual cash retainers as described in footnote 1 above of $85,165 for Mr. Darretta, $89,584 for Mr. Flynn and $150,000 for Mr. Renwick.

As of December 31, 2017, our non-employee directors held outstanding DSU awards as follows:
Name
Deferred
Stock Units

William C. Ballard, Jr.

22,139

Richard T. Burke

22,139

Timothy P. Flynn

1,185

Michele J. Hooper

28,716

Rodger A. Lawson

20,566

Valerie C. Montgomery Rice, M.D.

141

Glenn M. Renwick

42,213

Kenneth I. Shine, M.D.

28,852

Gail R. Wilensky, Ph.D.

20,814

Andrew P. Witty

141
(3)
The Company did not grant stock option awards to directors in 2017. As of December 31, 2017, our non-employee directors held outstanding (and unexercised) stock option awards as follows: Mr. Ballard — 30,000; Mr. Burke — 41,730; Mr. Darretta — 30,000; Ms. Hooper — 15,000; Mr. Renwick — 33,929; and Dr. Wilensky — 34,190.

(4)
The Director Deferral Plan does not credit above-market earnings or preferential earnings to the amounts deferred. There are no measuring investments tied to Company stock performance. The measuring investments are a collection of unaffiliated mutual funds identified by the Company.

(5)
In 2017, the Company matched $15,000 in charitable contributions made by the following directors to charitable organizations selected by the directors pursuant to the Company's Board Matching Program: Messrs. Ballard, Burke, Flynn, Lawson, Renwick and Witty; Dr. Shine; and Dr. Wilensky. The Company additionally matched $14,797 and $14,955 in charitable contributions made by Ms. Hooper and Dr. Montgomery Rice. In 2017, the Company also made $3,000 contributions to charitable organizations selected by the following directors: Messrs. Ballard, Burke, Lawson and Renwick and Ms. Hooper, Dr. Shine and Dr. Wilensky. In 2017, the Company also paid $7,764, $5,678, $4,251 and $490 in health care premiums on behalf of Messrs. Burke, Lawson and Renwick, and Ms. Hooper, respectively.

18


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

CORPORATE GOVERNANCE

Overview

UnitedHealth Group is committed to high standards of corporate governance and ethical business conduct. Important documents reflecting this commitment are listed below.

Corporate Governance Documents

GRAPHIC
Certificate of Incorporation
GRAPHIC
Code of Conduct: Our Principles of Ethics & Integrity

GRAPHIC
Bylaws
GRAPHIC
Related-Person Transactions Approval Policy

GRAPHIC
Principles of Governance
GRAPHIC
Board of Directors Communication Policy

GRAPHIC
Board of Directors Committee Charters
GRAPHIC
Political Contributions Policy

GRAPHIC
Standards for Director Independence
GRAPHIC
Corporate Environmental Policy

You can access these documents at www.unitedhealthgroup.com to learn more about our corporate governance practices. We will also provide copies of any of these documents without charge upon written request to the Company's Secretary to the Board of Directors. Our key corporate governance practices are highlighted below.

Board Structure and Shareholder Rights

    All members of our Board of Directors are elected annually by our shareholders.

    Our Certificate of Incorporation provides, in an uncontested election, each director must be elected by a majority vote. To address a provision in Delaware law that allows a director who has not been re-elected to remain in office until a successor is elected and qualified, we have a policy requiring any director who does not receive a greater number of votes "for" than "against" his or her election in an uncontested election to tender his or her resignation from the Board of Directors following certification of the shareholder vote.

    Our Bylaws provide eligible shareholders the right to include shareholder director nominees representing up to 20% of the Board in our proxy statement.

    Each share of stock is entitled to one vote and our Certificate of Incorporation and Bylaws do not have any supermajority shareholder approval provisions.

    As of September 1, 2017, the Board of Directors unanimously appointed an Executive Chairman of the Board and a Lead Independent Director. If a future Chairman of the Board is independent, a Lead Independent Director would not be required under our bylaws.

19


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

Board and Board Committee Composition and Performance

    All members of our Audit Committee are "audit committee financial experts" as defined by the Securities and Exchange Commission ("SEC").

    A non-management director may not serve on more than three other public company boards of directors, and our CEO may not serve on more than one other public company board of directors.

    Our directors are required to offer their resignations upon a change in their primary careers.

    Our Board of Directors and each Board committee regularly conduct executive sessions of non-management directors. Our Lead Independent Director presides over each executive session of non-management directors. Committee Chairs preside over executive sessions of their respective committees.

    Our Board of Directors and Board committees have the authority to retain independent advisors.

    Our Board of Directors and Board committees conduct performance reviews annually.

    All directors are required to complete a specified level of director training.

Guidelines and Board Policies

    Our Board of Directors has developed a CEO succession plan with input from our CEO and reviews the plan annually. The CEO succession plan has two components: one addressing an emergency or unanticipated loss of our CEO and one addressing longer-term succession. Material features of this plan include identification of Board members to lead the succession process, identification and development of internal candidates and identification of external resources necessary to ensure a successful transition.

    We maintain stock ownership and retention guidelines for directors and executive officers. See "Compensation Discussion and Analysis — Elements of Our Compensation Program — Other Compensation Practices — Executive Stock Ownership Guidelines and Stock Retention Policy," "Director Compensation — Equity-Based Compensation" and "Director Compensation — Stock Ownership and Retention Guidelines" for further information.

    We have a related-person transactions approval policy regarding the review, vote and ratification by our Nominating Committee on all proposed related-person transactions. See "Certain Relationships and Transactions."

    We have a clawback policy that entitles the Board of Directors to seek reimbursement from our senior executives if they are involved in fraud or misconduct that causes a material restatement or, in the event of a senior executive's violation of non-compete, non-solicit or confidentiality provisions. See "Compensation Discussion and Analysis — Elements of Our Compensation Program — Other Compensation Practices — Potential Impact on Compensation from Executive Misconduct/Compensation Clawbacks."

    We have a political contributions policy that is overseen by our Public Policy Strategies and Responsibility Committee (the "Public Policy Committee"). The Company's political contributions and public advocacy efforts and the contributions of our federal and state political action committees are disclosed on our website.

    We have an environmental policy that outlines our focus on minimizing our impact on the environment and creating a Company culture that heightens our employees' awareness of the importance of preserving the environment and conserving energy and natural resources.

20


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

    Our insider trading policy prohibits all directors, executive officers and employees from engaging in short sales and hedging transactions relating to our common stock, and requires advance approval of the Compensation Committee of any pledging of common stock by directors, executive officers and other members of management.

    Our Board of Directors believes that effective Board-shareholder communication strengthens the Board of Directors' role as an active, informed and engaged fiduciary, so we have a communication policy that outlines how shareholders and other interested parties may communicate with the Board of Directors. See "Corporate Governance — Communication with the Board of Directors."

    A Nominating Advisory Committee comprised of representatives from the shareholder and medical communities provides input into the composition of our Board of Directors.

Principles of Governance

Our Certificate of Incorporation and Bylaws, together with Delaware law and NYSE and SEC rules, govern the Company. Our Board has also adopted "Principles of Governance," which set forth many of our practices, policies and procedures in corporate governance. The policies and practices covered in our Principles of Governance include shareholder rights and proxy voting; structure, composition and performance of the Board of Directors; stock ownership and retention requirements; Board of Directors operation; individual director responsibilities; and Board committees. Our Principles of Governance are reviewed at least annually by our Nominating Committee and are revised as necessary.

Code of Conduct: Our Principles of Ethics & Integrity

The Code of Conduct: Our Principles of Ethics & Integrity document is posted on our website and covers our principles and policies related to business conduct, conflicts of interest, public disclosure, legal compliance, reporting and accountability, corporate opportunities, confidentiality, fair dealing and protection and proper use of Company assets. Any waiver of the Code of Conduct for the Company's executive officers, senior financial officers or directors may be made only by the Board of Directors or a committee of the Board. We will publish any amendments to the Code of Conduct and waivers of the Code of Conduct for an executive officer or director on our website.

Compliance and Ethics

We strongly and broadly encourage employees to raise ethics and compliance concerns, including concerns about accounting, internal controls or auditing matters. We offer several channels for employees and third parties to report ethics and compliance concerns or incidents, including by telephone or online, and individuals may choose to remain anonymous in jurisdictions where anonymous reporting is permissible. We prohibit retaliatory action against any individual who in good faith raises concerns or questions regarding ethics and compliance matters or reports suspected violations. We train all employees annually and periodically advise them regarding the means by which they may report possible ethics or compliance issues and their affirmative responsibility to report any possible issues. In our 2017 employee survey, 97% of employees said they knew what to do if they believed unethical behavior or misconduct occurred in their work area.

21


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

Director Independence

Our Board of Directors has adopted the Company's Standards for Director Independence, which are available on our website at www.unitedhealthgroup.com. The Standards for Director Independence requirements exceed the independence standards set by the NYSE.

Our Board of Directors has determined that William C. Ballard, Jr., Richard T. Burke, Timothy P. Flynn, Michele J. Hooper, Rodger A. Lawson, F. William McNabb III, Valerie C. Montgomery Rice, M.D., Glenn M. Renwick, Kenneth I. Shine, M.D. and Gail R. Wilensky, Ph.D. are each "independent" under the NYSE rules and the Company's Standards for Director Independence, and have no material relationships with the Company that would prevent the directors from being considered independent. Stephen J. Hemsley, Executive Chairman of the Board, and David S. Wichmann, CEO, are not independent directors.

In determining independence, the Board of Directors considered, among other factors, the business relationships between the Company and our directors and nominees, their immediate family members (as defined by the NYSE) and their affiliated companies. The Board of Directors considered whether any director or any nominee was a director, partner, significant shareholder or executive officer of an organization that has a relationship with the Company, and also considered charitable contributions that the Company or its affiliates made to organizations with which such directors or nominees are or have been associated. In particular, the Board of Directors evaluated the following relationships and determined that such relationships were in the normal course of business and did not impair the directors' ability to exercise independent judgment:

    Mr. Burke is an owner of Rainy Partners, LLC. Rainy Partners is a customer of the Company and paid the Company premiums for health insurance of approximately $232,800 in 2017. These premiums were determined on the same terms and conditions as premiums for other comparable customers.

    Dr. Montgomery Rice is President and Dean of Morehouse School of Medicine. In 2017, Morehouse School of Medicine paid the Company approximately $1.0 million for premiums for health insurance. Morehouse School of Medicine also paid the Company approximately $680,700 for fees associated with the administration of Morehouse School of Medicine's self-insurance program. These premiums and fees were determined on the same terms and conditions as premiums and fees for other comparable customers. This relationship terminated at the end of 2017. Morehouse School of Medicine paid the Company approximately $165,500 for software license fees and maintenance in 2017. The Company paid Morehouse School of Medicine approximately $875,400 for network provider services and approximately $341,800 in charitable donations in 2017. Total fees paid by the Company and the United Health Foundation to Morehouse School of Medicine during 2017 were substantally less than 1% of Morehouse School of Medicine's total revenues for 2017. Dr. Montgomery Rice was not directly involved in these relationships.

The Board of Directors also considered relationships between the Company and organizations on which our non-employee directors or their immediate family members serve only as directors and determined that such relationships did not impair the directors' exercise of independent judgment.

22


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

Board Leadership Structure

Our Board of Directors believes that having independent Board leadership is an important component of our governance structure. As such, our Bylaws require the Company to have either an independent Chairman of the Board or a Lead Independent Director.

In connection with the CEO succession that took place this year, our Board created the position of Executive Chairman. The Board unanimously selected Mr. Hemsley to serve as our Executive Chairman, due to his vision for the Company's future and his understanding of the Company and its evolving competitive environment. The Board also believed that Mr. Hemsley's service as Executive Chairman would enhance management continuity and provide a valuable resource for Mr. Wichmann as he transitioned to CEO.

Given that Mr. Hemsley is not an independent director under applicable NYSE rules, the Board determined to continue the strong voice of independent directors and created the role of Lead Independent Director. Mr. Burke was appointed to serve as Lead Independent Director.

Our Principles of Governance outline the specific duties of the Lead Independent Director, including:

    Serving as the principal liason between the independent directors and the Executive Chairman;

    Coordinating the preparation of agendas and materials for executive sessions of the Board's non-management directors;

    Calling meetings of the independent directors as appropriate and, in coordination with the Executive Chairman, all directors;

    Leading the Board's annual goal setting for and evaluation of the Executive Chairman and, in consultation with the Executive Chairman, the CEO;

    Serving as an ex-officio member of each committee and working with the Board Committee Chairs on the performance of their designated roles and responsibilities;

    Interviewing, along with the Chair of the Nominating Committee, all Board candidates and making director candidate recommendations to the Nominating Committee; and

    Being available for communications with shareholders, as needed.

23


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

Risk Oversight

Enterprise-Wide Risk Oversight

Our Board of Directors oversees management's enterprise-wide risk management activities. Risk management activities include assessing and taking actions necessary to manage risk incurred in connection with the long-term strategic direction and operation of our business. Each director on our Board is required to have risk oversight ability for each skill and attribute the director possesses that is reflected in the collective skills section of our director skills matrix described in "Proposal 1 — Election of Directors — Director Nomination Process — Criteria for Nomination to the Board" above. Collectively, our Board of Directors uses its committees to assist in its risk oversight function as follows:

    The Audit Committee oversees management's internal controls and compliance activities. The Audit Committee also oversees management's processes to identify and quantify material risks facing the Company, including risks disclosed in the Company's Annual Report on Form 10-K. The enterprise risk management function assists the Company in identifying and assessing the Company's material risks. The Company's General Auditor, who reports to the Audit Committee, assists the Company in evaluating risk management controls and methodologies. The Audit Committee receives periodic reports on the enterprise risk management function. The Audit Committee also receives periodic reports on the Company's cyber security efforts. In connection with its risk oversight role, the Audit Committee regularly meets privately with representatives from the Company's independent registered public accounting firm and the Company's CFO, General Auditor and Chief Legal Officer;

    The Compensation Committee oversees risk associated with our compensation practices and plans;

    The Nominating Committee oversees Board processes and corporate governance-related risk; and

    The Public Policy Committee oversees risk associated with the public policy arena, including health care reform and modernization activities, political contributions, government relations, community and charitable activities and corporate social responsibility.

Our Board of Directors maintains overall responsibility for oversight of the work of its various committees by receiving regular reports from the Committee Chairs regarding their work. In addition, discussions about the Company's strategic plan, consolidated business results, capital structure, merger and acquisition-related activities and other business discussed with the Board of Directors include a discussion of the risks associated with the particular item under consideration. Our current Board of Directors' leadership structure separates the positions of CEO and Chairman of the Board. Since we have an Executive Chairman, the Board has also appointed a Lead Independent Director. The Board believes that this separation is appropriate for the Company at this time because it allows for a division of responsibilities and a sharing of ideas between individuals having different perspectives.

Enterprise-Wide Incentive Compensation Risk Assessment

Our Compensation Committee requested that management conduct a risk assessment of the Company's enterprise-wide compensation programs. The risk assessment reviewed both cash incentive compensation plans and individual cash incentive awards paid in 2017 for the presence of potential design elements that could incent employees to incur excessive risk. The review included the ratio and level of incentive to fixed compensation, the amount of manager discretion, the level of compensation expense relative to the business units' revenues, and the presence of other design features that serve to mitigate excessive risk-taking, such as the Company's clawback policy, stock ownership and retention guidelines, multiple performance measures and similar features. The Compensation Committee also receives an annual report on the Company's compliance with its equity award program controls.

24


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

After considering the results of the risk assessment, management concluded that the level of risk associated with the Company's enterprise-wide compensation programs is not reasonably likely to have a material adverse effect on the Company. The results of the risk assessment were reviewed with the Compensation Committee at its February 2018 meeting. Please see "Compensation Discussion and Analysis" for a discussion of compensation design elements intended to mitigate excessive risk-taking by our executive officers.

Board Meetings and Annual Meeting Attendance

Directors are expected to attend Board meetings, meetings of committees on which they serve and the Annual Meeting of Shareholders. All then-current directors attended the 2017 Annual Meeting. During the year ended December 31, 2017, the Board of Directors held eleven meetings. All then-current directors attended at least 75% of the meetings of the Board and any Board committees of which they were members in 2017.

Board Committees

The Board of Directors has established four standing committees: Audit, Compensation, Nominating and Public Policy. These committees help the Board fulfill its responsibilities and assist the Board in making informed decisions. Each committee operates under a written charter, and evaluates its charter and conducts a committee performance evaluation annually.

The following table identifies the members of each committee as of April 10, 2018:

GRAPHIC

*
Mr. Burke is the Lead Independent Director and an ex-officio member of the Compensation Committee and Public Policy Committee. As an ex-officio member, Mr. Burke has a standing invitation to attend each committee meeting, but does not count for quorum purposes or vote on committee matters.

**
Mr. Lawson is not standing for re-election in June 2018.

25


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information
  Audit Committee Meetings Held in 2017: 10

 


Committee Members:


 

 


Glenn M. Renwick (Chair), Richard T. Burke, Timothy P. Flynn and Michele J. Hooper


 

 


Primary Responsibilities:


 

 


The Audit Committee has responsibility for the selection and retention of the independent registered public accounting firm and oversees financial reporting, internal controls and public disclosure. The Audit Committee reviews and assesses the effectiveness of the Company's policies, procedures and resource commitments in the areas of compliance, ethics, privacy and cyber security, by interacting with personnel responsible for these functions. The Audit Committee also oversees management's processes to identify and quantify material risks facing the Company. The Audit Committee establishes procedures concerning the receipt, retention and treatment of complaints regarding accounting, internal accounting controls and auditing matters. The Audit Committee operates as a direct line of communication between the Board of Directors and our independent registered public accounting firm, as well as our internal audit, compliance and legal personnel.


 

 


Independence:


 

 


Each of the Audit Committee members is an independent director under the NYSE listing standards and the SEC rules. The Board of Directors has determined that Messrs. Renwick, Burke and Flynn and Ms. Hooper are "audit committee financial experts" as defined by the SEC rules.

  



 




 


 


 
  Compensation Committee Meetings Held in 2017: 5

 


Committee Members:


 

 


Rodger A. Lawson (Chair), William C. Ballard, Jr. and Gail R. Wilensky, Ph.D.


 

 


Andrew P. Witty also served on the Compensation Committee from November 6, 2017 until March 13, 2018.


 

 


Primary Responsibilities:


 

 


The Compensation Committee is responsible for overseeing our policies and practices related to total compensation for executive officers, the administration of our incentive and equity-based plans and the risk associated with our compensation practices and plans. The Compensation Committee also establishes employment arrangements with our CEO and other executive officers, conducts an annual performance review of the CEO, and reviews and monitors director compensation programs and the Company's stock ownership guidelines.


 

 


Independence:


 

 


Each of the Compensation Committee members is an independent director under the NYSE listing standards and the SEC rules, a non-employee director under the SEC rules and an outside director under the Internal Revenue Code of 1986 (the "Internal Revenue Code").

  



 

 


 


 


 

26


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information
  Nominating Committee Meetings Held in 2017: 6

 


Committee Members:


 

 


Michele J. Hooper (Chair), William C. Ballard, Jr. and Richard T. Burke


 

 


Primary Responsibilities:


 

 


The Nominating Committee's duties include identifying and nominating individuals to be proposed as nominees for election as directors at each Annual Meeting or to fill Board vacancies, conducting the Board evaluation process, evaluating the categorical standards which the Board of Directors uses to determine director independence, and monitoring and evaluating corporate governance. The Nominating Committee also oversees Board processes and corporate governance-related risk.


 

 


Independence:


 

 


Each of the Nominating Committee members is an independent director under the NYSE listing standards.

  



 

 


 


 


 
  Public Policy Committee Meetings Held in 2017: 4

 


Committee Members:


 

 


Gail R. Wilensky, Ph.D. (Chair), Valerie C. Montgomery Rice, M.D. and Kenneth I. Shine, M.D.


 

 


Primary Responsibilities:


 

 


The Public Policy Committee is responsible for assisting the Board of Directors in fulfilling its responsibilities relating to the Company's public policy, health care reform and modernization activities, political contributions, government relations, community and charitable activities and corporate social responsibility. The Public Policy Committee is also responsible for overseeing the risks associated with these activities.


 

 


Independence:


 

 


Each of the Public Policy Committee members is an independent director under the NYSE listing standards.

  



 

 


 


 


 

27


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

Communication with the Board of Directors

The Board of Directors values the input and insights of our shareholders and other interested parties and believes that effective communication strengthens the Board of Directors' role as an active, informed and engaged fiduciary. The Board of Directors has adopted a Board of Directors Communication Policy to facilitate communication between shareholders and other interested parties and the Board. Under this policy, the Board of Directors has designated the Company's Secretary to the Board of Directors as its agent to receive and review communications.

The Secretary to the Board of Directors will not forward to the directors communications received which are of a personal nature or not related to the duties and responsibilities of the Board of Directors, including, without limitation, junk mail, mass mailings, business solicitations, routine customer service complaints, new product or service suggestions and opinion surveys. The Secretary to the Board of Directors will forward such complaints and suggestions received to the appropriate members of the Company's management.

Appropriate matters to raise in communications to the Board include:

    Board composition;

    Board succession planning process;

    CEO succession planning process;

    Executive compensation;

    Use of capital;

    Corporate governance; and

    General Board oversight, including accounting, internal controls, auditing and other related matters.

The policy, including information on how to contact the Board of Directors, may be found in the corporate governance section of our website, www.unitedhealthgroup.com.

28


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

EXECUTIVE COMPENSATION

Executive Summary

UnitedHealth Group's compensation program is designed to attract and retain highly qualified executives and to maintain a strong link between pay and the achievement of enterprise-wide goals. We emphasize and reward teamwork and collaboration among executive officers, which we believe fosters Company growth and performance, optimizes the use of enterprise-wide capabilities, drives efficiencies and integrates products and services for the benefit of our customers and other stakeholders.

In determining 2017 executive compensation, the Compensation Committee considered the Company's strong growth, operating performance and financial results, all of which were achieved in an uncertain environment, as well as individual executive performance. Some of our key business results for 2017 were:

    Revenues increased 9.0% to $201.2 billion from $184.8 billion in 2016;

    Operating earnings exceeded $15.2 billion, up 18% year-over-year;

    Net earnings of $10.72 per share, included a one-time, non-cash deferred tax benefit of $1.22 per share resulting from The Tax Cuts and Jobs Act;

    Adjusted earnings per share1 increased 25% to $10.07 per share from $8.05 per share in 2016;

    Cash flows from operations grew 39% year-over-year to $13.6 billion;

    Driven by net earnings growth, including the deferred tax revaluation, return on equity increased to 24.4% in 2017;

    Total shareholder return, which is defined as the increase in stock price, together with dividends paid, was 40% in 2017, 125% over the 2015-2017 time period and 324% over the 2013-2017 time period;

    Our annual cash dividend rate increased to $3.00 per share, paid quarterly, representing a 20% increase over the annual cash dividend rate of $2.50 per share paid quarterly since the second quarter of 2016;

    We repurchased $1.5 billion in stock at an average price of $173.54 per share;

    UnitedHealth Group was the top ranked company in the insurance and managed care sector on Fortune's 2018 "World's Most Admired Companies" list, based on 2017 results. This is the eighth consecutive year UnitedHealth Group has ranked No. 1 overall in its sector;

    UnitedHealth Group was included among the 2017 Best Employers for Diversity by Forbes; and

    UnitedHealth Group was named to both the Dow Jones Sustainability World and North America Indices for the 19th consecutive year.

The Compensation Committee believes that total compensation for the executive officers listed in the 2017 Summary Compensation Table (the "named executive officers" or "NEOs") should be heavily weighted toward long-term performance-based compensation. In 2017, long-term compensation represented 70-75% of the total mix of compensation granted to our named executive officers. The elements of compensation for our named executive officers were unchanged from 2016.


1
Adjusted earnings per share is a non-GAAP financial measure. Refer to Appendix A in this proxy statement for a reconciliation of adjusted earnings per share to the most directly comparable GAAP measure.

29


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

We endeavor to maintain strong governance standards in the oversight of our executive compensation programs, including the following policies and practices that were in effect during 2017:

    Performance-based compensation arrangements, including performance-based equity awards that use a balanced set of performance measures, with different metrics used for annual and long-term incentive plans.

    Double-trigger accelerated vesting of equity awards, requiring both a change in control and a qualifying employment termination, which is our only change in control consideration.

    No excise tax gross-ups and generally no executive-only perquisites such as company cars, security systems or financial planning.

    A compensation clawback policy that entitles the Board of Directors to seek reimbursement from our senior executives if they are involved in fraud or misconduct that causes a material restatement, or in the event of a senior executive's violation of non-compete, non-solicit or confidentiality provisions.

    A stock retention policy that generally requires executive officers to hold, for at least one year, one-third of the net shares acquired upon vesting or exercise of any equity award.

    Stock ownership guidelines for our executive officers, each of whom complied with the applicable ownership guidelines as of April 10, 2018. Mr. Wichmann, our CEO, owned shares equal to 140 times his base salary as of April 10, 2018.

    Prohibition on repricing of stock options and stock appreciation rights without shareholder approval.

    Annual advisory shareholder vote to approve the Company's executive compensation.

    The direct retention by the Compensation Committee of its independent compensation consultant, Pay Governance LLC, which performs no other consulting or other services for the Company.

For 2017, we eliminated our long-term performance cash plan so that all future long-term incentive awards will be delivered in equity.

On September 1, 2017, Stephen J. Hemsley retired from his role as Chief Executive Officer after serving more than ten years in that role and became Executive Chairman of the Board. David S. Wichmann succeeded Mr. Hemsley as Chief Executive Officer. Compensation changes made in connection with the CEO Succession are described below in "Compensation Discussion and Analysis — Elements of our Compensation Program — CEO Succession."

As discussed in detail below and reflected in the 2017 Summary Compensation Table, in 2017, our CEO, Mr. Wichmann, received the following compensation for 2017:

    Base salary of $1.16 million;

    Annual cash incentive award of $4.25 million, which represents 163% of his target opportunity;

    Long-term cash incentive award of $659,800 for the 2015-2017 performance period, which represents above target performance by the Company against pre-set 2015-2017 long-term incentive plan performance goals;

    A performance-based restricted stock unit opportunity ("performance shares") with a target grant date fair value of $5.55 million, restricted stock units ("RSUs") with a grant date fair value of $2.775 million, and non-qualified stock options with a grant date fair value of $2.775 million; and

    Company matching contributions of $159,519 made under the Company's 401(k) plan and Executive Savings Plan.

30


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

Compensation Discussion and Analysis

Philosophy and Objectives of our Compensation Program

We seek to attract and retain highly qualified executives and establish a strong pay-for-performance alignment by linking senior management compensation to enterprise and individual performance goals. The primary objectives of our executive compensation program are to:

    Align the economic interests of our executive officers with those of our shareholders.

    Reward performance that advances our mission of helping people live healthier lives and helping to make the health system work better for everyone.

    Reward performance that emphasizes teamwork and close collaboration among executive officers while also recognizing individual performance.

    Reward performance that supports the Company's values.

    Foster an entrepreneurial spirit with innovative thinking and action that leverages the ingenuity of our employees.

Compensation Program Principles

Our Compensation Committee uses the following principles to implement our compensation philosophy and achieve our executive compensation program objectives:

    Pay-for-performance.  A substantial portion of the total compensation of our executive officers is at risk and only earned based on achievement of enterprise-wide goals.

    Enhance the long-term value of the business.  Our compensation system is weighted toward long-term compensation to promote long-term shareholder value creation and avoid excessive risk-taking.

    Reward long-term growth and focus management on sustained success and shareholder value creation. Compensation of our executive officers is heavily weighted toward equity and we require significant stock ownership by our management team. This encourages sustained performance and positive shareholder returns.

    Provide standard benefits.  We provide standard employee benefits such that the overwhelming majority of management pay is at risk. We generally do not have "executive-only" benefits or perquisites.

Determination of Total Compensation

Role of the Compensation Committee

The Compensation Committee oversees the Company's policies and philosophy related to total compensation for executive officers. The Compensation Committee reviews and approves the compensation for the named executive officers based on its own evaluation, input from our Executive Chairman and CEO (for all executive officers except themselves), internal pay equity considerations, the tenure, role and performance of each named executive officer, input from its independent consultant and market data.

31


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

In addition, in making compensation decisions, the Compensation Committee considers the results of the Company's annual shareholder advisory votes approving the Company's executive compensation. More than 95% of the votes cast have been in favor of the Company's executive compensation at each of our annual meetings, beginning with our inaugural vote in 2011. The Compensation Committee believes these shareholder votes reflect strong support for the Company's executive compensation program.

The Compensation Committee's Use of an Independent Compensation Consultant

The Compensation Committee retains independent compensation consultant, Jon Weinstein of Pay Governance LLC, to advise the Compensation Committee on executive and director compensation matters, assess total compensation program levels and program elements for executive officers and evaluate competitive compensation trends. Pay Governance does not provide any other services to the Company and does not perform any work for management. The Compensation Committee has assessed the independence of Mr. Weinstein and of Pay Governance, specifically considering, in accordance with SEC rules, whether Mr. Weinstein and Pay Governance had any relationships with the Company, our officers or our Board members that would impair their independence. Based on this evaluation, the Compensation Committee concluded that Mr. Weinstein's and Pay Governance's work for the Compensation Committee does not raise any conflict of interest.

Competitive Positioning

The Compensation Committee believes total compensation for the named executive officers should be heavily weighted toward long-term performance-based compensation, but it does not target a specific mix of annual and long-term compensation or cash and equity compensation and does not formulaically set compensation targets.

In general, the Compensation Committee's goal is to achieve total compensation for the named executive officers as a group that falls within a range of the 50th to 75th percentiles of the market data for our peer group (as discussed below) if paid at target. The Compensation Committee believes this range is an appropriate reflection of the Company's relative size, complexity and consistently strong performance over the past several years. The following briefly summarizes the processes followed by the Compensation Committee to select competitive compensation benchmark data and how the Compensation Committee uses these data.

At the request of the Compensation Committee, Pay Governance conducts an annual review of the Company's compensation peer group. This review ensures that the peer group companies remain appropriate from a business and talent perspective and occurs at the second quarter Compensation Committee meeting because recent financial and compensation data are generally available.

The Compensation Committee uses the following methodology, which formulates a peer group focused on the industries reflected in the prior career experiences of approximately 250 of the Company's senior leaders:

    All U.S. publicly traded companies in the following industries as the starting point:

Health care

Pharma/Biotech/Life Sciences

Insurance

Financial Services

Technology

Professional Services

    Limit the list to the largest companies by revenue and market cap to avoid companies of significantly smaller scope; and

    Add major companies located near UnitedHealth Group's headquarters and primary operating locations to reflect relevant geographic markets for talent.

32


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

This screening process resulted in the 54 companies set forth under "Peer Group and Managed Care Companies" below. As compared to the peer group, the Company is:

    At the 97th percentile on a revenue basis;

    At the 78th percentile on a market cap basis;

    At the 77th percentile in earnings from operations; and

    At the 84th percentile in number of employees.

The Compensation Committee also considers market data from the four largest publicly traded managed care companies with which we compete for business, all of which are in the 54-company peer group described above. However, the Compensation Committee does not use this group of managed care companies as a primary reference point for benchmarking compensation practices because the Company is substantially larger, more complex and more diverse than these companies, and because we believe that the Company competes primarily for talent and capital with other successful large companies across a broader group of sectors.

Once the process is concluded and peer group companies are selected, the Compensation Committee generally uses the market data as follows:

    At the fourth quarter Compensation Committee meeting, Pay Governance presents an annual review of the market competitiveness of the Company's executive compensation program for the Company's executive officers. The review compares the compensation opportunities provided to the Company's executive officers to peer group companies on a position-by-position basis and on an aggregate basis.

    At the first quarter Compensation Committee meeting, the Compensation Committee determines pay opportunities for each officer using the market competitiveness assessment from the previous fourth quarter as a reference point. In addition, the Compensation Committee takes into consideration the Company's performance against previously established performance goals, each officer's individual performance, internal equity, the Executive Chairman and CEO's recommendations and other relevant business performance that may not be adequately captured by the Company and individual officer goals.

Target total compensation of our named executive officers as a group in 2017, consisting of base salary, target annual cash incentive award, target long-term cash incentive award and the grant date fair value of equity awards (including performance shares at target) was between the 50th and the 75th percentiles of the market data for our peer group.

The companies that were included in the 2017 peer group and the four managed care companies are listed at the end of this Compensation Discussion and Analysis.

33


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

Role of Management and CEO in Determining Executive Compensation

The Compensation Committee has the responsibility to approve and monitor all compensation for our executive officers. Management recommends appropriate enterprise-wide financial and non-financial performance goals for use in incentive compensation. Our Executive Chairman and CEO assist the Compensation Committee by evaluating the performance of the executive officers that report directly to them and recommending compensation levels for these executive officers.

Use of Tally Sheets and Wealth Accumulation Analysis

When approving compensation decisions, the Compensation Committee reviews comprehensive tally sheet information for each of our executive officers. These tally sheets are prepared by management and quantify the elements of each executive officer's total compensation. The tally sheets include a summary of all equity awards previously granted to each executive officer, the gain realized from past vesting or exercise of equity awards, the projected value of accumulated equity awards based upon various stock price scenarios and compensation to be paid under various potential employment termination scenarios. This is done to analyze the compensation each executive officer has accumulated to date and to fully understand the amount the executive officer could potentially accumulate in the future.

34


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

Elements of our Compensation Program

Overview

The compensation program for our named executive officers consists of the following elements:

Compensation Element


Objective
Type of Compensation

Base salary

To provide a base level of cash compensation for executive officers based on role, scope of responsibilities and experience Annual compensation, not variable

Annual cash incentive awards

To encourage and reward executive officers for achieving annual corporate performance goals and individual performance results Annual performance compensation, variable

Long-term cash incentive awards (no new awards after 2017 — replaced with long-term performance shares)

To encourage and reward executive officers for achieving three-year corporate performance goals Long-term performance compensation, variable

Equity awards

To motivate and retain executive officers and align their interests with shareholders through the use of: Long-term performance compensation, variable

Performance shares to encourage sustained performance and growth and potentially assist executives in building ownership in the Company

 

RSUs to retain executive officers and build stock ownership positions

 

Non-qualified stock options to encourage sustained stock price appreciation

 

Employee benefits

To promote the health, well-being and financial security of employees, including executive officers; constitutes the smallest part of total remuneration Annual indirect compensation,
not variable

35


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit

5

Annual
Meeting


6

Other
Information

As reflected in the charts below, the mix of total target compensation granted in 2017 to our named executive officers was heavily weighted towards performance-based and long-term incentive compensation, with long-term incentive awards making up approximately 72% of total target compensation for our named executive officers in aggregate.

GRAPHIC GRAPHIC

CEO Succession

In connection with the CEO Succession activities approved by the Board on August 15, 2017, the Compensation and Human Resources Committee, after considering market data, internal equity, advice from the Compensation Committee's independent compensation consultant and other factors, made the following changes (other aspects of compensation were not affected):

David S. Wichmann — Chief Executive Officer

    Approved an annual base salary increase to $1,300,000 effective September 1, 2017.

    Approved an annual cash incentive target opportunity of 200% of base salary.

    Awarded 30,031 stock options, 4,866 restricted stock units and 9,731 performance shares. The stock options and restricted stock units vest ratably over a four-year period and the performance shares have the same three-year cliff vesting schedule and performance criteria as the performance shares granted in February 2017.

    Entered into an amendment to his employment agreement, effective September 1, 2017 that:

    Provides Mr. Wichmann will serve as the Company's CEO.

    Replaces subsections (c) and (d) of the definition of "Good Reason," in Section 3.B.v of the employment agreement with the following: (c) makes changes that substantially diminish his duties or responsibilities from that of the Company's CEO; or (d) makes changes to his reporting relationship that result in him not reporting to the Chairman.

36


Table of Contents

  1

Board of
Directors


2

Corporate
Governance


3

Executive
Compensation


4

Audit