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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.            )

 

 

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9900 Bren Road East, Minnetonka, Minnesota 55343

April 19, 2019

Dear Shareholder:

We cordially invite you to attend our 2019 Annual Meeting of Shareholders. We will hold our meeting on Monday, June 3, 2019, at 10:00 a.m. Central Time in the lower level conference center at 300 North LaSalle, Chicago, Illinois 60654.

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:

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



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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,

David S. Wichmann
Chief Executive Officer

Stephen J. Hemsley
Executive Chairman of the Board

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By Order of the Board of Directors,

Dannette L. Smith
Secretary to the Board of Directors

April 19, 2019

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Director Nomination Process

Criteria for Nomination to the Board

We believe that an effective Board consists of a diverse group of individuals who bring a variety of complementary skills and a range of personal and business experience to their positions on the Board. The Nominating Committee developed and maintains a skills matrix to assist in considering the appropriate balance of experience, skills and attributes required of a director and to be represented on the Board as a whole. The skills matrix is consistent with the Company's long-term strategic plan and is regularly reviewed and updated by the Nominating Committee. The Nominating Committee evaluates Board candidates against the skills matrix on an annual basis to determine whether to recommend candidates for initial election to the Board and 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 by the Board. The core director criteria are:

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



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



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High integrity and ethical standards;



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Standing and reputation in the individual's field;



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



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



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

Each of our independent director nominees has satisfied all the core director criteria set forth in the skills matrix. Messrs. Hemsley and Wichmann are not independent directors because Mr. Hemsley serves as Executive Chairman of the Board and Mr. Wichmann is Chief Executive Officer.

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In addition, the skills matrix provides a number of substantive areas of expertise that the Board as a whole should represent. The following table includes a list of these areas and indicates the director nominees with expertise in each area.

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

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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, because the customers, clients and consumers we serve are as diverse as the thousands of communities where we live and work across all 50 states in the U.S. and 130 other nations. UnitedHealth Group's commitment to diversity and inclusion empowers our employees to contribute their best work, collaborating to be the preeminent health and well-being business and community partner of choice.

While our Board has not adopted a formal definition of diversity, and does not establish specific goals with respect to diversity, the Board's diversity is a consideration in the director nomination process and is assessed annually when the Board evaluates overall effectiveness.

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 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, corporate governance and government. The eleven director nominees range in age from 56 to 78; three of the eleven director nominees are women; two are African American; and one is a citizen of New Zealand.

Update on Recent Changes in Board Membership

Recent changes to the Board of Directors include:

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Timothy P. Flynn, former Chairman of KPMG International, joined the Board in 2017;



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Valerie C. Montgomery Rice, M.D., President and Dean of the Morehouse School of Medicine, joined the Board in 2017;



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F. William McNabb III, former Chairman of The Vanguard Group, Inc., joined the Board in 2018;



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John H. Noseworthy, M.D., former Chief Executive Officer and President of Mayo Clinic, joined the Board in 2019;



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Sir Andrew P. Witty relinquished his position on our Board in 2018 in anticipation of his appointment as Chief Executive Officer of Optum and Executive Vice President of UnitedHealth Group later the same year; and



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Kenneth I. Shine, M.D., retired from the UnitedHealth Group Board of Directors in 2018 after nearly ten years of exceptional service as an independent director.

We have for several years maintained an active "Evergreen" director candidate pipeline which reflects our continuing commitment to diversity in life, cultural and business experience among director nominees. 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 2019 Annual Meeting.

Prior to the appointment of each of the new independent directors in 2017, 2018 and 2019, 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.

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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 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 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 2018. 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/about/corporate-governance.

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/corporate-governance. For the 2020 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, 2019 and no later than December 21, 2019.

Shareholder Nominations of Director Candidates at an Annual 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/corporate-governance. For the 2020 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, 2020 and no later than March 5, 2020.

2019 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 2019 Annual Meeting. All of the director nominees were elected by our shareholders at the 2018 Annual Meeting except for Dr. Noseworthy, who was appointed unanimously by the Board in February 2019. The Company and the Nominating Committee were familiar with Dr. Noseworthy and had considered him as a potential Board candidate upon his availability following retirement from the Mayo Clinic. Following Dr. Shine's retirement from the Board, the Nominating Committee was particularly interested in strengthening the depth of clinical expertise on the Board. All of the nominees have informed the Board they are willing to serve as directors if elected. If any nominee should become unable to serve as a director for any reason, the persons named as proxies will elect a replacement.

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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.

The director nominees, if elected, will serve until the 2020 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 held by each director and which, in part, led the Board to conclude each respective director should continue to serve as a member of the Board, is included on page 7.

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Director Compensation

We seek to compensate our non-employee directors fairly for work required for a company of our size, complexity 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. The Compensation Committee annually reviews the compensation of our non-employee directors and makes recommendations to the Board of Directors. In August 2018, 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, the Compensation Committee recommended, and the Board approved, an increase in the annual grant of deferred stock units awarded to non-employee directors from $175,000 to $205,000, effective as of October 1, 2018. 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:

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"). The cash retainers are in consideration of general service and responsibilities and required meeting preparation.

Equity-Based Compensation

Non-employee directors receive annual grants of DSUs under the 2011 Stock Incentive Plan having an aggregate fair value of $205,000 effective October 1, 2018 and pro-rated for the remainder of the year. Prior to October 1, 2018, the aggregate fair value of the DSUs was $175,000. The grants are issued quarterly in arrears on

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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 $51,250 (the quarterly value of the annual equity award; $43,750 prior to October 1, 2018) by the closing price of our common stock on the grant date, rounded up to the nearest share. The grants are in consideration of general service and responsibilities and required meeting preparation.

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 predetermined 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:

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



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

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



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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 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.

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The following table provides summary information for the year ended December 31, 2018, relating to compensation paid to or accrued by us on behalf of our non-employee directors who served in this capacity during 2018.

2018 Director Compensation Table

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Overview

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

You can access these documents at www.unitedhealthgroup.com/about/corporate-governance to learn more about our corporate governance practices. We will also provide copies 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

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



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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.



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



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



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We have an Executive Chairman of the Board and a Lead Independent Director.

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Board and Board Committee Composition and Performance

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



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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.



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



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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.



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



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

Guidelines and Board Policies

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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.



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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.



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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."



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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."



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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.



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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.

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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.



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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."



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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 2018 employee survey, 96% of employees said they knew what to do if they believed unethical behavior or misconduct occurred in their work area.

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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/about/corporate-governance. 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, F. William McNabb III, Valerie C. Montgomery Rice, M.D., John H. Noseworthy, M.D., Glenn M. Renwick 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:

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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 $398,600 in 2018. These premiums were determined on the same terms and conditions as premiums for other comparable customers.



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Dr. Montgomery Rice is President and Dean of Morehouse School of Medicine. In 2018, Morehouse School of Medicine paid the Company approximately $175,600 for claims software and medical records review services. The Company paid Morehouse School of Medicine approximately $910,000 for services as a network care provider in 2018. Total moneys paid by the Company and the United Health Foundation to Morehouse School of Medicine during 2018 were substantially less than 1% of Morehouse School of Medicine's total revenues for 2018. 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.

Board Leadership Structure

Our Board of Directors believes 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. Our current Board of Directors' leadership structure also separates the positions of CEO and Chairman of the Board. The Board believes 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.

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In connection with the CEO succession that took place in 2017, 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. 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:

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serving as the principal liaison between the Independent Directors and the Chairman;



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presiding at all meetings of the Board at which the Chairman is not present and at executive sessions of the Board's Independent Directors;



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calling meetings of the Independent Directors as appropriate and, in coordination with the Chairman, all members of the Board;



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facilitating discussion and open dialogue among the Independent Directors during Board meetings, executive sessions and outside of Board meetings;



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serving as an ex officio member of each Board committee of which the Lead Independent Director is not a member and working with the Board committee chairs on the performance of their designated roles and responsibilities;



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working with the Chairman to approve the agendas and meeting schedules for Board meetings;



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working with the Chairman on the appropriateness (including quality and quantity) and timeliness of information provided to the Board;



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meeting individually with the Chairman after each regularly scheduled Board meeting;



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coordinating the preparation of agendas and materials for executive sessions of the Board's Independent Directors, if any;



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leading the Board's annual goal setting and evaluation process for the Chairman;



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assisting the Chair of the Nominating and Corporate Governance Committee in reviewing and reporting on the results of the Board and committee performance self-evaluations;



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communicating to the Chairman any decisions reached, suggestions, views or concerns expressed by Independent Directors in executive sessions or outside of Board meetings;



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meeting periodically with individual Independent Directors to discuss Board and committee performance, effectiveness and composition;



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where appropriate, supporting the Company in interactions with shareholders and regulators in consultation with the Chief Executive Officer and Chairman; and



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interviewing, along with the Chair of the Nominating and Corporate Governance Committee, all Board candidates and making director candidate recommendations to the Nominating and Corporate Governance Committee.

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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:

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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;



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



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



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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.

Enterprise-Wide Incentive Compensation Risk Assessment

Our Compensation Committee requested that management conduct an annual 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 2018 for the presence of potential design elements that could motivate 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.

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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 2019 meeting. Please see "Compensation Discussion and Analysis" for a discussion of compensation design elements intended to mitigate excessive risk-taking by our executive officers.

The Compensation Committee also receives an annual report on the Company's compliance with its equity award program controls.

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 2018 Annual Meeting. During the year ended December 31, 2018, the Board of Directors held twelve 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 2018.

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 9, 2019:

*

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.

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Communication with the Board of Directors

The Board of Directors values the input and insights of our shareholders and other interested parties and believes 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:

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Board composition;



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Board succession planning process;



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CEO succession planning process;



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Executive compensation;



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Use of capital;



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Corporate governance; and



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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/about/corporate-governance.

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Compensation Discussion and Analysis

Our Compensation Program Philosophy and Objectives

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:

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Align the economic interests of our executive officers w