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Photograph by Michael Nagle / Bloomberg
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F. William "Bill" McNabb III, Former Chairman and Chief Executive Officer of the Vanguard Investment Group, made a bold purchase of
UnitedHealth
Group Stock (UNH). McNabb sits on the board of directors of the diversified health care company.
McNabb paid $ 1.5 million on May 1 for the purchase of 6,430 UnitedHealth shares, for an average price per share of $ 233.21. He now holds 7,879 shares, according to a form he's filed with the Securities and Exchange Commission.
UnitedHealth did not immediately respond to a request for McNabb's release to comment on its purchase of shares.
This was not only McNabb's first purchase of UnitedHealth shares in the open market, but also the first purchase by an insider of the company in five years. Former director Rodger Lawson, who stepped down from the UnitedHealth board of directors in 2018, was the company's last insider to buy shares in the open market. He paid $ 76,210 for 1,000 shares on April 24, 2014.
According to the latest power of attorney of UnitedHealth, McNabb was not obliged to buy shares so early in his services. Non-employee directors have five years to comply with the Company's share ownership guidelines, which specify that the property is equal to five times the annual basic cash compensation of directors of $ 125,000. Share ownership of a director may include acquired deferred share units, or DSUs. Directors who are not employees receive $ 205,000 in DSUs issued quarterly each year and vest as soon as they are awarded.
It therefore seems possible for a non-employee director to satisfy the ownership requirements of the shares without ever buying UnitedHealth shares in the open market. McNabb not only met the requirement in advance, but he more than doubled the expected property level of $ 625,000.
The stock of UnitedHealth is in the red for 2019. At the close of Friday, at $ 231.95, the action sports has posted a cumulative loss of 6.9% since the beginning of the year. Last month, the company announced earnings up for the first quarter and raised its guidance, but this did not have a lasting impact on the stock. Barron noted that the UnitedHealth stock offered strong dividend growth.
McNabb stepped down as CEO of Vanguard in January 2018 and joined UnitedHealth's board the following month. Vanguard has a significant investment in UnitedHealth. According to S & P Capital IQ, its 71.5 million shares of UnitedHealth represent a 7.5% stake. Vanguard is the second largest shareholder of the company.
Write to Ed Lin to [email protected] and follow @BarronsEdLin.
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