Welcome to the 2020 Annual Meeting for UnitedHealth Group Incorporated. Our host for today's call is David Wickman, CEO and Director. At this time, all participants will be in a listen only mode. I will now turn the call over to your host. Mr.
Wickman, you may begin, sir.
Thank you, and good morning, ladies and gentlemen. I am Dave Wickman, the Chief Executive Officer and the Director of UnitedHealth Group Incorporated. As Chief Executive Officer, I have the privilege of welcoming all of you to our 2020 Annual Meeting of Shareholders. I'd like to thank all of our shareholders and guests for attending and for your flexibility in participating virtually this year. Given the continued magnitude and impact of COVID-nineteen, your safety and the health of our communities, the people we serve and our team members and their families continues to be our highest priority.
I will address further our efforts in response to the COVID-nineteen pandemic and other key business matters following the conclusion of today's Annual Shareholder Meeting agenda items. Before proceeding to the business of the meeting, I am pleased to introduce our Board members who are standing for reelection, all of whom are present virtually today. They are Steve Hemsley, our Chairman of the Board Richard Burke, Lead Independent Director Tim Flynn Michelle Hooper Bill McNabb Doctor. Valerie Montgomery Rice, Doctor. John Noseworthy, Glenn Renwick and Doctor.
Gail Walensky. I also want to acknowledge Bill Ballard's service to UnitedHealth Group. He has decided to retire from the Board after 27 years. He will be missed and we recognize and thank him for his exceptional and dedicated service. Also in attendance are senior leaders of our management team.
And at this time, I'd also like to introduce Terren Lynch and Patrick Dooling, representatives of Deloitte and Touche LLP, who are present virtually. I will act as Chair of the Annual Meeting and Danette Smith, Senior Deputy General Counsel and Secretary to the Board will act as secretary for this meeting. We will now proceed with the meeting. I will ask Jeanette to conduct the formal portion of this meeting.
Thank you, Dave. I now call the meeting to order and declare the polls to be open for voting on all items of business for this meeting. Before we get to anything else, given this is our 1st virtual shareholders meeting, I want to quickly make sure our shareholders know how to submit questions during the meeting. If any shareholders have questions, please make sure you are logged into the meeting with your control number and submit them online now so that we can have time to answer them appropriately during the meeting. Questions can only be submitted until the conclusion of the presentation of proposals.
For the benefit of all shareholders, so it is clear who is asking a question, when you submit a question, please enter your name and your organization, if applicable, along with the text of your question. If your question relates to a proposal, please so indicate so that your question can be addressed at the appropriate time. We have made available to you on the virtual annual meeting website an agenda for the meeting as well as guidelines and procedures to be followed during the course of the meeting. In the interest of openness and fairness to all shareholders participating in today's meeting, we will follow these guidelines and complete the formal business in accordance with these procedures. Copies of the notice of the annual meeting, the 2020 proxy statement and the annual report are available on the virtual annual meeting website.
All of these documents will be filed with the records of the meeting. Karl Hegberg of C. T. Hegberg LLC has been appointed as Inspector of Election for this annual meeting and is present with us virtually today. Hagberg has taken Mr.
Hagberg has taken and signed an oath to execute faithfully the duties of Inspector of Election with strict impartiality and according to the best of his abilities. His oath will be filed with the records of the meeting. The record date fixed by the Board of Directors for the determination of shareholders entitled to receive notice and vote at this meeting was the close of business on April 7, 2020. As of that date, the company had outstanding 947,426,156 shares of common stock, the only class of stock issued and outstanding. Each share is entitled to one vote.
There are represented at the meeting by proxy 858,000,0045,922 shares of common stock out of a total of 947,426,156 shares of common stock outstanding on the record date. Therefore, a quorum is present. It is declared that this meeting is duly constituted, has been duly convened, and is ready to proceed with the transaction of business. As I indicated earlier, the polls are open for voting on all of the items of business for this meeting. We will close the polls after the proposals have been presented.
If you wish to vote and have not already done so, please follow the instructions included in the meeting guidelines. If you have previously voted by proxy, there is no need to vote during the virtual meeting unless you want to change your prior vote or revoke your proxy. As described in our proxy statement, there are 5 items of business for today's meeting. The first item of business is to elect Richard Burke, Tim Flynn, Steve Hemsley, Michelle Hooper, Bill McNabb, Doctor. Valerie Montgomery Rice, Doctor.
John Noseworthy, Glenn Renwick, David Wichman and Doctor. Gail Wilinski to serve as directors of the company. The second item of business is to consider and vote on a proposal relating to advisory approval of the company's executive compensation. The 3rd item of business is to consider and vote on a proposal to ratify the appointment of Deloitte and Touche LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020. The 4th item of business is to consider and vote on the approval of the UnitedHealth Group 2020 Stock Incentive Plan.
The 5th item of business is to consider and vote on a shareholder proposal requesting that any material amendment to the company's bylaws be subject to a non binding shareholder vote. The shareholder proposal was submitted by John Chvedden. In accordance with the meeting guidelines, Mr. Chvedden will have 3 minutes to present his shareholder proposal. I hereby recognize John Chvedden.
Operator, would you please open up Mr. Chvedden's conference line in order to permit him to present his proposal?
Hello. This is John Cheven. Can you hear me okay?
Yes, we can.
This is Proposal 5. Let shareholders vote on bylaw amendments. Shareholders request that the Board of Directors take the steps necessary to amend the bylaws to require that any material amendment to the bylaws that is approved by the Board shall be subject to a non binding shareholder vote as soon as practical unless such amendment is already subject to a shareholder vote. The Board of Directors would have the discretion to determine which bylaw amendments are material. It is important that bylaw amendments take into consideration the impact that such amendments can have on limiting the rights of shareholders and on reducing the accountability of directors and managers.
For example, directors could have a narrowly crafted exclusive form by law to suit the unique circumstances facing our directors. A proxy advisor recently adopted a policy to vote against directors who unilaterally adopt a bylaw provision or amendment to the articles of incorporation that materially diminish shareholder rights. A reason for shareholders to consider this proposal is the tendency of UnitedHealth to get involved in litigation based on its business practices. A few examples, more than 50 independent pharmacies filed a class action lawsuit against UnitedHealth in regard to the company's alleged failure to comply with state pharmacy claims reimbursement law. UnitedHealth was sued in September, accused of illegally denying mental health and addiction benefits to maximize profits.
New York's insurance regulators said it is launching an investigation into UnitedHealth algorithm that a study found prioritized care for healthier white patients over sicker black patients. A federal judge recently ruled that UnitedHealth breaches fiduciary duty to patients by using unreasonable and overly restricted guidelines to make coverage decisions for tens of thousands of mental health and substance abuse patients. The decision upheld on appeal could have wide ramifications for what insurers must cover in the fast growing behavioral healthcare sector. In the statement next to this proposal, management claims it has a robust shareholder engagement program, But apparently management is not making good use of a so called shareholder engagement program. The shareholder engagement apparently does not seek shareholder input on the borderline practices of the Board of Directors.
Like a nomination committee where the supersized average tenure was 28 years, like an executive pay committee where the supersized average tenure was 25 years. Then there was a Lead Director, Mr. Richard Burke, with 43 years of supersize tenure and no other Board of Directors service to keep his skills sharp. Supersized long tenure can seriously erode Director independence. Director independence is a key attribute for a lead director and for the members of the important board committees.
Please vote yes. Let Scholes vote on bylaw amendments, proposal 5.
Thank you, Mr. Shevedden. At this time, all proposals have been presented and the window to submit questions online, both with respect to the proposals as well as any general questions is closed. We have received a few questions regarding the proposals, which will be addressed now. The first question is from a shareholder asking, what was the selection process for Director Jon Noseworthy?
Operator, will you please open the line of Michelle Hooper, the Chair of our Nominating and Corporate Governance Committee, to respond to this question?
Good morning and thank you so much for your question. We have a very long standing process within UnitedHealth Group looking for excellent candidates to add to our company's Board of Directors. With the selection specifically of Doctor. Nose worthy, we are very excited and pleased with his joining of our Board. His clinical experience as the former President and CEO of Mayo Clinic is outstanding and is long serving.
He's had over 30 years as a clinician and over 10 years experience or 9 years experience rather as CEO of Mayo Clinic, which I'm sure most of you know is a world class global leader in healthcare services. He is also a key strategic thinker on the future of healthcare, which is an important attribute as we look at various skills within our skills matrix to add to our Board. We as per our processes ran Doctor. Noseworthy's skills in general by a group that we have called the Nominating Advisory Committee for that helps our Nominating Committee within UnitedHealth Group as we select candidates. This nominating advisory committee is comprised of outside investors and a clinician that helps us as we look at skills necessary for our future as a company and also the skills of individual attributes of individuals that we are considering for our Board.
They were accepting and pleased with the attributes that Doctor. Nose worthy would bring to the Board. And as we have had him on our Board for this last year, he has been an outstanding member serving us as the Board of Directors and you as shareholders.
Thank you, Michelle. The next question relating to the proposals is from a shareholder who is asking, there is a new 2020 incentive plan. How many UNH employees are participating and benefiting in the company's stock incentive plan? We'll ask our Executive Vice President and Head of Human Capital, Patricia Lewis, to answer that question. We have about 5,000 eligible employees who will participate in our 2020 plan.
That completes the questions relating to the proposals. At this time, I declare the polls to be officially closed for voting on all of the items of business for this annual meeting. We will now turn to our general Q and A session. The first set of questions is submitted by shareholders is that there have been a few questions on capital allocation plans. Can you please share details of the share repurchase and dividend plan?
I'm going to ask our Chief Financial Officer, Executive Vice President and Chief Financial Officer, John Rex, to address that question.
Thank you for the question. Yes, in terms of capital allocation, the company has a long history in terms of the parameters that we use to evaluate appropriate allocation of capital across a number of priorities. 1st and foremost, across those priorities is reinvesting in our businesses and how we serve people better. So we always are striving to improve our capabilities, add to them and expand the number of people that we can serve. And that's 1st and foremost where this company is often devoted capital allocation.
In addition to that also, as we for our shareholders, we also devote capital and we to dividend and share repurchase. Those are items that are considered by the Board frequently and we evaluate those opportunities and how we would and the other opportunities that we have to build our businesses. So a long ongoing process in terms of the allocation of that capital, thoughtfully approached and regularly approached by our Board of Directors as we look to those opportunities. And pretty much we've been in the same general mode of that for many years now.
Thank you, John. There have been a couple of questions about COVID-nineteen and the impact on our business. Specifically, have there been any COVID-nineteen related layoffs? And do we see any new business opportunities?
Yes, this is Dave Wechmann again, Chief Executive of the company. Thank you for the question, very insightful. Part of the remarks I'll make after the close of the formal part of the meeting here, we'll address our COVID-nineteen response broadly. Happy to do so in just a moment overall. There have been several there have been no layoffs due to COVID-nineteen across UnitedHealth Group.
So our intention at the very beginning was to make sure that our team members and their families were fully engaged and available. Well, they were safe first, but also engaged and available to serve. So we've been employing and paying full wages to our entire workforce. We also enhanced coverage for them, which protects them in the event that they become ill from COVID-nineteen, which means they do not need to take PTO for that. We also waived all co pays and any out of pocket costs with respect to that as well as put together a number of other programs to support and care for them overall.
In terms of new business opportunities, there have been several and I'll just touch on one. The one thing I think has become intensely clear is that there are high risk members broadly in our communities. These are the people that bear certain conditions in the case of COVID-nineteen. It's a series of clinical conditions as well as above the age 65. Protecting them is essential in order to manage the mortality rate due to COVID-nineteen.
And one of the things that we've done is we've used our epidemiologists and our scientists and our clinical resources to better manage infectious disease broadly. And this is new protocols, processes as well as deployed technologies in collaboration with the HCA, Quest, LabCorp, Microsoft and others. And so that's one of the areas that we see in the future is to better manage occupational health broadly in America. And we think that that's something that we can uniquely provide. One of those locations is in the home.
And so we think continuing down the path of enabling the home as a place of care with skilled resources, but in addition bringing in telemedicine, not just any, but rather with their doctor, digital monitoring and digital therapeutics, the ability to quickly and effectively manage infection. These are all things that we think will be part of the healthcare system of the future and a critical part of how we serve our members and patients in the forward looking period. Thank you.
The 3rd general question that we have is, Mr. Chairman, the recent growth in size of passive mutual funds corporate ownership interest in U. S. Corporations has been dramatic, raising important public policy and corporate governance issues. Currently BlackRock owns 7% and Vanguard owns 7.7% of the company's outstanding shares.
Vanguard manages assets in the company's retirement plans. Does the Board see this growing ownership concentration of passive index fund holders as positive or negative development as regards long term corporate planning and performance? And also, are there a potential conflict of interest when a 5% holder is managing company retirement plan assets? Thank you, Mr. Chairman.
Thank you for the question. This is Steve Hemsley. The emergence of passive funds is not a new trend. It has been growing in the marketplace for quite some time. And its presence, we think, merely reflects their importance in market conditions.
It hasn't really changed our approach or expectations, performance for ourselves, which have long been broad, strategic, mission driven and in line with evolving market norms. So it has not really changed our approach. We continue to pursue our agenda within the enterprise on behalf of shareholders as we have in the past. With respect to these funds and our employees, there we seek to really choose the very best that can be available in terms of services to serve and oversee our retirement plans and we think that we provide our employees meaningful choice within those. So we think that we have taken the we've hit this correct note there.
Thank you.
The next question is what percent rise do you see in individual healthcare for 2021?
It's Dave Wicksand, Chief Executive again. I guess there's a couple of ways you could interpret that question. I answered in a couple of different ways. 1, without getting too specific about numbers, I think we will with the decelerating economy, we'll clearly see folks moving out of employer sponsored coverage and into a wide array of other coverages. We believe the United States has a near universal health coverage system, a system that we've been opponents for now 20 years.
And as we see a reduction in the employment levels in the United States, we expect to see an increase in coverage levels from Medicaid, from the individual exchanges, which will be part of the individual market referred to. We also expect the same from the short term limited duration, which are the state based and managed individual insurance markets across the country, possibly some increase in COBRA coverage as well. And then some people will qualify for Medicare and may seek their coverages in that fashion. As it relates to percentage increases and trends and cost structures, we believe the traditional commercial insurance market is in the zone of a 6% plus or minus 50 basis point. The highest managed and best managed plans will experience somewhere around the 0% to 2% to the extent that those plans are not effectively managed.
As we look to government programs, we're definitely seeing rates in the low single digits both for Medicaid and Medicare. Obviously, Medicaid participants don't participate in funding their coverages. But as it relates to Medicare, this year's rate notice from CMS had a trend level just around 1% or so, 1% to 2%. So we see the healthcare costs as maintaining and managing those is a very high priority for this company. We seek to manage costs inside the rate of general inflation overall.
Thank you.
The next question is, my name is Jordan Ash. I work for SEIU 32 BJ. We represent approximately 500 secondurity officers who protect the United Health Offices in Connecticut and other commercial office buildings throughout the Hartford County. These officers are currently negotiating their first contract. Can the security officers who protect UnitedHealth offices in Connecticut count on you to help them live healthier lives by making sure they have quality affordable health insurance?
Thank you for the question, Mr. Ash. Dave Wickman again. Just by way of background, UnitedHealth Group employees believe somewhere around 6,000 people who live and work in the state of Connecticut, and that includes over 2,000 clinicians that are delivering care to Connecticut families on the front lines. We do not directly employ our own security guards.
They are contracted through a 3rd party named G4S and we do not control the terms of these negotiations. I would like to point out, however, that we have continued the support of the work of our contracted security guard services in the state of Connecticut. And this is in spite of the fact that most of our workforce is at home today. So we have maintained full employment for them as well as our maintenance and cafeteria workers across the country to the best of our ability. So, for example, just to close this out, the work contract by security guards at our UHG office in Hartford has continued during this outbreak, and we appreciate their service to our company during this time.
Thank you.
The next question is what is the fee arrangement the company has with AARP for endorsement of Medicare plans? Is it a fixed amount or depend on the number of policies? Has this arrangement been profitable for the company?
We maintain it's Dave Lichtman again. We maintain a long standing and very collaborative relationship with AARP. Obviously, they are a very highly trusted source of information and engagement among seniors broadly. We do have a collaboration with them across our Medicare products. Some of those arrangements are fixed in the orientation, meaning it doesn't matter how much business is sold.
And then the others vary based upon the volume of business that is managed. These have been very productive relationships for the company to reach seniors and to be able to have the opportunity to serve their essential healthcare needs, which have become vitally important, particularly during this COVID-nineteen crisis. Thank you for the question.
The next question is for the Chair of our Audit Committee, Glenn Renwick. Operator, if you could work on unmuting Mr. Renwick's line while I ask the question. There is a question on our debt to capital ratio and how the audit committee reviews that measure and the longer term target.
The considerable amount of time looking at the sources and uses of capital and the appropriate composition of that capital. So the debt to total capital ratio is something that we're always very mindful of. We have a longer term general target versus a specific absolute and there are times where we have gone above that. Catamaran, for example, would be a situation and in some of the more recent situations to ensure the capital position of the company is really strong. We have done so, but typically we'll always to come back to the comfortable target of around about 40% on any long term basis.
So you can expect the capital of the company to always be strong, never be overly indebted and very, very carefully washed by the audit committee.
The next question is how is the current regional and national civil unrest impacting your operations and level of service to policyholders?
Thank you for the question, Dave Wicksand again. There has been no disruption to service to policyholders. As our shareholders know, we maintain a very diverse business across multiple lines of business, but also across many geographies. And we are able to transition services on a pretty readily available basis across the country. With respect to the what has been disrupted, we have here in the Minneapolis market, which is where we're at today, Minneapolis St.
Paul, we've had several of our pharmacies that serve the nation's most vulnerable in community mental health clinics and or federally qualified health centers be disrupted. Pharmacies have been the target of some of the civil unrest for a wide variety of reasons, one to obtain cash, but also to loot drugs. The other place I'd suggest we've had some disruption over the weekend is in certain of our urgent care centers. And again, healthcare delivery in these kinds of settings has been targeted for the same reasons I described around the pharmacies. Fortunately, we're able to keep the vast majority of these open and to redirect our patients to alternative sources of care and places to pick up their medication.
So we've seen very little, if any, disruption overall. Thank you for the question.
The next question is when was the last in person Board meeting?
It's Dave again. It was February 2020.
And our final question is how many shareholders logged into today's meeting? 62 would be the answer. So that being all of our questions, based on the tabulation of all of the proxies received as of the opening of the polls at today's meeting, the Inspector of Election preliminarily reports the following. The total number of shares of common stock represented by proxy at this meeting was 858,000,440 5,922 shares. The director nominees named in the proxy statement have been duly elected.
The company's executive compensation has received advisory approval from the shareholders. The appointment of Deloitte and Touche LLP as the independent registered public accounting firm for the company for the fiscal year ending December 31, 2020 has been ratified. The UnitedHealth Group 2020 Stock Incentive Plan has been approved. The shareholder proposal did not pass. The final report of the Inspector of Election with the final tabulation will be filed with the records of this meeting and the final results will be reported in a Form 8 ks by Friday, June 5, 2020.
There being no further business to come before the meeting, in accordance with the company's bylaws, the 2020 Annual Meeting of Shareholders is now concluded and I hereby declare the formal portion of the 2020 Annual Meeting of Shareholders adjourned. Now Dave Wickman will talk with you about our business. I would like to remind you portions of Dave's remarks, which are not historical in nature, may be forward looking statements made under the protection of the Private Securities Litigation Reform Act. Our actual results may differ materially from those statements and the factors that could cause the results to differ materially can be found in the cautionary statements section of our 10 ks and 10 Qs.
Thank you, Danette. And I'd like to thank all of you for joining us today. We appreciate your questions and the confidence you've placed in our team. We're honored that you've entrusted us to be responsible stewards of your capital and we recognize that our company's enduring success is only possible because of you. Yet as I look what's unfolded over these last several months, that success was by no means a foregone conclusion.
COVID-nineteen has profoundly affected millions of lives around the world. It strained our health systems, disrupted our global economy and dramatically changed daily life. But our mission is to help people live healthier lives and to help make the health system work better for everyone. And that mission matters now more than ever. Before COVID-nineteen, we talked about the restless mindset that drives us to constantly innovate and improve.
So it should come as no surprise that in this crisis, our team responded to the adversity in the most prolific way with unprecedented urgency, agility, innovation and a restless determination to serve. Today, nearly 100,000 of our doctors, nurses, pharmacists, social workers and other clinical staff are serving on the front lines. Behind them is an even larger non clinical team working tirelessly to support their every need and the needs of the people we serve. Our mission driven culture is rooted in the practice of servant leadership, blending your time and your talents in any way you can. There are countless examples of our people doing that every day.
People like Connie Demery, a trained nurse who stepped away from her day job as a clinical auditor to care for worried members calling on to our nurse line. For Doctor. Paul Banach, a leader on our appeals team who traveled to New York City to care for the most seriously ill COVID-nineteen patients at the epicenter of the crisis or Doctor. Jeffrey Brenner, one of our doctors, is running field operations in New Jersey serving COVID-nineteen patients. Our Andrew Witty, our UnitedHealth Group President and Optum's CEO, who is now co leading the World Health Organization's efforts to develop a vaccine for the global community or Kathy Lundy, a sourcing expert who sews face masks at home.
I'm not a nurse or a doctor, Lundy told her local newspaper. It's one of our core beliefs at UnitedHealth Group that we serve the community in whatever way we can. While these individuals' actions are inspiring, our entire organization is singularly focused on this challenge. Since the onset of the crisis, we've eliminated barriers to excess care, waiving all cost sharing for COVID-nineteen diagnosis and treatment. We enabled telehealth visits at no cost, removed prior authorizations and opened our mental health app and emotional support lines to everyone for free.
We prioritize care for seniors and other vulnerable populations, coordinating access to medicine, nutrition and transportation for those who are confined to their homes. We provided $1,500,000,000 in premium and cost relief to customers and consumers in UnitedHealthcare's commercial, Medicare and Medicaid businesses. We quickly mobilized $2,000,000,000 in liquidity relief for the nation's health system and we have invested $100,000,000 to support the care workforce to combat homelessness, to address food insecurity and to help the most heavily impacted communities. With respect to care delivery, we've redeployed more than 10,000 physicians to serve patients through telehealth, keeping people aligned to their critical care protocols. Our R and D teams have developed safer and more effective diagnostic testing protocols, designed new protocols and processes and technologies with HCA, Quest, LabCorp and Microsoft to keep America's health workforce safe and to provide safe opening for our economy.
Led breakthrough clinical research with partners like Yale School of Medicine and University of Pennsylvania. And we'll soon sponsor and help co lead certified drug trials for treatment and cure. We funded promising new treatment research led by Mayo Clinic and worked with device manufacturers to develop new ventilator technology. And we're forging new public private partnerships from helping to administer the $100,000,000,000 in federal relief funds for providers to working with state and local leaders to provide testing in underserved communities. While our government customers sought our services because of our deep expertise technological capabilities, we have committed to not requesting or accepting any government assistance.
At some point, this crisis will end, but I can assure you our relentless pursuit of our mission and servant led culture will not. I am confident UnitedHealth Group will emerge from this moment an even stronger company. For 46 years, our company has prospered no matter what the environment. Though our challenge today is different, I have great confidence in our future because our Restless team has always found new ways to adapt, innovate and evolve. Because we've never lost sight of our mission, because we understand the opportunity in front of us to build the next generation health system in a socially conscious way, serving 1 person, 1 health system at a time.
And we will relentlessly pursue that ambition. Thank you for being with us today and thank you for your continued confidence in UnitedHealth Group.