UnitedHealth Group has an unusual new CEO pay package

The giant healthcare concern has seen an unprecedented loss of value recently. UHG is America’s largest healthcare company, No. 3 on the Fortune 500, but in April it reported a surprisingly terrible first-quarter performance. The stock price plunged, then kept plunging for weeks. CEO Andrew Witty resigned abruptly for unspecified personal reasons, and the board chairman, Stephen Hemsley, took over as CEO.

Hemsley, who turns 73 in June, will be trying to rescue the colossus he helped build as CEO from 2006 to 2017. While investors might have expected he would hold the job only until a new CEO is found, Hemsley and the board have other ideas. The highly unusual pay package they created for him shows how.

He will get a base salary of $1 million a year—big money but actually below the usual salary for CEOs of such large companies. More importantly, he would get a one-time $60 million grant of stock options, with a twist: He would get the payoff only if he remains CEO for three years. He would get no other stock-based awards in that period.

Shareholders will get to vote on that unconventional pay plan at UHG’s June 2 annual meeting. Institutional Shareholder Services (ISS), the largest firm that advises major shareholders on how to vote, advises they vote No. They cite a lack of performance criteria and the fact that the stock is so beaten down he might get a windfall for a mere share price rebound.

UHG struck back, sending shareholders an explanation of what ISS allegedly missed and why they should vote for Hemsley’s pay package. Bottom line, Hemsley and UHG will probably get the pay package they negotiated. ISS’s recommendations are taken seriously, but shareholders usually vote in favor of management.

Even if UHG loses the vote, which companies must hold by law, the result is non-binding and advisory only; the board of directors could simply ignore the shareholders’ wishes. In addition, UHG notes that ISS’s main competitor, Glass Lewis, is recommending shareholders vote in favor of Hemsley’s pay package. 

Regardless of the outcome, the contested vote will be significant. It will raise the already high stakes for UHG, its directors, and for Hemsley.

More news below.

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

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Correction: Yesterday’s edition of CEO Daily inaccurately stated that Macy’s, as part of its Reimagine 125 strategy, is closing all of its stores besides the 125 most popular locations. The company is closing some locations but will have 350 stores once the Reimagine 125 campaign is over.

CEO Daily is compiled and edited by Joey Abrams and Ian Mount.