Coverage: Herbalife CEO quits after comments discovered
Herbalife Nutrition Ltd.’s chief executive resigned after the company said it discovered comments he made prior to becoming CEO that were inconsistent with its standards.
Patrick Thomas of The Wall Street Journal had the story:
The nutritional-supplement company said CEO Richard Goudis, who assumed the post in June 2017, resigned Tuesday. Prior to becoming CEO, Mr. Goudis was the company’s operating chief for seven years.
Michael Johnson, who served as the company’s CEO from 2003 until Mr. Goudis’s tenure started, will take over on an interim basis, Herbalife said. The company said its board would select the permanent CEO from its current senior leadership team.
The Los Angeles company said Mr. Goudis’s departure relates to comments he made that were contrary to Herbalife’s expense-related policies and business practices and inconsistent with its culture. Herbalife declined comment beyond its news release and a securities filing.
Mr. Goudis didn’t respond to requests for comment.
Claudia Assis of MarketWatch.com reported that Johnson oversaw the company during a tumultuous time:
Johnson, who served as CEO from 2003 to 2017, including the period in which the company faced intense criticism from hedge-fund manager Bill Ackman, will be an interim CEO, Herbalife said. To ensure “an effective and orderly transition to a permanent CEO,” Herbalife’s board expects to select the permanent CEO from the company’s “proven” senior executive team, the company said. The company reiterated its initial full-year 2019 guidance as announced on Oct. 30, “thereby demonstrating the company’s consistent and continued confidence in the business moving forward,” Herbalife said. At that time, Herbalife said it expected adjusted per-share earnings between $2.70 and $3.10 for the 12 months ending December 2019, and currency-adjusted net sales growth between 5% and 9% versus 2018. Shares of Herbalife were flat in the extended session after ending the regular trading day down 0.7%.
Tom Bemis of TheStreet.com reported that the stock fell in after-hours trading:
Shares of Herbalife fell in after-hours trading Tuesday after the company’s board said CEO Richard Goudis had resigned.
Shares of the nutritional supplement marketer lost 2.4% to $57 in after-market trading.
Goudis, who was named CEO in June of 2017, resigned because of “comments which recently came to light, made by Mr. Goudis prior to his role as CEO, that are contrary to the Company’s expense-related policies and business practices,” Herbalife said in a statement.
The company’s executive chairman, Michael O. Johnson, was named interim CEO. The company said it expects to choose a new CEO from within its senior leadership.