After 13 Years at Helm, Herbalife CEO to Step Down

Herbalife’s announcement of a change in CEO coincided with the release of its third-quarter results, demonstrating just how large the nutrition company has become under its chief executive.

Josh Long, Associate editorial director, Natural Products Insider

November 2, 2016

2 Min Read
After 13 Years at Helm, Herbalife CEO to Step Down

Michael O. Johnson, the CEO of Herbalife Ltd., is stepping down next year after quadrupling sales over his 13-year tenure and reaching a widely publicized agreement with federal regulators in 2016 to change the marketer’s business practices. Effective June 1, 2017, he will transition to the role of executive chairman.

Johnson’s successor is Herbalife Chief Operating Officer Richard P. Goudis, who has overseen various operations, including human resources, global manufacturing and product development.

Herbalife’s announcement coincided with the release of its third-quarter results, demonstrating just how large the 36-year-old nutrition company has become under Johnson, a fitness buff who spent 17 years with The Walt Disney Co. before joining Herbalife. For the three-month period that ended Sept. 30, the Los Angeles-based company reported net income of US$87.7 million, or $1.01 per diluted share, on net sales of $1.12 billion.

"Over the past 13 years, Michael's incredible vision, leadership and passion for Herbalife Nutrition's mission have strengthened the company's global leadership, expanding our positive impact on the health and wellness of millions of people in more than 90 countries," said Jeffrey T. Dunn, lead independent director of Herbalife Nutrition's board of directors, in a statement. "Michael has skillfully led the company through a period of significant expansion, quadrupling annual net sales from $1.1 billion to $4.5 billion over the course of his tenure and deepening relationships with distributors and customers around the world."

In a regulatory filing reporting its third-quarter results, Herbalife cited as the predominant reasons for its success the relevance of its products in light of a worldwide obesity epidemic, the effectiveness of its distribution network, and its geographic expansion.

The company is one of the largest multilevel marketers in the world, but its success hasn’t been universally praised. Since late 2012, Herbalife—and Johnson—have labored to refute accusations that the company is a fraudulent pyramid scheme destined to collapse. The predictions by Herbalife’s chief adversary—billionaire Bill Ackman of the hedge fund Pershing Square Capital Management—haven’t come to pass.

Three months ago, however, Herbalife announced an agreement with the government to pay $200 million and restructure its U.S. business. Under an FTC consent decree that became effective on July 25, Herbalife must implement the majority of changes to its business within 10 months, leaving its critics to question the long-term viability or success of the company.

In a written statement in July, Johnson described the FTC settlement—and a separate agreement with the Illinois Attorney General—as “an acknowledgment that our business model is sound," and he said the agreements highlighted the company’s confidence in its “ability to move forward successfully."



About the Author(s)

Josh Long

Associate editorial director, Natural Products Insider, Informa Markets Health and Nutrition

Josh Long directs the online news, feature and op-ed coverage at Natural Products Insider, which targets the health and wellness industry. He has been reporting on developments in the dietary supplement industry for over a decade, with a focus on regulatory issues, including at the Food and Drug Administration.

He has moderated and/or presented at industry trade shows, including SupplySide East, SupplySide West, Natural Products Expo West, NBJ Summit and the annual Dietary Supplement Regulatory Summit.

Connect with Josh on LinkedIn and ping him with story ideas at [email protected]

Education and previous experience

Josh majored in journalism and graduated from Arizona State University the same year "Jake the Snake" Plummer led the Sun Devils to the Rose Bowl against the Ohio State Buckeyes. He also holds a J.D. from the University of Wyoming College of Law, was admitted in 2008 to practice law in the state of Colorado and spent a year clerking for a state district court judge.

Over more than a quarter century, he’s written on various topics for newspapers and business-to-business publications – from the Yavapai in Arizona and a controversial plan for a nuclear-waste incinerator in Idaho to nuanced issues, including FDA enforcement of the Dietary Supplement Health and Education Act of 1994 (DSHEA).

Since the late 1990s, his articles have been published in a variety of media, including but not limited to, the Cape Cod Times (in Massachusetts), Sedona Red Rock News (in Arizona), Denver Post (in Colorado), Casper Star-Tribune (in Wyoming), now-defunct Jackson Hole Guide (in Wyoming), Colorado Lawyer (published by the Colorado Bar Association) and Nutrition Business Journal.

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