Bloomberg News

Herbalife CEO Compensation Falls to $10.3 Million in 2012

April 03, 2013

Herbalife Ltd. (HLF:US) said Chairman and Chief Executive Officer Michael Johnson was paid compensation of $10.3 million in 2012, a drop from the previous year when his pay was inflated by the value of stock awards.

Johnson was paid a salary of $1.24 million, an increase of 0.5 percent from 2011, and received options valued at $5 million and incentive compensation of $3.71 million, the Cayman Islands- based nutrition company said in a proxy filing today. Johnson achieved the maximum award for compensation linked to earnings per share and sales volume in the year, according to the filing.

“Numbers speak for themselves,” Michael Swartz, an analyst with SunTrust Robinson Humphrey Inc. in Atlanta, said today in an e-mail. “They blew away their EPS, volume points and operating income targets for the year and were compensated accordingly,” said Swartz, who has a buy rating on the stock.

The company also reiterated that Jonathan Christodoro and Keith Cozza, two associates of billionaire Carl Icahn, are nominated for election to its board at its annual shareholder meeting on April 25. Icahn had a stake of 15.6 percent as of March 6, according to the filing, and has said he will seek talks with the company about strategic alternatives, including taking it private.

His stake pits him against rival hedge fund manager Bill Ackman, who has sold short 20 million shares of the company and argued that its multi-level marketing structure is a pyramid scheme that regulators should shut down.

Herbalife’s 2012 earnings per share increased by 121 percent to $4.05 a share, while its so-called volume point growth, a measure of sales performance, increased 222 percent. Both measures exceeded targets set by the company.

In 2011, Johnson’s total compensation was $24.6 million, boosted by an additional stock award valued at $15 million that will take three years to vest provided certain targets are met.

Herbalife rose 2.6 percent to $39.01 at the close in New York. The shares (HLF:US) have risen 18 percent this year, compared with an 8.9 percent gain for the Standard & Poor’s 500 Index.

To contact the reporter on this story: Duane D. Stanford in Atlanta at dstanford2@bloomberg.net

To contact the editor responsible for this story: Kevin Orland at korland@bloomberg.net


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Companies Mentioned

  • HLF
    (Herbalife Ltd)
    • $52.81 USD
    • 5.70
    • 10.79%
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