By Jim Puzzanghera / Los Angeles Times
Herbalife’s chief executive has resigned over unspecified comments he made before taking leadership of the Los Angeles supplement maker.
Richard Goudis, who became chief executive in June 2017 after having served as chief operating officer, will be replaced on an interim basis by the company’s former chief executive, Michael O. Johnson, Herbalife said in a news release Tuesday.
Johnson, the company’s executive chairman, will take over immediately, and the board expects to find a permanent successor from among Herbalife’s senior leadership.
The sudden leadership change comes as Herbalife has tried to move past controversies over its business practices, fueled by allegations from activist investor Bill Ackman.
Herbalife said in the news release that Goudis’ departure was “not due to any issues regarding the company’s financial reporting, but pertains to comments which recently came to light” that he had made before taking over as chief executive “that are contrary to the company’s expense-related policies and business practices.”
Herbalife also said that the comments “were inconsistent with Herbalife Nutrition’s standards and do not reflect the company’s culture.”
The company provided no additional information about the comments. Goudis has been an executive at Herbalife since 2004, first as chief financial officer and then from 2010-17 as chief operating officer.
Johnson served as chief executive from 2003-17, guiding Herbalife through a Federal Trade Commission investigation that stemmed from allegations by Ackman in 2012 that the company was operating a pyramid scheme.
Ackman’s hedge fund had bet $1 billion that Herbalife’s stock would plummet. Shares were up 44 cents, or less than 1 percent, to $58.83 in early trading Wednesday.
In 2016, Herbalife agreed to pay $200 million to settle FTC claims that the company misled people into becoming distributors for its weight-loss shakes, protein powders and other products by telling them they could get rich quickly.
Herbalife also agreed to change its business practices as part of the settlement. Separately, the company agreed to pay $3 million to settle an investigation by the Illinois attorney general’s office.
Last February, Ackman gave up most of his investment position in Herbalife.