Nation & World

New Herbalife CEO likely to be one of co-presidents

Reasons for Rick Goudis stepping down unclear

Bloomberg

Michael Johnson, chairman of Herbalife, is interim CEO of the company.
Bloomberg Michael Johnson, chairman of Herbalife, is interim CEO of the company.

Herbalife Nutrition, the company still operating under federal oversight, said CEO Rich Goudis resigned for comments he made before taking the top job that go against company policy.

Goudis, who became chief executive in June 2017 after a long stint at the company, will be replaced on an interim basis by Chairman Michael Johnson, who also had served as CEO before Goudis.

The board expects a permanent replacement to come from the company’s current leadership team, and Pivotal Research Group analyst Timothy Ramey said it’s likely that one of its two co-presidents will get the job.

The reasons given for the resignation were vague, with Herbalife saying that Goudis made comments, which recently came to light, that were “contrary” to its “expense-related policies and business practices.”

The comments, which “do not reflect the company’s culture,” were made before he took over as CEO, and his departure “is not due to any issues regarding the company’s financial reporting.”

Goudis couldn’t be reached for comment.

The dismissal comes after Herbalife spent years fighting off short sellers and endured a probe by the Federal Trade Commission tied to allegations that it’s a pyramid scheme.

That investigation ended with a settlement and the company — which sells weight-loss shakes and other items through millions of independent sellers — having to meet new guidelines set by the regulator.

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Herbalife is also being investigated by the Securities and Exchange Commission and Justice Department for alleged corruption in China. The probe, disclosed in January 2017, is focused on entertainment and gift expenditures.

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