I didn’t see that coming! Michael Johnson’s Nov. 1 announcement that he would step down as CEO of Herbalife next year was a shocker (to me). I’d heard speculation that the FTC might mandate a change at the top as part of its historic settlement this summer, but unless done as a backdoor side deal, that isn’t what happened here. Johnson had insisted –and many journalists and investors believed–he had rescued Herbalife from its sleazy history. The FTC obviously found no evidence that was the case in their exhaustive investigation. I wrote about some of Johnson’s stunning admissions (which I have on videotape) in this story for the NYPost in 2015. Note that he was talking about Richard Goudis, who will become the new CEO next May, as the person he fears sharing a graybar cell with.
Meanwhile, Herbalife’s effort to get real customers is off to a slow start–only about 10% of US distributors have signed up as “preferred customers”, Herbalife told investors , while 80% of sales to such customers are needed to show the FTC that Herbalife has real customers for its products. Sources tell me the company is suggesting distributors turn family members into customers, but if these are “fake” customers, it’s called stacking, and the FTC has already outed that as bad behavior. Stacking is also against Herbalife’s very own rules, though the FTC found evidence it occurs.