Herbalife Spent $700,000 Protecting CEO From Threats in 2015by
Herbalife Ltd. spent almost $700,000 last year on security for Chief Executive Officer Michael Johnson, following threats to his well-being after billionaire Bill Ackman began accusing the company of being an illegal pyramid scheme.
Security expenses in 2015 for Johnson, including home services, were $694,000, the company said Monday in a filing. It spent an additional $33,000 on other top executives.
“In 2013, we received information that led us to conclude that there were threats to our company and certain of our executives, and specifically Mr. Johnson,” the company said in the filing. Herbalife has been spending on these services since then, but dollar figures were “inadvertently omitted in the previous two proxy statements.”
Herbalife isn’t alone in spending heavily on protecting top management. Berkshire Hathaway Inc. allocated $370,000 to personal and home security for CEO Warren Buffett last year, according to a filing. Mario Longhi, CEO of U.S. Steel Corp. received $276,000 last year, and security for Steve Wynn, founder and CEO of Wynn Resorts Ltd., totaled $271,000.
Ackman, founder of hedge fund Pershing Square Capital Management, unleashed his campaign to take down Herbalife in December 2012. After placing a $1 billion bet against the company, he called it a fraud that preys on poor people all over the world. Ackman has frequently criticized Johnson directly: He called him a “predator” and head of a “criminal enterprise” during a public presentation in 2014. Ackman’s criticism of Herbalife prompted a probe by the U.S. Federal Trade Commission that is still ongoing.
Herbalife has denied Ackman’s allegations throughout this battle. Last month, it said that it’s in talks with the FTC on a potential resolution.
Herbalife’s shares have been volatile since Ackman began attacking the company, sinking as low as $24.24 and surging to as high as $83.51. The stock climbed 1.1 percent to $57.74 at 10:04 a.m. Tuesday.
Johnson’s total compensation rose to $9.85 million in 2015, including an unchanged base salary of $1.24 million and $5 million worth of stock options. That was up 38 percent from a year earlier.
A representative for Pershing Square declined to comment.