Michael O. Johnson
HERBALIFEAbout Michael O. Johnson
Michael O. Johnson is Herbalife’s Chairman and Chief Executive Officer (CEO), age 70, and will transition to Executive Chairman effective May 1, 2025 . He rejoined as Chairman and interim CEO in October 2022, became CEO in December 2022, and previously served as CEO (2003–2017; 2019–2020), Executive Chairman (2017–2019), and Chairman (2007–2020), bringing unparalleled institutional knowledge and prior senior leadership at The Walt Disney Company (17 years) . Education: BA in Political Science from Western Colorado University . 2024 performance: net sales $5.0B (-1.4% YoY), adjusted EBITDA $634.8M with 12.7% margin (+140 bps), leverage ratio reduced to 3.2x from 3.9x; net income $254.3M and operating income (for bonus purposes) $502.1M; TSR (value of $100 investment) was $14.03 vs peer group $114.10 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Herbalife Ltd. | Chairman and CEO; Executive Chairman; Chairman; CEO | Chairman since Oct 2022; CEO since Dec 2022; Exec Chair 2017–2019; Chairman 2007–2020; CEO 2003–2017 and 2019–2020 | Led multiple cycles and international expansions; deep distributor network expertise |
| The Walt Disney Company | President, Walt Disney International; President, Asia Pacific; President, Buena Vista Home Entertainment | 17 years (prior to joining Herbalife) | Global sales/marketing leadership and government engagement experience |
| Warner Amex Satellite Entertainment Co. | Directed regional sales for MTV, Nickelodeon, The Movie Channel | Not disclosed | Scaled media channel distribution and sales |
| Audio Times magazine | Publisher | Not disclosed | Media operations and content leadership |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Univision Communications, Inc. | Director | Until March 2007 | Media governance experience |
| Loyola High School of Los Angeles | Board of Regents | Not disclosed | Educational institution oversight |
| Public company boards (current) | None | — | No current public boards |
| Herbalife Ltd. | Director | April 2003–April 2020 | Prior board service before rejoining in 2022 |
Fixed Compensation
Multi-year CEO compensation (Summary Compensation Table):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 1 | 1 | 1,230,769 |
| Stock Awards ($) | 5,134,987 | — | 4,684,643 |
| Option/SAR Awards ($) | 5,000,000 | — | 3,999,996 |
| Non-Equity Incentive (Annual Bonus) ($) | — | 684,657 | 2,762,155 |
| All Other Compensation ($) | 204,030 | 341,907 | 529,956 |
| Total ($) | 10,339,018 | 1,276,565 | 13,207,519 |
2024 base salary was set at $1,280,000; target bonus 150% of salary ($1,920,000) .
Performance Compensation
2024 Annual Incentive Plan (Company-wide metrics; CEO target bonus $1,920,000):
| Metric | Weighting | Target | Actual | Results vs Target | Payout (% of Target) | Weighted Payout |
|---|---|---|---|---|---|---|
| Operating Income (millions) | 50% | $351.213 | $502.107 (adjusted) | 143.0% | 200.0% | 100.0% |
| Local Currency Net Sales (millions) | 50% | $5,207.775 | $5,079.919 | 97.5% | 87.7% | 43.9% |
| Total Payout | — | — | — | — | — | 143.9% |
2022 PSU outcomes (three-year performance period 2022–2024; NEOs other than Johnson and Gratziani received PSUs; payout 0%):
| Metric | Weighting | Criteria Range | Actual Achievement | Actual % Achievement | Actual % Payout |
|---|---|---|---|---|---|
| Local Currency Net Sales (billions) | 50% | <$16.16 – $22.82 | $16.050 | 84.4% | 0% |
| Adjusted EBIT (billions) | 50% | <$1.91 – $2.81 | $1.741 | 77.5% | 0% |
| Total Payout | — | — | — | — | 0% |
2025 design change: reintroducing PSUs as 50% of long-term incentive value; SARs/RSUs remain components to balance retention and shareholder alignment .
Equity Ownership & Alignment
- Beneficial ownership: 705,784 shares; less than 1% of outstanding shares (101,341,321 as of Feb 25, 2025) .
- Stock ownership guidelines: CEO encouraged to hold common shares plus unvested RSUs equal to 5x base salary; all current NEOs are in compliance (other than President Gratziani who has until Jan 2029) .
- Anti-hedging and anti-pledging: company policy prohibits hedging and pledging of company shares by executives and directors; Rule 10b5‑1 trading plans encouraged for sales/exercises .
Outstanding equity awards (as of Dec 31, 2024):
| Grant Date | Type | Exercisable (#) | Unexercised/Unvested (#) | Exercise Price ($) | Expiration | Notes |
|---|---|---|---|---|---|---|
| 12/22/2022 | SARs | 783,699 | — | 14.45 | 12/22/2032 | Fully vested by 12/31/2024 |
| 02/16/2024 | SARs | — | 982,800 | 8.07 | 02/16/2034 | Vests 50% at 1-year, 50% at 2-year |
| 02/16/2024 | RSUs | — | 495,662 | — | — | Vests 50% at 1-year, 50% at 2-year |
| 2024 Vesting | Stock awards vested | — | 257,849 shares vested | — | — | Value realized $1,805,756 |
Employment Terms
- 2025 CEO Agreement: base salary $1,280,000; target annual bonus $1,920,000 (max 200% of target); equity awards $8,000,000 grant-date fair value mirroring EVP mix; vesting 50% on first anniversary of grant and 50% at the 2026 Annual General Meeting; SARs 10-year term; PSUs tied to cumulative goals for FY2025–2026 .
- Transition to Executive Chairman effective May 1, 2025: salary $740,741; target bonus 125% of base salary; remains eligible for $8,000,000 equity awards (allocated for CEO service through May 1, 2025 and Executive Chairman service thereafter) .
- Severance/change-in-control: Johnson is not eligible under the Executive Officer Severance Plan; equity acceleration provisions include pro-rata vesting upon termination without cause, acceleration if a new non-interim CEO is appointed in 2025, and change-in-control acceleration per Section 15(c) of the 2023 Plan (double-trigger structure for RSUs/PSUs under 2023/2024 awards) .
- Clawback: Rule 10D‑1-compliant clawback covering excess cash and equity incentive compensation upon financial restatement; 2023 Plan awards subject to clawback .
- Perquisites: personal aircraft usage allowance up to $500,000 in 2025; 2024 personal aircraft use cost reported at $529,272; life insurance premiums $684 included in “All Other Compensation” .
- No excise tax gross-ups; no supplemental retirement benefits; no repricing/backdating of equity awards; anti-hedging/anti-pledging strictly enforced .
Board Governance
- Board service: Director since April 2022; Chairman since October 2022; currently combined Chair and CEO (Lead Independent Director structure in place) .
- Independence: Johnson is not independent due to his CEO role (NYSE standards) .
- Committees: Board committees (Audit, Compensation, Nominating & Corporate Governance, ESG) are fully independent or chaired by independents; Johnson is not listed on any committee .
- Board leadership and oversight: combined Chair/CEO balanced by a robust Lead Director role with authority over agendas, executive sessions, liaison duties, and shareholder engagement .
- Attendance: Board held seven meetings in FY2024; all directors attended at least 75% of meetings and the 2024 AGM; independent directors met in executive session at each regular meeting .
Director Compensation
- Non-management director compensation includes cash retainers and annual RSU grants ($150,000; Lead Director additional $25,000 RSUs); Michael O. Johnson’s compensation is covered under executive compensation and excluded from the director compensation table .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑Pay approval: approximately 95.9% votes cast in favor at the 2024 AGM, indicating strong support for the pay-for-performance design .
- Shareholder outreach: engagement with holders representing ~13% of outstanding shares to gather governance feedback; robust stock ownership guidelines apply to directors and NEOs (CEO 5x salary) .
Compensation Peer Group
- Peer group used for 2024 decisions emphasized U.S.-based consumer product companies with international scope; median revenue and market cap at $5.4B each, broadly comparable to Herbalife; Tupperware Brands removed for 2025 decisions .
Equity Ownership & Alignment Table (Beneficial Ownership Snapshot)
| Holder | Shares Beneficially Owned | % of Outstanding |
|---|---|---|
| Michael O. Johnson | 705,784 | Less than 1% |
Risk Indicators & Red Flags
- Dual role (Chairman + CEO) mitigated by strong Lead Director framework, but still an independence consideration; Johnson is explicitly non-independent per NYSE .
- Pay ratio: CEO 2024 compensation ~345x median employee ($38,313) .
- Strong clawback, anti-hedging/anti-pledging, and no repricing/gross‑ups policies reduce shareholder‑unfriendly practices .
- PSU discipline: 2022 PSU cycle vested at 0% due to under‑threshold performance, evidencing rigor in performance equity .
Investment Implications
- Alignment: Large equity awards ($8M grant value) with SARs/RSUs and reintroduced PSUs for 2025–2026 tie outcomes to share price and multi‑year goals; anti‑hedging/pledging policies preserve alignment with long‑term shareholders .
- Near‑term vesting calendar: 2024 RSUs and SARs vesting on 1‑ and 2‑year anniversaries and the 2026 AGM may create mechanical selling windows; use of 10b5‑1 plans and ownership guidelines limit discretionary selling pressure .
- Retention risk: Johnson is excluded from the Severance Plan; retention is primarily via equity vesting and role transition economics; equity acceleration is pro‑rata on certain terminations and accelerated on change‑in‑control (double trigger), balancing retention with shareholder protections .
- Governance: Combined Chair/CEO structure warrants monitoring; however, independent committees, executive sessions, and a strong Lead Director reduce oversight risk; high Say‑on‑Pay support suggests investor acceptance of design .