Stephan Gratziani
HERBALIFEAbout Stephan Gratziani
Stephan Paulo Gratziani (age 56) became Herbalife’s President in January 2024 after serving as Chief Strategy Officer (Aug 2023–Jan 2024) and as a director (Apr–Aug 2023); he was an independent Herbalife distributor for 32 years, expanding to 70 markets and reaching Chairman’s Club (2010) and Founder’s Circle (2018), with recognition as a top-3 global distributor in 2022 . On Feb 13, 2025, he was appointed CEO effective May 1, 2025, and has articulated a modernization agenda merging Herbalife’s distributor network with health-tech initiatives (Pro2col platform), while delivering net sales growth on a constant currency basis in FY 2024 (+1.2%) and expanding adjusted EBITDA margin to 12.7% (+140 bps) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Herbalife Ltd. | Chief Executive Officer | Effective May 1, 2025 | CEO mandate to modernize direct selling via digital health platform; reintroducing PSUs in LTI mix |
| Herbalife Ltd. | President | Jan 2024–Apr 2025 | Led Diamond Development Mastermind rollout; strengthened distributor engagement; helped deliver constant-currency growth and margin improvement |
| Herbalife Ltd. | Chief Strategy Officer | Aug 2023–Jan 2024 | Strategy leadership pre-CEO; supported transformation initiatives |
| Herbalife Ltd. | Director | Apr–Aug 2023 | Board service prior to executive appointment |
| Herbalife Independent Distributorship | Founder/Leader | ~32 years | Built top global distributorship spanning 70 markets; Chairman’s Club 2010; Founder’s Circle 2018; top-3 global distributor in 2022 |
External Roles
No external public company board roles are disclosed for Gratziani in Herbalife’s executive officer biography section .
Fixed Compensation
| Metric | 2023 | 2024 | Notes |
|---|---|---|---|
| Base Salary ($) | $227,077 (partial-year as CSO) | $650,000 (increased from $615,000 effective Jan 2, 2024) | 2023 value appears within director comp footnote itemization |
| Target Bonus (% of Salary) | Not disclosed | 85% post-promotion (prorated target $552,335) | Increased from 80% to 85% upon promotion to President |
| Actual Annual Bonus ($) | Not disclosed | $794,601 (non‑equity incentive plan compensation) | Driven by plan payout results (see next section) |
| Other Compensation ($) | $9,753,986 consideration for suspending distributorship (cash $4,753,994 + SARs grant $4,999,992) | $1,017,934 (includes life insurance $684, 401(k) match $17,250, $1,000,000 payment for distributorship suspension) | Suspension arrangement to avoid distributor conflicts while serving as executive |
2025 CEO terms (effective May 1, 2025):
- Base salary: $1,100,000
- Target annual cash incentive: 150% of base (max 200%)
Performance Compensation
2024 Annual Cash Incentive Design and Outcome (Company-level metrics)
| Metric | Weighting | 2024 Target | 2024 Actual | Results vs Target | Payout (% of Target) | Weighted Payout |
|---|---|---|---|---|---|---|
| Operating Income ($mm) | 50% | $351.213 | $502.107 (adjusted) | 143.0% | 200.0% | 100.0% |
| Local Currency Net Sales ($mm) | 50% | $5,207.775 | $5,079.919 | 97.5% | 87.7% | 43.9% |
| Total Payout | — | — | — | — | — | 143.9% |
Bonus scale mechanics: payouts begin at 50% when Operating Income ≥85% and Local Currency Net Sales ≥90% of target; maximum 200% at ≥110% OI and ≥105% LCN sales; linear interpolation between tiers .
Multi‑Year Performance Context for Bonus Purposes
| Metric | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Operating Income ($mm, adjusted) | 794.9 | 610.5 | 481.6 | 502.1 |
| Local Currency Net Sales ($mm) | 7,098 | 6,379 | 5,801 | 5,080 |
Notes: Adjustments include FX and specific non‑recurring items per footnotes .
Long‑Term Incentive (LTI) Awards – Quantitative Detail
| Grant Date | Instrument | Units | Exercise Price | Expiration | Vesting | Grant-Date Fair Value |
|---|---|---|---|---|---|---|
| 02/16/2024 | SARs | 165,847 | $8.07 | 02/16/2034 | 1/3 annually over 3 years | $674,997 |
| 02/16/2024 | RSUs | 27,881 | — | — | 1/3 annually over 3 years | $225,000 |
| 05/03/2024 | SARs | 349,190 | $9.58 | 05/03/2034 | 1/3 annually over 3 years | $1,724,999 |
| 05/03/2024 | RSUs | 60,020 | — | — | 1/3 annually over 3 years | $574,992 |
| 08/04/2023 | SARs | 235,404 (exercisable) / 235,405 (unearned) | $18.61 | 08/04/2033 | 50/50 annual (for specific awards) or 1/3 annually, per award footnotes | — |
| 11/03/2023 | SARs | 51,622 (exercisable) / 103,245 (unearned) | $13.26 | 11/03/2033 | 1/3 annually over 3 years | — |
| 11/03/2023 | RSUs | 17,597 | — | — | 1/3 annually over 3 years | Market value $117,724 at 12/31/24 |
| 05/03/2024 | RSUs (unvested at 12/31/24) | 60,020 | — | — | 1/3 annually over 3 years | Market value $401,534 at 12/31/24 |
| 02/16/2024 | RSUs (unvested at 12/31/24) | 27,881 | — | — | 1/3 annually over 3 years | Market value $186,524 at 12/31/24 |
2025 CEO LTI mix: $5.6 million prorated award for 2025 (50% PSUs; 25% RCUs; 25% SARs); SARs and RCUs vest in equal annual installments over 3 years; PSUs vest on 3rd anniversary contingent on performance .
Program design note: PSUs were paused in 2023–2024 and reintroduced for 2025 with PSUs comprising 50% of NEO LTI grant value .
Equity Ownership & Alignment
| Ownership Element | Detail |
|---|---|
| Beneficial Ownership | 35,445 Common Shares; less than 1% of outstanding |
| Unvested RSUs (12/31/24) | 17,597 ($117,724), 27,881 ($186,524), 60,020 ($401,534) market value at $6.69 close |
| SARs Status (12/31/24) | Exercisable: 235,404 (8/4/2023 grant); Unexercised/unearned: 235,405 (8/4/2023); plus 51,622/103,245 (11/3/2023); 165,847 (2/16/2024); 349,190 (5/3/2024) |
| Ownership Guidelines | NEOs: 2× base salary; CEO: 5× base salary; refrain from sales until guideline met |
| Compliance Status | As of Record Date, all current NEOs were in compliance except Mr. Gratziani (as President), who had until Jan 2029 to comply |
| Hedging/Pledging | Company prohibits hedging and pledging by employees and directors |
Implication: Multiple three-year vesting schedules (2024 RSUs/SARs) create periodic potential selling windows; anti-hedging/pledging policy mitigates misalignment risk; CEO PSUs shift mix toward performance-contingent equity .
Employment Terms
| Topic | Terms and Triggers |
|---|---|
| Severance Plan | For eligible NEOs (excl. CEO), lump-sum severance equal to 1.0× base salary; pro‑rated annual bonus; release required . As of 12/31/24, amounts: $650,000 (Gratziani as President), $625,000 (Lamberti), $600,000 (Wang), and $2,031 (DeSimone, benefits-only salary) . |
| Change-of-Control | “Double trigger” structure; RSUs vest upon involuntary termination within 24 months post‑CIC or if acquiring entity fails to assume awards; PSUs pay based on performance through Committee‑determined date or target if not determinable . |
| Clawback | SEC/NYSE Rule 10D‑1 compliant; mandatory clawback of excess cash/equity incentive comp for Section 16 officers upon restatement . |
| CEO 2025 Compensation | Salary $1,100,000; target bonus 150% (max 200%); $5.6mm prorated LTI (50% PSUs; 25% restricted cash units; 25% SARs) with SAR/RCU three-year annual vesting; PSU cliff vest at year 3 upon performance . |
| Perquisites | Standard benefits (401(k), life insurance); no excise tax gross‑ups; company permits spousal/partner travel reimbursement; anti‑repricing of equity awards; no below‑market SAR strike prices . |
Performance & Track Record
- FY 2024 delivered net sales of $5.0B (−1.4% YoY; +1.2% on constant currency) and adjusted EBITDA of $634.8mm with 12.7% margin (+140 bps YoY); leverage improved from 3.9× to 3.2× .
- 2025 initiatives under Gratziani include acquisitions of Pro2col Health LLC assets and Link BioSciences (personalized nutrition tech) and Pruvit assets (ketone supplements), plus appointment of Blake Mallen as Chief Strategy Officer; constant-currency net sales growth continued in Q1, with adjusted EBITDA exceeding guidance .
- Q2 and Q3 2025: adjusted EBITDA exceeded guidance; net sales near or above guidance midpoints; North America returned to growth in Q3; Gratziani emphasized momentum from digital platform rollout and product innovation .
Compensation Structure Analysis
- Shift back to PSUs in 2025 increases at‑risk pay tied to multi‑year performance, reducing reliance on time‑based RSUs and SARs used in 2023–2024 .
- Annual bonus plan uses balanced Operating Income and Local Currency Net Sales metrics with caps and thresholds to curb excessive risk taking; 2024 payout at 143.9% of target reflected strong adjusted OI overachievement despite net sales below target .
- No excise tax gross‑ups; no equity repricing; anti‑hedging/pledging policy; robust ownership guidelines and clawback provisions indicate governance discipline .
- Related arrangement: in 2023 Herbalife paid ~$9.75mm (cash + SARs) for suspension of Gratziani’s distributorship upon becoming executive, removing channel conflicts but representing significant guaranteed consideration separate from performance outcomes .
Equity Award Detail – Outstanding and Vesting
| Grant Date | Award | Units | Vesting Mechanics |
|---|---|---|---|
| 08/04/2023 | SARs | 235,404 exercisable; 235,405 unearned; $18.61 strike; 08/04/2033 expire | Per footnotes: annual installments (50/50 or 1/3, depending on grant) |
| 11/03/2023 | SARs | 51,622 exercisable; 103,245 unearned; $13.26 strike; 11/03/2033 expire | 1/3 annually over 3 years |
| 11/03/2023 | RSUs | 17,597 (unvested) market value $117,724 at 12/31/24 | 1/3 annually over 3 years |
| 02/16/2024 | SARs | 165,847; $8.07 strike; 02/16/2034 expire | 1/3 annually over 3 years |
| 02/16/2024 | RSUs | 27,881; market value $186,524 at 12/31/24 | 1/3 annually over 3 years |
| 05/03/2024 | SARs | 349,190; $9.58 strike; 05/03/2034 expire | 1/3 annually over 3 years |
| 05/03/2024 | RSUs | 60,020; market value $401,534 at 12/31/24 | 1/3 annually over 3 years |
| 2025 (CEO) | PSUs/RCUs/SARs | $5.6mm prorated mix: 50% PSUs; 25% RCUs; 25% SARs | SARs/RCUs: equal annual installments over 3 years; PSUs: 3rd‑year cliff with performance |
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑pay received ~95.9% support at the 2024 AGM, indicating strong investor endorsement of program design .
- Herbalife actively engaged shareholders post‑AGM; stock ownership guidelines applied consistently, with defined transition periods for new appointees .
Investment Implications
- Alignment improving: 2025 CEO package emphasizes PSUs (50% of LTI), increasing pay-for-performance rigor; clawback and anti‑hedging/pledging policies strengthen governance .
- Potential selling pressure: multiple time‑vested RSU/SAR installments in 2025–2027 could create periodic liquidity events, though ownership guidelines and role‑based compliance timelines moderate near‑term sales .
- Execution signals: FY 2024 profitability improvement and 2025 quarters exceeding EBITDA guidance under Gratziani’s leadership support confidence in operational discipline; digital and personalized nutrition initiatives (Pro2col/Link Bio/Pruvit) add optionality for growth and margin mix .
- Governance watchpoint: the 2023 distributorship suspension consideration (~$9.75mm) is a notable related arrangement; ongoing transparency and adherence to anti‑conflict policies remain important .
Sources
- 2025 DEF 14A: executive compensation structure, awards, ownership, policies, governance .
- Feb 19, 2025 8‑K and press release: CEO appointment and compensation terms .
- 2025 earnings releases/8‑Ks: Q1 constant‑currency net sales growth and EBITDA exceeding guidance; Q2/Q3 momentum (North America growth in Q3) .