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Herbalife quickly and quietly names two new board members

April 25, 2013|By Stuart Pfeifer
  • Troubled nutritional supplement company held a shareholders' meeting that lasted only about 14 minutes.
Troubled nutritional supplement company held a shareholders' meeting… (Mark Boster / Los Angeles…)

Herbalife Ltd. might have had one of the quickest annual meetings of 2013.

The nutritional supplements company, battling a billionaire investor’s bet that its stock will tank, began its yearly gathering of shareholders a few minutes after 9 a.m. in Beverly Hills. It was over 14 minutes later.

The company did not take questions from the audience, which consisted of about 50 people -- most of them Herbalife employees. The board quickly announced the approval of an executive compensation plan for Chief Executive Michael Johnson and five other top executives. The company also announced that an overwhelming majority of shareholders approved five board members, including two new members backed by billionaire investor Carl Icahn.

For several months, two activist investors -- Icahn and Bill Ackman -- have been in a war of words and cash over Herbalife’s future. Ackman has bet $1 billion that the company is a pyramid scheme that will fail, while Icahn bought 15% of Herbalife’s stock.

Herbalife does not allow shareholders to speak during their annual meetings, though it does allow written questions. The only question that was read during the meeting and answered by an executive: What is the company’s plan for hiring a new auditor? KPMG resigned as Herbalife’s auditor and withdrew its approvals on three years’ worth of the company’s financial statements after one of its senior accountants was accused of insider trading.

The head of Herbalife’s audit committee said they are still in the process of finding a new firm, but has no announcement.

Shares of Herbalife fell 5 cents, or 0.13%, to $37.22 in morning trading on the New York Stock Exchange.

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