Herbalife CEO Rich Goudis leaves abruptly

  • Push-out Score determined
  • After less than two years in the position
  • Michael Johnson taking over in the interim
  • Search for a successor

(exechange) — Los Angeles, California, January 8, 2019 — Rich Goudis, chief executive of Herbalife, leaves. It is an abrupt change. As announced by Herbalife Nutrition Ltd. in a news release and in a regulatory filing published on Tuesday, January 8, 2019, Richard P. (Rich) Goudis leaves his post as Chief Executive Officer at the nutrition company after less than two years in the role, effective immediately.

No company wants a CEO to flame out in the first years.

Among the 3,000 largest publicly held companies incorporated in the U.S. based on market capitalization, the average tenure of the CEOs who departed over the past 12 months was 8.7 years, according to data compiled by exechange. Only 14 percent of the CEOs who departed over the past 12 months left the position within two years, and 23 percent left the position within three years.

Herbalife will undertake a search for a successor.

Rich Goudis’s duties will be taken over in the interim by Michael O. Johnson, most recently Executive Chairman of Herbalife Nutrition Ltd., as interim Chief Executive Officer.

“Comments … that are contrary to the Company’s expense-related policies and business practices”

Rich Goudis’s sudden departure from the CEO post is explained as follows. Herbalife said: “Mr. Goudis’ departure is not due to any issues regarding the Company’s financial reporting, but pertains to comments which recently came to light, made by Mr. Goudis prior to his role as CEO, that are contrary to the Company’s expense-related policies and business practices. The comments made were inconsistent with Herbalife Nutrition’s standards and do not reflect the Company’s culture.”

Precise information regarding Rich Goudis’s future plans was not immediately available.

“Resignation”

Herbalife said: “The Board of Directors of Herbalife Nutrition Ltd. … announced today that effective immediately, Michael O. Johnson, the Company’s Executive Chairman, who led Herbalife Nutrition Ltd. … as its Chief Executive Officer from 2003 to 2017, will reassume the role of Chief Executive Officer on an interim basis following the resignation of current CEO Richard Goudis.”

Herbalife further said: “Effective as of January 8, 2019 …, Richard P. Goudis voluntarily resigned as the Chief Executive Officer of the Company.”

Share price increase since December 2017

The management change announcement follows an increase in Herbalife Nutrition Ltd.’s share price of 58 percent since December 2017.

In the position of CEO since 2017

Richard Goudis was Chief Executive Officer of the Company and has held this position since June 2017.

Prior to June 2017, Goudis was the Chief Operating Officer of the Company and held such position since January 2010.

Goudis joined the Company in June 2004 as Chief Financial Officer after serving as the Chief Operating Officer, from 1998 to 2001, of Rexall Sundown, Inc., or Rexall, a multinational manufacturer and distributor of nutritional supplements and sports nutrition products and a Nasdaq 100 company that was sold to Royal Numico in 2000.

After the sale to Royal Numico, Goudis had operations responsibility for all of Royal Numico’s U.S. investments, including General Nutrition Centers, or GNC, Unicity International and Rexall.

From 2002 to May 2004, Goudis was a partner at Flamingo Capital Partners, a firm he founded in 2002.

Goudis also previously worked at Sunbeam Corporation and Pratt & Whitney.

Goudis graduated from the University of Massachusetts with a degree in Accounting and he received his Master in Business Administration from Nova Southeastern University.

At the time of Rich Goudis’s appointment as Chief Executive Officer at Herbalife, Executive Chairman Michael O. Johnson, had said: “The Board and I could not have picked a more qualified candidate to lead this Company forward, we look forward to supporting him as he leads Herbalife Nutrition well into the future.”

Push-out Score determined

The Push-out Score™ determined by exechange gauges the likelihood that a manager was pushed out or felt pressure to leave the position.

exechange reached out to Herbalife and offered the company the opportunity to comment on the score.

Read the full story in the exechange report 2.2019 ($).