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Herbalife spent US$700,000 protecting its CEO from threats in 2015
[NEW YORK] Herbalife Ltd spent almost US$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 US$694,000, the company said Monday in a filing. It spent an additional US$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."
Mr Ackman, founder of hedge fund Pershing Square Capital Management, unleashed his campaign to take down Herbalife in Dec 2012. After placing a US$1 billion bet against the company, he called it a fraud that preys on poor people all over the world. Mr Ackman has frequently criticized Mr Johnson directly: He called him a "predator" and head of a "criminal enterprise" during a public presentation in 2014. Mr Ackman's criticism of Herbalife prompted a probe by the US Federal Trade Commission that is still ongoing.
Herbalife has denied Mr 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 Mr Ackman began attacking the company, sinking as low as US$24.24 and surging to as high as US$83.51. The shares climbed 0.1 per cent to US$57.10 on Monday.
Mr Johnson's total compensation rose to US$9.85 million in 2015, including an unchanged base salary of US$1.24 million and US$5 million worth of stock options. That was up 38 per cent from a year earlier.
A representative for Pershing Square declined to comment.