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Herbalife Elects Two Carl Icahn-Backed Board Members

Thursday, 25 Apr 2013 | 4:17 PM ET
Herbalife prodcucts
Scott Eells | Bloomberg | Getty Images
Herbalife prodcucts

During Herbalife's shareholder meeting, three proposals passed easily: an advisory vote supporting executive compensation, a plan to move toward annual re-election of the entire board and the election of some board members, including two new ones who work with Carl Icahn.

About 50 to 60 people, including only a handful of shareholders, attended Thursday's meeting, which was held in Beverly Hills. Reporters were allowed inside but minus electronic devices.

The only question from the audience inquired whether the nutrition supplement maker had any news or a timeline for hiring a new auditor. Herbalife has been without one since KPMG resigned earlier this month after senior partner Scott London allegedly admitted he had revealed inside information about Herbalife and Skechers USA to a friend. (Read More: Ousted KPMG Auditor for Herbalife, Skechers Has Been Identified)

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CNBC's Jane Wells reports on the Herbalife meeting from Beverly Hills. Meanwhile the FMHR traders reveal their favorite three trades.

LeRoy Barnes, who heads the Herbalife audit committee, said the company is in the process of hiring a new audit firm "as quickly as we can." He also reaffirmed that Herbalife stands behind the financial results reported under London's watch "with no hesitation."

Icahn representatives Jonathan Christodoro and Keith Cozza were elected to serve two-year terms on the board.

The meeting was over in 15 minutes, and the board then adjourned to a private meeting where reporters weren't allowed.

Board members weren't talking afterward, including those who work with Icahn, and there was no update on whether Icahn might make some sort of offer to take Herbalife private. Under the deal he has with the company, his stake cannot top 25 percent.

One of the few shareholders who attended was David Simon, CEO of Twin Capital Management.

Herbalife Shareholder: Own a Decent Position
CNBC's Jane Wells talks to Herbalife shareholder David Simon of Twin Capital about why he still likes the company.

Simon said he came to see the faces and "the body language" of the board. During the first quarter, he had purchased some shares after Bill Ackman famously attacked the company's business model. He later sold some shares after Icahn's filing revealed his new stake. Simon said he has since bought more.(Read More: Icahn, Ackman in Epic Showdown of Billionaires)

Simon explained to CNBC why he thinks Herbalife is a good investment.

"I don't think there's anything wrong with their accounting," he said.

He said he isn't bothered by the possibility that most of Herbalife's sales are only to its own distributors and said if that's a problem, then the FTC would need to shut down Avon, Mary Kay and others.

"All of them do exactly what Herbalife does," he said.

(Read More: Selling the American Dream: Investigations Inc)

As for the Ackman-Icahn spat, Simon said he does not think it's personal.

"Carl Icahn is a very smart businessman," Simon said. "He saw an opportunity, and he bought the stock."

—By CNBC's Jane Wells; Follow her on Twitter: @janewells

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