DEF 14A of Herbalife Ltd.
Filed Mar 12, 2024 · FY20230001193125-24-065924
2024 Director Nominees
2024 Director Nominees
2024 Director Nominees
| | | Committees | | | | | Name | Independent | Audit | Compensation | Nominating and Corporate Governance | ESG | | Michael O. Johnson (Chairman and CEO) | | | | | | | Richard H. Carmona | | | | Chair | | | Celine Del Genes | | | ● | | | | Sophie L’Hélias | | ● | | | Chair | | Alan W. LeFevre (Lead Director) | | ● | | ● | | | Michael J. Levitt | | | | | | | Rodica Macadrai | | | | | | | Juan Miguel Mendoza | | | | | ● | | Don Mulligan | | Chair | ● | | | | Maria Otero | | | Chair | ● | ● |
Executive Compensation Highlights
| 2023 Option exercises and stock vested | 56 | | 2023 Non-qualified deferred compensation table | 56 | | Potential payments upon termination or change in control | 57 | | Pay ratio disclosure | 61 | | Pay v. Performance | 62 | | Part 5. Security ownership of certain beneficial owners and management | | | Beneficial ownership | 66 | | Part 6. Certain relationships and related transactions | | | Ongoing related party transactions | 68 | | Other transactions | 69 |
Board leadership
Board leadership The Company’s governance framework provides the Board with the flexibility to select the appropriate leadership structure for the Company. The current leadership structure is comprised of a combined Chair of the Board and Chief Executive Officer, an independent Lead Director, Board committees led by independent directors and active engagement by all directors. The Board believes this structure best serves the interests of the Company and its shareholders. The combined Chair and CEO role supports the Board’s effective oversight of the Company’s business and strategy, with the CEO serving as a key link between the Board and management, providing a deep understanding of the Company’s business and operations, bringing key business considerations to the Board’s attention and leading implementation of the Company’s strategic plans as reviewed and approved by the Board. The Lead Director in turn allows for strong, independent Board leadership, with authority to set the meeting agendas and to lead sessions outside the Chair’s presence. We believe this to be a critical aspect of effective corporate governance. The Lead Director is an independent director elected for a two-year term by the independent directors. The appointment is evaluated biannually. The Lead Director chairs the Board meetings during executive sessions and when the Chair is unable to participate in Board meetings. The Lead Director also serves as a contact point for major shareholders and third parties who wish to contact the Board independent of the Chair and CEO. The responsibilities of the Lead Director include:
Board leadership
| • | setting the agenda for and leading the regularly-held independent director sessions, and briefing the Chair on any issues arising from those sessions; |
Board leadership
| • | coordinating the activities of the independent directors; |
Board leadership
| • | presiding at meetings of the Board at which the Chair is not present, including executive sessions of the non-management and independent directors; |
Board leadership
| • | acting as the principal liaison to the Chair for the views, and any concerns and issues of, the independent directors; |
Board leadership
| • | advising on the flow of information sent to the Board, and reviewing the agendas, materials and schedules for Board meetings; |
Board leadership
| • | being available for consultation and communication with major shareholders, as appropriate; |
Board leadership
| • | maintaining close contact with the chair of each committee; and |
Board leadership
| • | performing other duties that the Board may from time to time delegate to assist the Board in the fulfillment of its responsibilities. |
Board leadership
Mr. LeFevre was elected to serve as Lead Director by the independent directors effective July 1, 2021, to serve until the Company’s 2023 Annual General Meeting of Shareholders, and was re-elected by the independent directors on April 27, 2023 to serve another two-year term through the Company’s 2025 Annual General Meeting of Shareholders. The Board periodically reviews the structure of the Board and Company leadership as part of the succession planning process.
Board leadership
| 6 | Corporate governance |
2023 Director compensation table
2023 Director compensation table
2023 Director compensation table
| Name | Fees earned or paid in cash ($) | Stock awards ($)(1) | All other compensation ($) | Total ($) | | Richard H. Carmona | 125,000 | 149,994 | 75,000(2) | 349,994 | | Celine Del Genes | 110,000 | 149,994 | — | 259,994 | | Stephan Gratziani(3)(4) | 26,389 | — | 15,620,075(5) | 15,646,464 | | Sophie L’Hélias | 135,000 | 149,994 | — | 284,994 | | Kevin M. Jones | 110,000 | 149,994 | — | 259,994 | | Alan W. LeFevre | 145,000 | 174,991(6) | — | 319,991 | | Rodica Macadrai(3)(7) | 30,833 | 99,994 | 984,652(8) | 1,115,479 | | Juan Miguel Mendoza(3) | 108,988 | 149,994 | 1,232,288(9) | 1,491,270 | | Don Mulligan | 140,000 | 149,994 | — | 289,994 | | Maria Otero | 145,000 | 149,994 | — | 294,994 | | John Tartol(3)(10) | 31,944 | — | 1,537,003(11) | 1,568,947 |
2023 Director compensation table
| (1) Amounts represent the aggregate grant date fair value of the relevant award(s) presented in accordance with FASB ASC Topic 718, “Compensation—Stock Compensation.” See Note 9 to the to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, for a discussion of the relevant assumptions used in calculating these amounts pursuant to FASB ASC Topic 718. |
2023 Director compensation table
| (2) Amount represents fees for speaking at Herbalife events. |
2023 Director compensation table
| (3) All independent distributors of Herbalife products, including Ms. Macadrai and Messrs. Mendoza and Tartol, are eligible to receive income under the Company’s Marketing Plan as a result of their activities as distributors Ms. Macadrai and Messrs. Gratziani, Mendoza and Tartol would have received this income, which is quantified in notes 5,8,9, and 11 below, irrespective of their services on the Board. Mr. Gratziani did not receive any such income after suspension of his distributorship. Neither Ms. Macadrai nor Messrs. Gratziani, Mendoza and Tartol receive any preferential treatment or payments under the Company’s Marketing Plan. |
2023 Director compensation table
| (4) Mr. Gratziani resigned from the Board, effective August 1, 2023. |
2023 Director compensation table
| (5) Amount includes: (i) the $227,077 in pro-rated base salary, (b) $115,360 in bonus, (c) $1,399,996 in awards, which is the aggregate grant date fair value in accordance with FASB ASC Topic 718, (d) $285 in Company-paid premiums for executive life insurance, and (e) $6,387 in Company paid 401(k) matching contributions, in each case, in respect of Mr. Gratziani’s service as the Company’s Chief Strategy Officer in 2023 and consistent with amounts disclosed in the corresponding “Salary,” “Stock awards,“ “Option Awards,” “Non-Equity Incentive Plan Compensation” and “All Other Compensation” columns of the 2023 Summary Compensation Table; (ii) $47,422 in fees for speaking at Herbalife events for Herbalife Members; and (iii) $4,069,562 in income earned as a top distributor of Herbalife products. Additionally, unrelated to his service as a Board member, amount also includes $9,753,986 in consideration for suspending the operation of Mr. Gratziani’s distributorship which includes: (x) $4,753,994 in cash compensation of which $3,000,000 in cash compensation was paid in 2023 and the remaining amount to be paid in 2024 and 2025 and (y) a grant of stock appreciation rights having a grant date fair value equal to $4,999,992. |
2023 Director compensation table
| (6) Includes Mr. LeFevre’s lead director equity grant in 2023. |
2023 Director compensation table
| (7) Ms. Macadrai was appointed to the Board on September 10, 2023. |
2023 Director compensation table
| (8) Amount includes $40,425 in fees for speaking at Herbalife events for Herbalife Members. Additionally, unrelated to her service as a Board member, amount also includes $944,226 in income earned as a top distributor of Herbalife products. See note 3 above. |
2023 Director compensation table
| (9) Amount includes $107,412 in fees for speaking at Herbalife events for Herbalife Members. Additionally, unrelated to his service as a Board member, amount also includes $1,124,870 in income earned as a top distributor of Herbalife products. See note 3 above. |
2023 Director compensation table
| (10) Mr. Tartol served on the Board until April 26, 2023. |
2023 Director compensation table
| (11) Amount includes $30,000 in fees for speaking at Herbalife events for Herbalife Members. Additionally, unrelated to his service as a Board member, amount also includes $1,537,003 in income earned as a top distributor of Herbalife products. See note 3 above. |
2023 Director compensation table
| Corporate governance | 11 |
2023 Director compensation table
The table below summarizes the equity-based awards held by non-management directors who served on the Company’s Board of Directors in 2023, as of December 31, 2023.
2023 Director compensation table
| Name | Stock Unit Awards | | | | Number of Shares or units of stock that have not vested (#) | Market value of Shares or units of stock that have not vested(1) ($) | | Richard H. Carmona | 11,029 | $168,303 | | Celine Del Genes | 11,029 | $168,303 | | Stephan Gratziani(2) | — | — | | Kevin M. Jones | 11,029 | $168,303 | | Sophie L’Hélias | 11,029 | $168,303 | | Alan W. LeFevre | 12,867(3) | $196,350 | | Rodica Macadrai(4) | 7,541 | $115,076 | | Juan Miguel Mendoza | 11,029 | $168,303 | | Don Mulligan | 11,029 | $168,303 | | Maria Otero | 11,029 | $168,303 | | John Tartol(5) | — | — |
2023 Director compensation table
| (1) Market value based on the closing price of a Common Share on the NYSE on December 29, 2023, of $15.26 |
2023 Director compensation table
| (2) The 11,029 RSUs Mr. Gratziani received as compensation for his services on the Board was forfeited upon Mr. Gratziani’s resignation from the Board in August 2023. |
2023 Director compensation table
| (3) Amount includes Mr. LeFevre’s lead director equity grant in 2023. |
2023 Director compensation table
| (4) Ms. Macadrai was appointed to the Board on September 10, 2023. |
2023 Director compensation table
| (5) Mr. Tartol served on the Board until April 26, 2023. |
Current committee memberships
| • | reviewing the compensation of directors, and making recommendations to the Board; |
Proposal 1: The election of directors
Proposal 1: The election of directors
Nominees for election as directors
Nominees for election as directors
Nominees for election as directors
| Michael O. Johnson Age: 69 Director Since April 2022 Chairman Since October 2022 | Qualifications and Expertise Provided to the Board Mr. Johnson has unparalleled institutional knowledge of the Company’s operations and distributor network, and experience leading the Company through multiple economic cycles and international expansion over his previous 16 years as its CEO. Mr. Johnson brings extensive global sales and marketing leadership as well as significant experience in government engagement around the world. His expertise helps the Board provide effective oversight of the Company’s business strategy. | | | Experience Mr. Johnson currently serves as the Company’s Chairman and Chief Executive Officer and has held such positions since December 2022. He served as the Company’s Chairman and interim Chief Executive Officer from October 2022 to December 2022. He previously served as Chairman of the Board and held this position from May 2007 to April 2020. He also previously served as Chief Executive Officer of the Company and held such position from January 2019 to March 2020. He previously served as the Company’s Executive Chairman from June 2017 to January 2019 and as the Company’s Chief Executive Officer from April 2003 to May 2017. Prior to joining the Company, Mr. Johnson spent 17 years with The Walt Disney Company, where he served as President of Walt Disney International, and also served as President of Asia Pacific for The Walt Disney Company and President of Buena Vista Home Entertainment. Mr. Johnson has also served as a publisher of Audio Times magazine, and has directed the regional sales efforts of Warner Amex Satellite Entertainment Company for three of its television channels that include MTV, Nickelodeon and The Movie Channel. Mr. Johnson formerly served as a director of Univision Communications, Inc., a television company serving Spanish-speaking Americans, until March 2007, and on the Board of Regents for Loyola High School of Los Angeles. Mr. Johnson received his Bachelor of Arts in Political Science from Western Colorado University. Other Public Boards • None Previous Public Boards (Past Five Years) • Herbalife Ltd. (April 2003 – April 2020) |
Nominees for election as directors
| Proposals to be voted on at the meeting | 19 |
Nominees for election as directors
| Dr. Richard H. Carmona Age: 74 Independent Director Since 2013 Board Committees: Nominating and Corporate Governance Committee (Chair) | Qualifications and Expertise Provided to the Board Dr. Carmona’s experience as the Surgeon General of the United States, as Chief of Health Innovations at a pioneering integrative wellness company, and as distinguished professor of surgery, public health, family, and community medicine are directly relevant to the Company’s business. His diverse experience strengthens the Board’s oversight of the Company’s nutritional product innovation and wellness-focused business strategy. | | | Experience Dr. Carmona has served as Chief of Health Innovations of Canyon Ranch, a life-enhancement company, since August 2017. He previously served as Vice Chairman of Canyon Ranch, Chief Executive Officer of the Canyon Ranch Health division, and the President of the nonprofit Canyon Ranch Institute, from October 2006 to August 2017. Dr. Carmona is also a Distinguished Professor of Public Health at the Mel and Enid Zuckerman College of Public Health at the University of Arizona. Prior to joining Canyon Ranch, Dr. Carmona served as the 17th Surgeon General of the United States from August 2002 through July 2006. Previously, he was Chairman of the State of Arizona Southern Regional Emergency Medical System; a professor of surgery, public health, and family and community medicine at the University of Arizona; and surgeon and deputy sheriff of the Pima County, Arizona, Sheriff’s Department. Dr. Carmona served in the U.S. Army and the Army’s Special Forces. Other Public Boards • Director, McKesson Corporation (September 2021 – Present) • Director, Better Therapeutics – Public October 2021 (November 2017 – Present) Previous Public Boards (Past Five Years) • Director, Clorox Company (February 2007 – November 2022) • Director, Axon Enterprise Inc. (formerly Taser International) (March 2007 – May 2022) | | Celine Del Genes Age: 47 Independent Director Since 2022 Board Committees: Compensation | Qualifications and Expertise Provided to the Board Ms. Del Genes’ over twenty years of experience in a fast growing, global consumer products company and expertise in the areas of marketing and communications is additive to the Board. Her expertise strengthens the Board’s oversight of the Company’s strategic business strategy, particularly as it pertains to branding, marketing and digital initiatives across a large number of international markets. | | | Experience Ms. Del Genes has served as Global Chief Customer Officer at Decathlon, a worldwide leader in sports retail, since August 2023. Previously, Ms. Del Genes served as the Global General Manager, Specialist Sports Business Unit at Adidas AG, a multinational corporation that designs and manufactures footwear, apparel and accessories, from February 2019 to July 2023. From January 2017 to February 2019, Ms. Del Genes served as the Global Vice President, Concept-to-Consumer, Global Football/Soccer at Adidas, and has held various positions with Adidas and Reebok around the globe since 2001 with a focus in marketing and communications. Ms. Del Genes holds a Bachelors degree in Marketing, Marketing Management from the EDC Paris Business School. Other Public Boards • None Previous Public Boards (Past Five Years) • None |
Nominees for election as directors
| 20 | Proposals to be voted on at the meeting |
Nominees for election as directors
| Michael J. Levitt Age: 65 Independent Director Since 2024 Board Committees: None | Qualifications and Expertise Provided to the Board Mr. Levitt has significant financial expertise specifically relating to consumer products. His knowledge of the corporate credit and investment markets, business acumen, and leadership as a Chief Executive Officer provide him with the qualifications and skills to serve on our Board. Experience Mr. Levitt is the Chairman of Irradiant Partners, LP., an investment management firm focused on liquid credit, opportunistic credit and renewable private equity and credit. He has served in that capacity since Irradiant’s founding in 2021. Mr. Levitt served as the Chairman (from 2018 to 2024) and Chief Executive Officer (from 2021 to 2023) of Core Scientific, Inc., a blockchain computing data center provider. Core Scientific filed a voluntary petition for reorganization under Chapter 11 under the Bankruptcy Code in 2022 that was approved by the court in 2024. Mr. Levitt was Chief Executive Officer of Kayne Anderson Capital Advisors, LP, an alternative investment management company, from 2016 to 2021. Before joining Kayne Anderson, Mr. Levitt served as a Vice Chairman of Apollo Global Management, LLC. Mr. Levitt joined Apollo following Apollo’s acquisition of Stone Tower Capital LLC, an investment management firm that he founded in 2001 and where he served as Chairman, Chief Executive Officer, and Chief Investment Officer. Prior to forming Stone Tower, Mr. Levitt was a partner with the private equity firm Hicks, Muse, Tate and Furst, Inc. Earlier in his career, Mr. Levitt served as a Managing Director and Co-Head of the Investment Banking Division of Smith Barney Inc. and as a Managing Director with Morgan Stanley & Co. Mr. Levitt is a member of the University of Michigan’s Endowment Investment Advisory Committee and Ross School of Business Advisory Board, and the Trustee of the Michigan Law School’s Cook Trust. Mr. Levitt earned his undergraduate degree and Juris Doctor from the University of Michigan. Other Public Boards • None Previous Public Boards (Past Five Years) • Director, The Music Acquisition Corporation (December 2020 – December 2022) • Director, Core Scientific (June 2018 – January 2024) |
Nominees for election as directors
| Proposals to be voted on at the meeting | 21 |
Nominees for election as directors
| Sophie L’Hélias | Qualifications and Expertise Provided to the Board Ms. L’Hélias’ significant knowledge of ESG, global financial markets and corporate governance helps the Board provide effective oversight of the Company’s environmental and social sustainability initiatives, as well as capital investments across the globe. | | Age: 60 Independent Director Since 2021 Board Committees: Audit ESG (Chair) | | | | Experience Ms. L’Hélias is the President and Founder of LeaderXXchange, an advisory firm founded in 2015 that develops solutions that integrate sustainability and diversity in strategy, leadership and investment. She is co-founder of the International Corporate Governance Network (ICGN) and served as an advisor to the UN Global Compact’s Blueprint for SDG Leadership. Ms. L’Hélias is also a non-executive director on the Board of IWG PLC, a global leader in flexible workspace, Africa50, an infrastructure development impact fund, Agence France-Locale, a community lending bank, and Echiquier Positive Impact Europe funds. Ms. L’Hélias is a non-executive Board member of the European Corporate Governance Institute (ECGI), a non-profit based in Brussels, a member of the HCGE, the authority charged with overseeing the implementation of French Afep-Medef corporate governance code, and a Fellow at The Conference Board ESG Center in New York. Ms. L’Hélias holds an MBA from INSEAD; a Master of Laws (LLM) from the University of Pennsylvania, Law School; Master of Laws from the Université Paris 1, Panthéon-Sorbonne Law School; and a law degree from the University of Saarbrucken, European Law Institute. Other Public Boards • Director, IWG PLC (London Stock Exchange-listed) (December 2022 – Present) Previous Public Boards (Past Five Years) • Director, Kering SA (Euronext Paris-listed) (April 2016 – March 2022) | | Alan W. LeFevre Lead Independent Director Age: 64 Independent Director Since 2018 Board Committees: Audit Nominating and Corporate Governance | Qualifications and Expertise Provided to the Board Mr. LeFevre’s significant finance and operations experience as a former Chief Financial Officer of a leading public consumer products company where he spent nearly two decades, along with his CPA experience are valuable to the Board. His expertise strengthens the Board’s oversight of the Company’s financial, operational and human capital risks. | | | Experience Mr. LeFevre is the former Executive Vice President – Finance and Chief Financial Officer for Jarden Corporation, a leading provider of consumer products with a portfolio of over 120 brands sold globally, a position he held from June 2014 to April 2016. Prior to Jarden, from February 1997 to June 2014, Mr. LeFevre worked for Jarden Consumer Solutions (JCS), a subsidiary of Jarden and, formerly, the Sunbeam Corporation, a manufacturer of home appliances, including from April 2002 to June 2014, as the Executive Vice President of Operations and Chief Financial Officer, where he led the Supply Chain, Manufacturing, Sourcing, Engineering, and Information Technology groups for JCS, and oversaw accounting and finance. From February 1997 to April 2002, Mr. LeFevre held positions of increasing responsibilities within the same business unit. Mr. LeFevre started his career with Arthur Andersen & Co. in 1982. Mr. LeFevre graduated with distinction from Valparaiso University with a Bachelor of Science in Business Administration degree and was a certified public accountant. Other Public Boards • None Previous Public Boards (Past Five Years) • None |
Nominees for election as directors
| 22 | Proposals to be voted on at the meeting |
Nominees for election as directors
| Rodica Macadrai Age: 55 Director Since 2023 Board Committees: None | Qualifications and Expertise Provided to the Board Ms. Macadrai’s 29 years of experience as an independent distributor of Herbalife products brings a first-hand understanding of the function, drivers and specific needs of the Company’s business to the Board. Her tenure as a distributor also provides valuable institutional insight into the Company’s growth and development over the last three decades. | | | Experience Ms. Macadrai has been an independent Herbalife distributor for 29 years and a member of the Company’s Chairman’s Club since 2020. She has been active in training independent Herbalife distributors around the world and is a member of various strategy and planning groups for the Company. Other Public Boards • None Previous Public Boards (Past Five Years) • None | | Juan Miguel Mendoza Age: 50 Director Since 2018 Board Committees: ESG | Qualifications and Expertise Provided to the Board Mr. Mendoza’s 31 years of experience as an independent distributor of Herbalife products brings a first-hand understanding of the function, drivers and specific needs of the Company’s business to the Board. His tenure as a distributor also provides valuable institutional insight into the Company’s growth and development over the last three decades. | | | Experience Mr. Mendoza has been an independent Herbalife distributor for 31 years and a member of the Company’s Chairman’s Club since 2013. He has been active in training independent Herbalife distributors around the world and is a member of various strategy and planning groups for the Company. Other Public Boards • None Previous Public Boards (Past Five Years) • None |
Nominees for election as directors
| Proposals to be voted on at the meeting | 23 |
Nominees for election as directors
| Don Mulligan Age: 63 Independent Director Since 2021 Board Committees: Audit (Chair) Compensation | Qualifications and Expertise Provided to the Board Mr. Mulligan’s tenure as CFO of a Fortune 200 company and experience working in Asia and Latin America is directly relevant to the Company’s growth strategy. His experience helps the Board provide effective oversight of the Company’s global expansion, talent development, financial disclosures, capital structure, risk management, investments, M&A and corporate governance. | | | Experience Mr. Mulligan served as Chief Financial Officer at General Mills, a multinational manufacturer and marketer of branded consumer foods, from 2007 to 2020. Mr. Mulligan previously held executive positions with General Mills from 2001 to 2007, including Vice President, Finance for the International division; Vice President, Finance for Operations and Technology; and Vice President, Treasurer. Prior to General Mills, Mr. Mulligan served as Chief Financial Officer, International, for the Pillsbury Company from 1999 to 2001, and held various international positions with PepsiCo Inc. and YUM! Brands, Inc., including Regional CFO, Americas; Finance Director, Asia; and Finance Director, Canada, from 1987 to 1998. Mr. Mulligan started his career with GTE Corporation in 1985. Mr. Mulligan earned his Bachelor of Arts from Duke University and his MBA from University of Michigan Graduate School of Business. Other Public Boards • Director, Energizer Holdings, Inc. (April 2021 – Present) • Director, Tennant Company (2009 – Present) Previous Public Boards (Past Five Years) • None |
Nominees for election as directors
| 24 | Proposals to be voted on at the meeting |
Nominees for election as directors
| Maria Otero Age: 73 Independent Director Since 2013 Board Committees: Compensation (Chair), Nominating and Corporate Governance ESG | Qualifications and Expertise Provided to the Board Ms. Otero’s extensive leadership experience in government and global microfinance, including as the first Latina Undersecretary of the U.S. State Department, provides the Board with valuable public affairs, regulatory and financial expertise. Her experience strengthens the Board’s oversight of the Company’s global investment and expansion strategy, as well as regulatory risks. | | | Experience Ms. Otero currently serves on the board of Development Alternatives Inc. The first Latina undersecretary in the U.S. Department of State’s history, Ms. Otero served as Undersecretary of State for Democracy and Global Affairs and Undersecretary for Civilian Security, Democracy, and Human Rights under President Obama. During her time at the U.S. Department of State, Undersecretary Otero also served as the President’s Special Coordinator for Tibetan Issues. Prior to serving the government, from 2000 to 2009 Ms. Otero served as President and CEO of Accion International, a global microfinance organization operating in 26 countries. At Accion International, Ms. Otero chaired the board of Accion Investments, a global equity investment fund and represented Accion on the board of several microfinance banks. She was appointed by President Clinton to chair the board of the Inter-American Foundation and by President Bush to serve as vice-chair on the board of the U.S. Institute of Peace. In 2006, she was appointed by Secretary General Kofi Annan to the U.N. Advisors Group on Inclusive Financial Sectors. Ms. Otero has served on the boards of: Development Alternatives Inc. from 2014, the Kresge Foundation since 2013, the Public Welfare Foundation from 2013 to 2021, Oxfam America from 2014 to 2020, and the Smithsonian Institution National Portrait Gallery since 2016, and is a member of the Council of Foreign Relations. In December 2020 she was named to the Board of Trustees of American University. She also chaired the board of Bread for the World, and served on the boards of the Calvert Foundation and BRAC in Bangladesh. Ms. Otero also worked as an economist for Latin America and the Caribbean in the Women in Development Office of USAID. Ms. Otero holds an M.A. in literature from the University of Maryland; an M.A. in International Relations from the Paul H. Nitze School of Advanced International Studies (SAIS) at Johns Hopkins University; and holds an honorary Doctorate of Humane Letters from Dartmouth College. Other Public Boards • None Previous Public Boards (Past Five Years) • None |
Nominees for election as directors
| Proposals to be voted on at the meeting | 25 |
Our Executive Compensation Structure
| Base Salary | Short-Term Incentives | Long-Term Equity-Based Incentives | | Fixed cash compensation for NEOs which is reflective of job scope and responsibilities, demonstrated sustained performance, capabilities and experience. | Annual cash incentive designed to reward NEOs for achievement of challenging annual financial targets. For 2023, performance was evaluated against preset goals for the following financial metrics: • Operating Income (50%) • Volume Points (50%) | Long-Term equity incentives intended to align executives’ interests with those of long-term shareholders, motivate and reward strategic planning and future growth, and retention of successful NEOs. |
Actual Direct Compensation*
| * Mr. Johnson, the Company’s Chairman and CEO, received a base salary of $1 and bonus payments that consisted of (i) a $250,000 cash signing bonus and (ii) an equity performance bonus valued at $684,657. |
Actual Direct Compensation*
| Things we do | Things we don’t do | | Our executive compensation program is simple in design and follows guidelines that have repeatedly proven effective in creating a “pay for performance” culture and a keen focus on profitability, as well as retaining key executives. These guidelines include: ☑ linking a significant majority of the incentive opportunity available to our NEOs to long-term growth in stakeholder value; ☑ designing annual incentive awards that are aligned with share value appreciation; ☑ imposing caps on awards payable to each NEO under our annual incentive plan; ☑ annually reviewing current public data regarding the Herbalife Peer Group when compensation decisions are made; ☑ maintaining a robust “clawback” policy that applies to our Section 16 officers in the event of a financial restatement; and ☑ encouraging our NEOs to hold Common Shares with an aggregate value equal to five times base salary for our CEO, or two times base salary for our other NEOs, to align interests with the long-term interests of all stakeholders. | The Committee is committed to maintaining and adopting prevailing best practices with regard to executive compensation. As such, we DO NOT DO the following: ☒ we do not guarantee our NEOs any annual incentive award amounts — all annual bonuses require financial performance against annually established goals as established by the Committee; ☒ we do not re-price or back-date equity awards; ☒ we do not issue equity awards with below market exercise prices; ☒ we do not provide supplemental retirement benefits; ☒ we do not provide excise tax gross ups to our NEOs; ☒ we do not encourage excessive or imprudent risk-taking; and ☒ we do not permit employees to hedge, pledge, short sell or engage in derivative transactions of our Common Shares. |
Executive compensation program objectives
| Principle | Implication on HLF Program | Rationale | | Alignment of Executives’ and Long-Term Shareholders’ Interests. Long-term incentives should be provided in Company equity, where allowed by local law, to encourage executives to plan and act with the perspective of shareholders and with the Company’s vision, mission and values in mind, and be rewarded for the successful implementation of our growth strategies. | • Long-term incentive awards to NEOs consist of 75% SARs and 25% RSUs. • The Company has competitive share ownership guidelines. | • Aligns executive rewards with the Company’s sustained long-term performance and shareholder value creation as reflected by share price appreciation. • Encourages equity ownership further aligns executives with sustained performance and shareholder value. | | Pay for Superior Performance. Incentive compensation must provide superior pay for superior performance that meets or exceeds the expectations of our shareholders. | • Superior performance expectations are built into performance targets and ranges of our incentive plans such that when incentive targets are met, the Company is exceeding peer financial performance and meeting shareholder expectations. • Our incentive plans are calibrated to deliver above-median compensation for meeting superior performance targets, and, in the case of SARs, through share price appreciation. | • Incentivizes NEOs to exceed target financial goals and drive share price appreciation. | | Balanced Incentives to Promote Sustainable Value-Creation. Incentive compensation should reflect a balanced time horizon between annual and long-term performance in order to promote sustainable growth in the value of the enterprise. | • Annual cash incentives align executive incentives on achievement of annual financial performance targets. • SARs align executive incentives with long-term shareholder interest and share price appreciation, which over that time derive value only from share price appreciation. | • Aligns pay mix with competitive practice. • Mitigates risk through use of a balanced mix of cash and equity incentives and performance metrics. |
Elements of Compensation
| Direct Compensation | Purpose | | Base salary | Provide a competitive foundation for total compensation to each executive that reflects job scope and responsibilities, demonstrated sustained performance, capabilities and experience. | | Annual cash incentives | Reward NEOs for the achievement of challenging annual financial targets that drive growth in shareholder value. | | Long-term equity-based incentives | Provide incentives for NEOs to develop strategic plans, and make tactical decisions that will enhance stakeholder value, reward NEOs with participation in the creation of sustained long-term shareholder value and encourage successful NEOs to remain with the Company. | | Indirect Compensation (benefits) | Purpose | | Retirement benefits | Encourage NEOs to build retirement resources by providing a match on deferred compensation in the Company’s 401(k) plan and Senior Executive Deferred Compensation Plan. | | Life insurance benefits | Provide a competitive benefit in the event of death of an executive. | | Severance benefits | Enable each NEO to focus his full time and attention on meeting the financial and operating objectives set by the Committee without fear of the financial consequences of an unexpected termination of employment. | | Change in control benefits | Enable NEOs to focus on shareholder interests when considering strategic alternatives. |
Annual incentive awards
Annual incentive awards Our annual cash incentive plan is designed to motivate and reward the achievement of annual financial targets that create value for our stakeholders. The Committee establishes financial performance targets and goals for our annual incentive plan each year, taking into consideration that such targets and goals align with and support the Company’s business strategy, recognize current business conditions, align with the current year financial budget and require performance that is competitive with those of the Herbalife Peer Group. Incentive bonus awards are subject to approval by the Committee, and continuous employment through the date such bonus award payment is made. Notwithstanding the foregoing, the Committee, in its sole and absolute discretion, may provide for payment of any incentive bonus award to a terminated employee, which award shall be paid at the time incentive bonus awards are paid to active employees.
Annual incentive awards
| Executive compensation | 43 |
Annual incentive awards
For 2023, the Committee approved performance targets that related to the following equally weighted performance metrics: (1) targeted Volume Points, serving as a proxy for sales, and (2) targeted Operating Income, subject to adjustments as discussed below. These performance metrics were chosen because they incentivize our named executive officers to make decisions that improve our profitability. The Committee set each named executive officer’s target incentive opportunity based on the executive’s position, scope of responsibilities, ability to influence Company results, and competitive pay practices among the Herbalife Peer Group. The following table shows each NEO’s target incentive opportunity, expressed in dollar terms and as a percentage of base salary:
Annual incentive awards
| | Bonus Eligible Base Salary(1) | Target Bonus | | | NEO | | (% of Salary)(2) | $ | | Michael O. Johnson | — | — | $1,200,000 | | Alexander Amezquita | $613,288 | 79.3% | $486,336 | | Henry Wang | $592,192 | 78.55% | $465,164 | | Frank Lamberti | $607,371 | 70.4% | $427,436 | | Ibelis Montesino | $592,192 | 65.11% | $385,562 |
Annual incentive awards
| (1) Calculated using prorated salaries for Messrs. Amezquita, Wang, Lamberti, and Ms. Montesino due to salary changes during the year, as further outlined under “Base Salaries” above. |
Annual incentive awards
| (2) Calculated using prorated percentages for Messrs. Amezquita, Wang, Lamberti, and Ms. Montesino. Prior to February 27, 2023, Mr. Amezquita’s annual target bonus opportunity was 75%, and effective February 27, 2023, increased to 80%. Prior to February 27, 2023, Mr. Wang’s annual target bonus opportunity was 70%, and effective February 27, 2023, increased to 80%. Prior to July 1, 2023, Mr. Lamberti’s annual target bonus opportunity was 60% and effective July 1, 2023, increased to 80%. Prior to July 1, 2023, Ms. Montesino’s annual target bonus opportunity was 60% and effective July 1, 2023, increased to 70%. Mr. Johnson’s bonus opportunity for 2023 was provided for in his 2022 employment agreement and was not tied to a percentage of base salary. |
Annual incentive awards
The following table summarizes the performance metrics, targets, weightings, actual performance and eligible payout percentages for the components of the 2023 annual incentive plan for our executive officers:
Annual incentive awards
| 2023 Annual Incentive Plan Performance Metrics | Performance Metrics Weightings | 2023 Target | 2023 Results | 2023 Results as a % of target | Payout as a % of Target | Weighted Payout | | Operating income (millions) | 50% | $530,977 | $481,587(1) | 90.7% | 53.5% | 26.8% | | Volume Points (millions) | 50% | 6,038,768 | 5,800,948 | 96.1% | 60.6% | 30.3% | | | | | | | Total Payout Achieved: | 57.1% |
Annual incentive awards
| (1) Operating Income presented as adjusted, as discussed below. |
Annual incentive awards
Executive bonuses are only awarded for results at or above 95% of the volume points target and 90% of operating income target, with payouts capped at performance levels at and above 105% of volume points target and 110% of the operating income target. Results below the 90% of operating income level would result in no payout, at the 90% level would result in a 50% payout as a percentage of applicable target, and at or above the maximum 110% level would result in a 200% payout as a percentage of applicable target. Bonuses are calculated utilizing linear interpolation for performance outcomes between levels. This bonus scale is designed to encourage realistic target-setting and prudent risk-taking while simultaneously creating consequences for not meeting target and capping the potential payout in order to avoid excessive incentive awards as compared to performance.
Targets and award determination
For 2023 annual incentive plan performance purposes, our Operating Income was calculated consistent with our adjusted EPS presentations, adjusting for: expenses related to our transformation program; non-income tax settlement; and expenses related to our digital technology program. Our Operating Income was further adjusted, consistent with prior years, to include for bonus purposes, the impact of changes in currency exchange rates. Motivating Operating Income growth permits Volume Point growth to be achieved in a cost-effective manner so that cost efficiencies and productivity enhancements are pursued throughout the Company. We believe that the Company’s financial performance is facilitated by the “pay for performance” design of our compensation program. Our program motivates our NEOs to deliver financial results, with the appropriate level of risk-taking, against performance metrics in a manner that ultimately aligns with the realized growth of shareholder equity value. Our NEOs have the opportunity to earn annual incentive awards provided that the Company achieves aggressive growth targets in Volume Points and Operating Income. The Committee reviews and discusses the performance metrics and applicable weightings in approving the annual incentive award program each year to appropriately align incentives. The following table summarizes the results for bonus purposes under the 2023 annual incentive plan as compared to the results in the preceding three years:
Targets and award determination
| | Results for Bonus Purposes | | | | 2023 Target | | | 2020 | 2021 | 2022 | 2023 | | | Operating Income ($, millions) | 797.9(1) | 794.9(2) | 610.5(3) | 481.6(4) | 531.0 | | Volume Points (millions) | 6,926 | 7,098 | 6,379 | 5,801 | 6,039 |
Long-term incentive awards
Long-term incentive awards Long-term incentive awards are designed to provide a link to long-term shareholder value through equity awards for our executives. Each year, the Committee determines the form of equity grant. Additional details of the 2023 equity awards made to our NEOs can be found below and in the tabular disclosure below under “2023 Grants of plan-based awards” on page 53. 2023 Long-term incentive awards — annual grant program The Committee set each named executive officer’s 2023 target long-term incentive value based on the executive’s position, scope of responsibilities, ability to influence Company results, and competitive pay practices among the Herbalife Peer Group. The table below shows each named executive officer’s 2023 target long-term incentive value and the allocation of that value between SARs and RSUs granted to the executives in May 2023. The Committee granted RSUs and SARs to the named executive officers to align the Company’s compensation program with general and peer group market practices and align the interests of our named executive officers with those of our shareholders.
Long-term incentive awards
| NEO | Target LTI Value | SAR grant value(1) | Total SARs awarded | RSU grant value | Total RSUs awarded | | Michael Johnson | $10,000,000 | $0 | 0 | $0 | 0 | | Alexander Amezquita | $1,400,000 | $1,049,995 | 172,413 | $349,996 | 25,735 | | Henry Wang | $1,400,000 | $1,049,995 | 172,413 | $349,996 | 25,735 | | Frank Lamberti | $1,400,000 | $1,049,990 | 144,481 | $349,989 | 22,023 | | Ibelis Montesino | $1,000,000 | $749,992 | 110,117 | $249,978 | 16,649 |
Long-term incentive awards
| (1) In August 2023, the Committee approved separate grants of 64,432 SARs and 10,075 RSUs to Mr. Lamberti and 30,068 SARs and 4,701 RSUs to Ms. Montesino. All equity grants reflected in this table were made under the 2023 Plan. Grant values are set by the Committee and may vary slightly from amounts set forth in the 2023 Summary Compensation Table due in part to rounding down to the nearest whole unit in calculating the number of units granted on the grant date. |
Restricted stock units
Restricted stock units The 2023 RSUs awarded to each of our NEOs will vest in three equal annual installments subject to the NEO’s continuous employment through each vesting date. The number of RSUs that vest on each vesting date is settled in an equivalent number of shares of common stock. Mr. Johnson did not receive a grant of RSUs in 2023.
Stock appreciation rights
Stock appreciation rights The 2023 SARs awarded to each of our NEOs will vest in three equal annual installments subject to the NEO’s continuous employment through each vesting date. The SARs’ exercise price is equal to our share price on the date of grant. Vested SARs may be exercised at any time until the tenth anniversary of the grant date. Upon exercise, an NEO will receive shares with a value equal to the product of (i) the number of SARs exercised and (ii) an amount equal to the excess of the SARs’ exercise price over the share price on the date of exercise. Mr. Johnson did not receive a grant of SARs in 2023. However, in December 2022, Mr. Johnson was granted SARs that will vest 100% on the second anniversary of the grant date. 2021 PSU Results. Each of the NEOs, other than Mr. Johnson and Ms. Montesino, were granted PSUs in February 2021, the vesting of which were subject to the Company’s achievement level for two performance metrics set by the Committee as measured over a three-year performance period beginning January 1, 2021 and ending December 31, 2023, subject further to continued Company service. Each metric made up one-half of the 2021 PSU award granted to such NEOs, comprised of: Local Currency Net Sales (as defined above) and Adjusted EBIT (as defined above). Each metric is weighted equally to determine total payout and linear interpolation is used to determine the number of PSUs earned and vested for performance. In February 2024, following completion of the performance period, the Committee certified a final total payout for the 2021 PSU awards of 28.1% of target, based on the below achievements during the 2021-2023 performance period:
2021 PSU Results
2021 PSU Results 2021-2023 Performance Period
2021 PSU Results
| 2021 PSU Performance Metrics | Performance Metrics Weightings | Criteria Range | Performance Based Eligibility Range | Actual Achievement | Actual% Achievement | Actual% Payout | | Local Currency Net Sales (in billions) | 50% | < $16.58 – $23.40 | 0% – 200% | $16.941 | 56.2% | 56.3% | | Adjusted EBIT (in billions) | 50% | <$2.11 – $3.10 | 0% – 200% | $2.011 | 0% | 0% | | Actual Total Payout: | | | | | | 28.1% |
Equity award grant policy
Equity award grant policy It is the Company’s policy to make annual equity grants to all eligible employees during an “open trading window”, which typically begins the second trading day following our release of quarterly financial results. We also follow a quarterly grant approval process where awards are authorized for newly-hired employees and to newly promoted executives other than our executive officers. All annual equity awards made to our NEOs and other executives are made pursuant to this equity grant policy, which was approved by the Committee. We encourage all Section 16 officers to utilize a Rule 10b5-1 trading plan when exercising or selling any of the Company’s equity.
Employment and severance agreements
Employment and severance agreements Other than Mr. Johnson (who is not eligible under the terms of his 2022 employment agreement), our NEOs participate in the Herbalife International of America, Inc. Executive Officer Severance Plan, or the Severance Plan, which provides for certain benefits upon death, disability, resignation by the executive with good reason or termination by the Company without cause. For additional details regarding the Severance Plan, please see “Potential Payments Upon Termination or Change in Control” on page 57. Separation benefits include cash payments and other benefits in an amount the Company believes is appropriate, taking into account the time it is expected to take a separated executive to find another job. The Company requires a general release in connection with the individual separation agreements. We consider it likely that it will take more time for higher-level employees to find new employment commensurate with their prior experience, and therefore senior management generally are paid severance for a longer period. Additional payments may be approved by the Committee in some circumstances as a result of negotiation with executives, especially where the Company desires particular non-disparagement, cooperation with litigation, non-competition and non-solicitation terms. The Company’s 2023 Stock Incentive Plan and equity compensation awards granted to the NEOs contain change in control and termination provisions. In general, these arrangements provide for benefits upon a termination of such executive’s employment in connection with a change in control. Accelerated vesting of equity-based awards is generally triggered when a change in control event occurs and either the acquiring or surviving entity fails to assume or continue the stock-based award or the executive is involuntarily terminated, other than for disability, cause or gross misconduct, within a certain period of time after the effective date of the change of control event. These arrangements are intended to preserve morale and productivity and encourage retention in the face of the disruptive impact of a change in control of the Company. Based on a competitive analysis of the severance and change in control arrangements maintained by the companies in the Herbalife Peer Group, the Committee believes that these benefits are customary among the Herbalife Peer Group for executives in similar positions. Please refer to the discussion on page 57 under “Potential Payments Upon Termination or Change in Control” for a more detailed discussion of our severance and change in control arrangements. The Company has provided these benefits to the NEOs to allow them to focus on the value of strategic alternatives to shareholders without concern for the impact on their continued employment, as each of their offices is at heightened risk of turnover in the event of a change in control. We believe the severance and change of control benefits strike a balance between providing sufficient protections for the NEO while still providing post-termination compensation that we consider reasonable and in the interests of the Company and our shareholders.
Michael Johnson
Michael Johnson In December 2022, Michael O. Johnson became the Company’s Chairman and Chief Executive Officer, and in connection therewith, received 346,020 time-based stock units (the “2022 CEO RSU Award”) and 783,699 stock appreciation rights (the “2022 CEO SARs Award” and, together with the 2022 CEO RSU Award, the “2022 CEO Equity Awards”) pursuant to the Company’s 2014 Plan. On January 3, 2024, the Company and the Company’s wholly-owned subsidiary, Herbalife International America, Inc. (“HIAI”), entered into a new employment agreement with Mr. Johnson as the Company’s Chairman and Chief Executive Officer (the “CEO Employment Agreement”). The CEO Employment Agreement has a term through December 31, 2024. The payments and benefits to which Mr. Johnson is entitled under the CEO Employment Agreement include (i) annual base salary of $1,280,000, (ii) eligibility for an annual bonus targeted at $1,920,000 (with a maximum bonus of 300% of target), and (iii) equity incentive awards having a grant date fair value equal to $8,000,000, of which 50% was granted in the form of
Michael Johnson
time-based stock units (together with the 2022 CEO RSU Award, the “CEO RSU Awards”) and 50% was granted in the form of stock appreciation rights pursuant to the 2023 Plan (together with the 2022 CEO SARs Award the “CEO SARs Awards” and, together with the 2022 CEO Equity Awards and the CEO RSU Awards, the “CEO Equity Awards”). Mr. Johnson is not entitled to separate compensation in respect of his service as a member of the Board while serving as the Chief Executive Officer. The CEO Equity Awards vests in two installments, 50% on the first anniversary of the date on which they were granted (the “Grant Date”), and 50% on the earlier of the second anniversary of the date on which they were granted, or the date on which a new non-interim Chief Executive Officer has been appointed by the Board; provided that, in no instance shall any vesting of the CEO Equity Awards occur prior to the one year anniversary of Grant Date. The CEO SARs Awards have a ten-year term. Notwithstanding the foregoing, if (i) Mr. Johnson voluntarily resigns as Chief Executive Officer prior to December 31, 2024 without a new non-interim Chief Executive Officer having been appointed by the Board, the CEO Equity Awards will be forfeited; (ii) Mr. Johnson is terminated as Chief Executive Officer or as a member of the Board without “cause” (as defined in the applicable award agreement) or is not re-elected or nominated by the Company for election to the Board, then, subject to his execution and non-revocation of a general release of claims in favor of the Company, the CEO RSU Awards shall immediately vest in full and a pro-rata portion of the CEO SARs Awards will immediately vest based on the number of full months Mr. Johnson was employed and/or providing service as a member of the Board during the applicable vesting period; or (iii) Mr. Johnson is involuntarily terminated from his position as Chief Executive Officer and/or as a member of the Board within twenty-four (24) months following a “change in control” (as defined in the 2023 Plan), the CEO Equity Awards will be subject to acceleration as provided in Section 15(c) of the 2023 Plan. Mr. Johnson is not eligible to participate in the Severance Plan.
Compensation advisor
Compensation advisor The Committee is authorized by its charter to retain independent compensation consultants and other advisors. In 2023, the Committee engaged Meridian Compensation Partners LLC to serve as its independent consultant and to assist in evaluating our executive compensation programs and in setting executive officer compensation. Meridian reports directly to the Committee. During its period of engagement in 2023, Meridian regularly participated in Committee meetings and provided analyses and recommendations that inform the Committee’s decisions; identified peer group companies for competitive market comparisons; evaluated market pay data and competitive-position benchmarking; provided analyses and inputs on program structure, performance measures, and goals; provided updates on market trends and the regulatory environment as it relates to executive compensation; reviewed various management proposals presented to the Committee related to executive and board compensation; and worked with the Committee to validate and strengthen the pay-for-performance relationship. The Committee assessed the independence of Meridian. In its assessment, the Committee considered the following factors specified in the NYSE listing standards: (i) the provision of other services by the consulting firm to the Company; (ii) the amount of fees paid as a percentage of the total revenue of the consulting firm; (iii) the policies and procedures of the consulting firm that are designed to prevent conflicts of interest; (iv) any business or personal relationship of the consultant with a member of the Committee; (v) any stock of the Company owned by the consultant; and (vi) any business or personal relationship of the consultant or consulting firm with an executive officer of the Company. Meridian provided the Committee with confirmation of its independent status. Based on this evaluation, the Committee has determined that Meridian met the criteria for independence and that its work with the Committee during fiscal year 2023 did not raise any conflict of interest.
Peer group
Peer group Our level of compensation for our NEOs was compared to compensation paid by the Herbalife Peer Group. The criteria used to identify the Herbalife Peer Group were: (1) principal operations in the U.S. with an international presence — we operate in 95 markets around the world in a highly regulated business where approximately 78% of our net sales for the year ended December 31, 2023, were generated outside of the United States; (2) financial scope — our management talent should be similar to that of companies of a similar size in terms of revenues and market capitalization; (3) industry — we compete for talent with other companies in consumer product related industries; and (4) common “peer of peers” — we examined companies that are most frequently considered peers by Herbalife’s peers. Annually, the Committee reviews the peer group and updates the group as appropriate.
Peer group
| Executive compensation | 49 |
Peer group
With respect to pay decisions regarding 2023 NEO compensation, the industry peer group was comprised of the fifteen (15) companies listed below. All of the peer companies were within the range of approximately 25% and 220% of Herbalife’s trailing twelve-month revenues at the time the peer group was established in July 2023. The peer group median revenue of $5.2 billion and median market capitalization of $6.7 billion, in each case at the time the Herbalife Peer Group was established, were comparable to those of Herbalife. During this period, the Herbalife Peer Group consisted of the following:
Peer group
| Company | Industry | Revenue (last twelve months)* ($ millions) | Market capitalization* ($ millions) | | Campbell Soup Co | Packaged Foods and Meats | $9,300 | $12,887 | | Church & Dwight Inc. | Household Products | $5,868 | $23,298 | | The Clorox Company | Household Products | $7,310 | $17,690 | | Conagra Brands, Inc. | Packaged Foods and Meats | $12,172 | $13,699 | | Coty Inc. | Personal Care Products | $6,010 | $11,075 | | Edgewell Personal Care Co | Personal Care Products | $2,271 | $1,840 | | Hain Celestial Group Inc. | Packaged Foods and Meats | $1,782 | $982 | | International Flavors & Fragrances | Specialty Chemicals | $11,479 | $20,670 | | The J.M. Smucker Company | Packaged Foods and Meats | $8,195 | $13,414 | | McCormick & Co, Inc. | Packaged Foods and Meats | $6,662 | $18,352 | | Nu Skin Enterprises Inc. | Personal Care Products | $1,969 | $960 | | Post Holdings Inc. | Packaged Foods and Meats | $7,391 | $5,330 | | Spectrum Brands Holdings, Inc. | Household Products | $2,898 | $2,817 | | TreeHouse Foods, Inc. | Packaged Foods and Meats | $3,432 | $2,292 | | Tupperware Brands Corp | Housewares and Specialties | $1,304 | $93 | | Herbalife Ltd. | Personal Care Products | $5,121 | $1,181 | | Percentile Rank | | 49% | 13% |
Peer group
| * Effective as of December 31, 2023 (with information available as of March 4, 2024). |
Peer group
The Committee reviewed the Herbalife Peer Group in July 2023, and approved the addition of BellRing Brands, Inc. and Medifast, Inc. to the Peer Group, which is effective for 2024 pay decisions.
Peer group
| 50 | Executive compensation |
2023 Summary compensation table
2023 Summary compensation table The following table sets forth the total compensation for the fiscal years ended December 31, 2023, 2022 and 2021, of our NEOs.
2023 Summary compensation table
| Name and principal position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option awards ($)(1) | Non-equity incentive plan compensation ($)(2) | All other compensation ($) | Total ($) | | Michael O. Johnson* | 2023 | 1 | 250,000 | — | — | 684,657 | $341,907(3) | 1,276,565 | | Chairman and Chief | 2022 | 1 | | 5,134,987 | 5,000,000 | — | 204,030 | 10,339,018 | | Executive Officer | 2021 | — | | — | — | — | — | — | | Alexander Amezquita | 2023 | 610,577 | | 349,996 | 1,049,995 | 277,478 | 23,704(4) | 2,311,750 | | Chief Financial Officer | 2022 | 540,385 | | 2,299,959 | — | — | 21,972 | 2,862,316 | | | 2021 | 480,769 | | 599,942 | — | 344,897 | 20,411 | 1,446,019 | | Henry Wang* | 2023 | 590,385 | | 349,996 | 1,049,995 | 265,399 | 15,534(5) | 2,271,309 | | Executive Vice | 2022 | 550,000 | | 2,299,959 | — | — | 13,734 | 2,863,693 | | President, General | | | | | | | | | | Counsel and | | | | | | | | | | Corporate Secretary | — | — | | — | — | — | — | — | | Frank Lamberti* | 2023 | 605,096 | | 349,989 | 1,049,990 | 213,308 | 11,259(6) | 2,229,642 | | Chief Operating | 2022 | 566,500 | | 1,849,960 | — | — | 14,409 | 2,430,869 | | Officer | — | — | | — | — | — | — | — | | Ibelis Montesino* | 2023 | 590,385 | | 249,978 | 749,992 | 219,981 | 106,856(7) | 1,917,912 | | Executive Vice | — | | — | — | — | — | — | — | | President, Chief of Staff | — | | — | — | — | — | — | — |
2023 Summary compensation table
| * Mr. Johnson was not an employee or member of the Board in 2021. Messrs. Wang and Lamberti were NEOs for the first time in 2022. Accordingly, only information relating to Messrs. Wang and Lamberti’s fiscal year 2022 and 2023 compensation is included in the compensation tables and related discussions of NEO compensation. Ms. Montesino was a NEO for the first time in 2023. Accordingly, only information relating to Ms. Montesino’s fiscal year 2023 compensation is included in the compensation tables and related discussions of NEO compensation. |
2023 Summary compensation table
| 52 | Executive compensation |
2023 Summary compensation table
| (1) Amounts represent the aggregate grant date fair value of the relevant award(s) presented in accordance with FASB ASC Topic 718, “Compensation — Stock Compensation.” See Note 9 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, for a discussion of the relevant assumptions used in calculating these amounts pursuant to FASB ASC Topic 718. |
2023 Summary compensation table
| (2) Incentive plan amounts determined as more specifically discussed under “— Compensation discussion and analysis — Annual incentive awards & long-term incentive program — Targets and award determination.” |
2023 Summary compensation table
| (3) Amounts disclosed in this column for Mr. Johnson for 2023 relate solely to non-business use of a private aircraft. The Company determines the aggregate incremental cost of personal usage of Company chartered aircraft based on actual costs or charges incurred. For income tax purposes, the amounts included in Mr. Johnson’s income are calculated based on the standard industry fare level valuation method. |
2023 Summary compensation table
| (4) Amounts disclosed in this column for Mr. Amezquita for 2023 include: (i) $9,820 contributed to the Senior Executive Deferred Compensation Plan, which represents the Company’s matching contribution earned in 2023 but credited to Mr. Amezquita’s account in 2024; (ii) $684 in Company-paid premiums for executive life insurance; and (iii) $13,200 in Company paid 401(k) matching contributions. |
2023 Summary compensation table
| (5) Amounts disclosed in this column for Mr. Wang for 2023 include: (i) $684 in Company-paid premiums for executive life insurance; and (ii) $14,850 in Company paid 401(k) matching contributions. |
2023 Summary compensation table
| (6) Amounts disclosed in this column for Mr. Lamberti for 2023 include: (i) $684 in Company-paid premiums for executive life insurance; and (ii) $10,575 in Company paid 401(k) matching contributions. |
2023 Summary compensation table
| (7) Amounts disclosed in this column for Ms. Montesino for 2023 include: (i) $91,113 contributed to the Senior Executive Deferred Compensation Plan, which represents the Company’s matching contribution earned in 2023 but credited to Ms. Montesino’s account in 2024; (ii) $684 in Company-paid premiums for executive life insurance; (iii) $9,267 in Company paid 401(k) matching contributions and (iv) $4,000 in service award and $1,793 in tax gross-ups related thereto. |
2023 Grants of plan-based awards
2023 Grants of plan-based awards The following table sets forth all grants of plan-based awards made to the NEOs during the fiscal year ended December 31, 2023. For further discussion regarding the grants see “— Compensation discussion and analysis — Long-term incentive awards” on page 46.
2023 Grants of plan-based awards
| NEO | Grant Date(1) | Estimated future payouts under non-equity incentive plan awards(2) | | Estimated future payouts under equity incentive plan awards | All other stock awards: number of shares or stock units(1) (#) | All other option awards: number of securities underlying options (1) (#) | Exercise or base price of SAR Awards ($/share) | Grant date fair value of Stock and SAR Awards ($) | | | | Target ($) | Maximum ($) | Target (#) | | | | | | Michael O. Johnson | | 1,200,000 | 684,657 | | | | | | | Alexander Amezquita | | 486,336 | 277,478 | | | | | | | | 05/04/2023 | | | | 25,735 | | — | 349,996 | | | 05/04/2023 | | | | — | 172,413 | 13.60 | 1,049,995 | | Henry Wang | | 465,164 | 265,399 | | | | | | | | 05/04/2023 | | | | 25,735 | | — | 349,996 | | | 05/04/2023 | | | | — | 172,413 | 13.60 | 1,049,995 | | Frank Lamberti | | 427,436 | 213,308 | | | | | | | | 05/04/2023 | | | | 11,948 | | — | 162,493 | | | 05/04/2023 | | | | — | 80,049 | 13.60 | 487,498 | | | 08/04/2023 | | | | 10,075 | | — | 187,496 | | | 08/04/2023 | | | | — | 64,432 | 18.61 | 562,491 | | Ibelis Montesino | | 385,562 | 219,981 | | | | | | | | 05/04/2023 | | | | 11,948 | | — | 162,493 | | | 05/04/2023 | | | | — | 80,049 | 13.60 | 487,498 | | | 08/04/2023 | | | | 4,701 | | — | 87,486 | | | 08/04/2023 | | | | — | 30,068 | 18.61 | 262,494 |
2023 Grants of plan-based awards
| (1) The Committee approved the annual equity awards in May 2023. In August 2023, the Committee approved separate grants of 64,432 SARs and 10,075 RSUs to Mr. Lamberti and 30,068 SARs and 4,701 RSUs to Ms. Montesino. All equity grants reflected in this table were made under the 2023 Plan. Grant values are set by the Committee and may vary slightly from amounts set forth in the 2023 Summary Compensation Table due in part to rounding down to the nearest whole unit in calculating the number of units granted on the grant date. |
2023 Grants of plan-based awards
| Executive compensation | 53 |
2023 Grants of plan-based awards
| (2) Calculated using prorated salaries due to NEO salary changes during the year, as further outlined under “Base Salaries” above. |
Narrative disclosure to summary compensation table and grants of plan-based awards
Narrative disclosure to summary compensation table and grants of plan-based awards Equity Awards. In fiscal year 2023, we granted each of our NEOs long-term performance-based compensation in the form of SARs and RSUs. All equity awards shown in this table were granted under the 2023 Plan. SARs awarded to our NEOs in fiscal year 2023 will vest, subject to continued employment, over 3-years. RSUs awarded to our NEOs in fiscal year 2023 will vest, subject to continued employment over 3-years. The circumstances pursuant to which the equity awards have accelerated vesting are described below in the section entitled “Potential Payments Upon Termination or Change in Control” on page 57. Non-Equity Incentive Plan Compensation Awards. These amounts reflect the potential threshold, target and maximum annual incentive bonus awards payable to our NEOs as annual incentive bonuses for fiscal year 2023. Target bonus amounts assume achievement of the objective goals at the target amounts. Maximum bonus amounts assume achievement of the objective goals at the maximum for a payout of 200% of target. The NEOs received actual bonuses for fiscal year 2023 in the amounts shown in the “Non-Equity Incentive Plan Compensation” column of the 2023 Summary Compensation Table.
Narrative disclosure to summary compensation table and grants of plan-based awards
| 54 | Executive compensation |
Outstanding equity awards at 2023 fiscal year-end
Outstanding equity awards at 2023 fiscal year-end The following table sets forth equity awards of the NEOs outstanding as of December 31, 2023.
Outstanding equity awards at 2023 fiscal year-end
| NEO | Grant Date | Option/Stock Appreciation Right Awards | | | | Stock Awards | | | | | Number of securities underlying unexercised options/SARs exercisable (#) | Equity incentive plan awards: number of securities underlying unexercised unearned options/SARs (#) | Exercise Price ($) | Expiration date | Equity incentive plan awards: number of unearned stock units or other rights that have not vested (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($) | | Michael O. Johnson | 12/22/2022 | | 783,699(1) | 14.45 | 12/22/2032 | | | | | 12/22/2022 | | | | | 173,010(2) | $2,640,133 | | Alexander Amezquita | 02/19/2021 | | | | | 2,180(3) | $33,267 | | | 02/19/2021 | | | | | 1,552(4) | $23,684 | | | 03/03/2021 | | | | | 455(3) | $6,943 | | | 03/03/2021 | | | | | 324(4) | $4,944 | | | 02/25/2022 | | | | | 22,522(5) | $343,686 | | | 02/25/2022 | | | | | 6,006(4) | $91,652 | | | 12/09/2022 | | | | | 94,637(6) | $1,444,161 | | | 05/04/2023 | | 172,413(7) | 13.60 | 05/04/2033 | | | | | 05/04/2023 | | | | | 25,735(8) | $392,716 | | Henry Wang | 05/09/2016 | 9,040 | | 31.255 | 05/09/2026(9) | | | | | 02/27/2017 | 12,288 | | 28.595 | 02/27/2027(9) | | | | | 02/19/2021 | | | | | 3,488(3) | $53,227 | | | 02/19/2021 | | | | | 2,483(4) | $37,891 | | | 02/25/2022 | | | | | 22,522(5) | $343,686 | | | 02/25/2022 | | | | | 6,006(4) | $91,652 | | | 12/09/2022 | | | | | 94,637(6) | $1,444,161 | | | 05/04/2023 | | 172,413(7) | 13.60 | 05/04/2033 | | | | | 05/04/2023 | | | | | 25,735(8) | $392,716 | | Frank Lamberti | 04/30/2014 | 7,217 | | 29.990 | 04/30/2024(9) | | | | | 03/02/2015 | 14,070 | | 15.220 | 03/02/2025(9) | | | | | 02/29/2016 | 12,540 | | 27.375 | 02/28/2026(9) | | | | | 05/09/2016 | 30,231 | | 31.255 | 05/09/2026(9) | | | | | 02/27/2017 | 31,779 | | 28.595 | 02/27/2027(9) | | | | | 02/19/2021 | | | | | 2,834(3) | $43,247 | | | 02/19/2021 | | | | | 2,018(4) | $30,795 | | | 02/25/2022 | | | | | 13,308(5) | $203,080 | | | 02/25/2022 | | | | | 3,549(4) | $54,158 | | | 12/09/2022 | | | | | 94,637(6) | $1,444,161 | | | 05/04/2023 | | 80,049(7) | 13.60 | 05/04/2033 | | | | | 05/04/2023 | | | | | 11,948(8) | $182,326 | | | 08/04/2023 | | 64,432(7) | 18.61 | 08/04/2033 | | | | | 08/04/2023 | | | | | 10,075(8) | $153,745 | | Ibelis Montesino | 02/19/2021 | | | | | 4,966(4) | $75,781 | | | 02/25/2022 | | | | | 8,736(4) | $133,311 | | | 11/02/2022 | | | | | 11,389(4) | $173,796 | | | 12/09/2022 | | | | | 94,637(6) | $1,444,161 | | | 05/04/2023 | | 80,049(7) | 13.60 | 05/04/2033 | | | | | 05/04/2023 | | | | | 11,948(8) | $182,326 | | | 08/04/2023 | | 30,068(7) | 18.61 | 08/04/2033 | | | | | 08/04/2023 | | | | | 4,701(8) | $71,737 |
Outstanding equity awards at 2023 fiscal year-end
| (1) Subject to employment agreement, these SARs will vest 100% on the second anniversary of the grant date. |
Outstanding equity awards at 2023 fiscal year-end
| (2) Subject to employment agreement, these RSUs vest annually, 50% on the first anniversary and 50% on the second anniversary of the grant date. |
Outstanding equity awards at 2023 fiscal year-end
| (3) Subject to continued employment, these PSUs vest 100% on December 31, 2023, provided that the applicable performance criteria are met. This figure reflects the number of PSUs that were actually received or acquired in February 2024 following certification of the performance thresholds by the Compensation Committee. |
Outstanding equity awards at 2023 fiscal year-end
| (4) Subject to continued employment, these RSUs vest annually, 20% on the first anniversary, 20% on the second anniversary and 60% on the third anniversary of the grant date. |
Outstanding equity awards at 2023 fiscal year-end
| (5) Subject to continued employment, these PSUs vest 100% on December 31, 2024; provided that the applicable performance criteria are met. The number of PSUs reflected assumes a target level of performance. |
Outstanding equity awards at 2023 fiscal year-end
| (6) Subject to continued employment, these RSUs vest 100% on the second anniversary of the grant date. |
Outstanding equity awards at 2023 fiscal year-end
| Executive compensation | 55 |
Outstanding equity awards at 2023 fiscal year-end
| (7) Subject to continued employment, these SARs vest 1/3 each year on the anniversary of the grant date for three years. |
Outstanding equity awards at 2023 fiscal year-end
| (8) Subject to continued employment, these RSUs vest 1/3 each year on the anniversary of the grant date for three years. |
Outstanding equity awards at 2023 fiscal year-end
| (9) These SARs were fully vested as of December 31, 2023. |
2023 Option exercises and stock vested
2023 Option exercises and stock vested The following table sets forth information with respect to Common Shares acquired upon the exercise of stock options/SARs and the vesting of stock awards of the NEOs during the fiscal year ended December 31, 2023.
2023 Option exercises and stock vested
| NEO | Option awards | | Stock awards | | | | Number of shares acquired on exercise (#) | Value realized on exercise ($) | Number of shares acquired on vesting (#) | Value realized on vesting ($) | | Michael O. Johnson | — | — | 178,397 | $2,686,288 | | Alexander Amezquita | — | — | 9,422(1) | $163,784 | | Henry Wang | — | — | 22,484(1) | $392,880 | | Frank Lamberti | — | — | 71,998(1) | $1,165,682 | | Ibelis Montesino | — | — | 23,123 | $401,633 |
2023 Option exercises and stock vested
| (1) Number includes PSUs that vested as of December 31, 2022, but were not received or acquired until February 2023 following certification of the performance thresholds by the Compensation Committee once the metrics results were available. |
2023 Non-qualified deferred compensation table
2023 Non-qualified deferred compensation table The following table sets forth all non-qualified deferred compensation of the NEOs for the fiscal year ended December 31, 2023 pursuant to the Herbalife International of America, Inc. Senior Executive Deferred Compensation Plan, effective January 1, 1996, as amended and restated, or the Senior Executive Plan.
2023 Non-qualified deferred compensation table
| NEO | Executive contributions in last FY ($) | Company contributions in last FY ($)(1) | Aggregate earnings in last FY ($) | Aggregate withdrawals/ distribution ($) | Aggregate balance at last FYE ($) | | Michael O. Johnson | — | — | — | — | — | | Alexander Amezquita | 24,423 | 9,820 | 8,774 | — | 81,725(2) | | Henry Wang | — | — | — | — | — | | Frank Lamberti | — | — | 15,294 | — | 121,023 | | Ibelis Montesino | 23,615 | 91,113 | 64,674 | — | 487,937 |
2023 Non-qualified deferred compensation table
| (1) Amounts reported as compensation in “All Other Compensation” in the “2023 Summary Compensation Table”. Each amount represents contributions earned in 2023 but credited to the NEO’s account in 2024 and thus not part of the “Aggregate balance at last FYE”. |
2023 Non-qualified deferred compensation table
| (2) Includes $50,655 for Mr. Amezquita for the reported years 2021 to 2022, which have been included in the Summary Compensation Table of the Company’s previously filed proxy statements. |
2023 Non-qualified deferred compensation table
| 56 | Executive compensation |
2023 Non-qualified deferred compensation table
Non-qualified deferred compensation plans. We maintain the Senior Executive Plan, which covers all eligible employees at the rank of Senior Vice President and higher. The Senior Executive Plan is unfunded and benefits are paid from the Company’s general assets, except that the Company has contributed amounts to a “rabbi trust” which assets will be used to pay benefits if we remain solvent, but can be reached by our creditors if we become insolvent. The Senior Executive Plan allows eligible employees, who are selected by the administrative committee that manages and administers the plan, or the Deferred Compensation Committee, to elect annually to defer up to 75% of their annual base salary and up to 100% of their annual bonus for each calendar year, or the Annual Deferral Amount. We make matching contributions on behalf of each participant in the Senior Executive Plan, which matching contributions are 100% vested at all times. Effective January 1, 2013, the matching contribution under the Senior Executive Plan was changed to 3.5% of a participant’s annual base salary in excess of the qualified plan annual compensation limit and the amount by which deferrals reduce 401(k) eligible pay below the IRS limit. Each participant in the Senior Executive Plan may determine how his or her Annual Deferral Amount and matching contributions, if any, will be deemed to be invested by choosing among several investment funds or indices designated by the Deferred Compensation Committee. The Senior Executive Plan, however, does not require us to actually acquire or hold any investment fund or other assets to fund the Senior Executive Plan. The entire interest of each participant in the Senior Executive Plan is always fully vested and non-forfeitable. In connection with a participant’s election to defer an Annual Deferral Amount, the participant may also elect to receive a “Scheduled In-Service Withdrawal” equal to the Annual Deferral Amount and the matching contributions, if any, attributable thereto plus earnings, and shall be payable two or more years after the end of the plan year in which the Annual Deferral Amount is actually deferred. As of January 2004, the Senior Executive Plan was amended to allow for deferral of the short-term payout date if the deferral is made within the time period specified therein. Subject to the short-term payout provision and specified exceptions for unforeseeable financial emergencies, a participant may not withdraw, without incurring a ten percent (10%) withdrawal penalty, all or any portion of his or her account under the Senior Executive Plan prior to the date that such participant either (1) is determined by the Deferred Compensation Committee to have incurred permanent and total disability or (2) dies or otherwise terminates employment.
Potential payments upon termination or change in control
Potential payments upon termination or change in control The information below describes certain compensation that would have become payable under existing plans and contractual arrangements assuming a termination of employment and/or change in control had occurred on December 31, 2023 based upon the closing price of a Common Share on the NYSE on December 29, 2023 of $15.26, given the NEOs’ compensation and service levels as of such date. In addition to the benefits described below, upon any termination of employment, each of the NEOs would also be entitled to the amount shown in the column labeled “Aggregate Balance at Last FYE” in the “2023 Non-Qualified Deferred Compensation” table.
Outstanding Equity Awards
Outstanding Equity Awards Pursuant to each of the NEO’s RSU award agreements granted prior to 2022, the Committee has the discretion to accelerate the vesting of RSUs upon a Change in Control, as defined in the 2014 Plan. Pursuant to each of the NEO’s RSU award agreements granted in 2023, and each of the NEO’s PSU award agreements, as applicable, in the event of their respective involuntary termination of employment within twenty-four months following a Change in Control, as defined in the 2023 Plan, or if the acquiring entity fails to assume or continue the stock-based award: (i) in the case of the RSUs, such unvested RSUs will immediately vest, and (ii) in the case of the PSUs, each will have the right to receive a payment based on performance through a date determined by the Committee prior to the Change in Control, unless such performance cannot be determined, in which case each will have the right to receive a payment equal to the target amount payable. Pursuant to Mr. Johnson’s RSU award agreement granted in May 2022 in connection with his Board service, (i) upon the occurrence of a Change in Control, such award will be accelerated and become vested as of immediately prior to the consummation of the Change in Control, and (ii) upon any termination of Mr. Johnson’s service as a member of the Board by reason of Participant’s death or disability, all unvested RSUs shall vest as of the date of such termination of service.
Pay ratio disclosure
Pay ratio disclosure In August 2015, pursuant to a mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC adopted a rule requiring annual disclosure of the ratio of the median employee’s annual total compensation to the total annual compensation of the principal executive officer. For purposes of determining the required ratio, in order to better reflect our employee compensation practices, annual total compensation for our median employee and for our CEO includes the dollar value of non-discriminatory medical, dental and vision benefits, group life insurance and employer contributions for disability insurance coverage and our employee assistance program, which are not required to be reported as compensation for our CEO in the 2023 Summary Compensation Table included in this Proxy Statement. Our median employee’s annual total compensation for 2023 was $39,266. Michael Johnson, who is the Company’s Chairman and CEO, had an annualized total compensation in 2023 of $1,276,565. As a result, we estimate that Michael Johnson’s 2023 compensation is approximately 33 times that of our median employee. The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. The reported pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. For these purposes, we identified the median compensated employee using base salary and bonus paid from October 1, 2022 through September 30, 2023, which we annualized for any employee who did not work for the entire year. We identified our employee population as of October 1, 2023 based on our Human Resources records.
Pay ratio disclosure
| Executive compensation | 61 |
Pay v. Performance
| (3) Amounts reported in this column represent the compensation actually paid to Dr. Agwunobi and Mr. Johnson, based on respective total compensation reported in the Summary Compensation Table for the indicated fiscal years and adjusted as shown in the table below: |
Pay v. Performance
| (4) Amounts reported in this column represent the compensation actually paid to the Company’s Named Executive Officers other than the individuals serving as principal executive officer in the indicated fiscal year, based on the average total compensation for such Named Executive Officers reported in the Summary Compensation Table for the indicated fiscal year and adjusted as shown in the table below: |
Indemnification of directors and officers
Indemnification of directors and officers The Company is a Cayman Islands exempted company incorporated with limited liability. As such, it is governed by the laws of the Cayman Islands with respect to the indemnification provisions. Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. The Articles provide for indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such, except in the case of (a) any fraud or dishonesty of such director or officer, (b) such director’s or officer’s conscious, intentional or willful breach of his or her obligation to act honestly, lawfully and in good faith with a view to the best interests of the Company or (c) any claims or rights of action to recover any gain, personal profit or other advantage to which the director or officer is not legally entitled. The Company has entered into an indemnification agreement with each of its directors and certain of its officers to supplement the indemnification protection available under the Articles. These indemnity agreements generally provide that the Company will indemnify the parties thereto to the fullest extent permitted by law. In addition to the indemnification provisions set forth above, the Company maintains insurance policies covering our directors and officers with respect to certain liabilities, including those arising under the Securities Act and the Exchange Act that might be incurred by any director or officer in his or her capacity as such. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to managers, officers or persons controlling us pursuant to the foregoing, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Indemnification of directors and officers
| 68 | Certain relationships and related transactions |