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Herbalife Ltd. (NYSE:HLF) has entered into a new employment agreement with Michael O. Johnson, ensuring his continuation as Chief Executive Officer through December 31, 2025. This agreement, effective as of February 6, 2025, includes an annual base salary of $1.28 million, potential annual bonuses, and significant equity incentives. The announcement comes as the company, currently valued at $516 million, trades near its 52-week low of $5.13. According to InvestingPro analysis, Herbalife appears undervalued based on its Fair Value metrics, with the stock showing a strong free cash flow yield.
Under the terms of the CEO Employment Agreement, Johnson’s annual bonus has a target of $1.92 million, with the potential to reach up to 300% of his base salary. Additionally, he is set to receive an equity incentive award valued at $8 million, which aligns with the equity incentives granted to the company’s Executive Vice Presidents under Herbalife’s Amended and Restated 2023 Stock Incentive Plan. With the company’s next earnings report due on February 19, InvestingPro subscribers can access detailed analysis and 12 additional ProTips to better understand the company’s financial position.
The equity awards will vest over two installments: half on the first anniversary of the grant date and the remaining half on January 1, 2027, or upon the employment commencement date of a new non-interim Chief Executive Officer in 2026, contingent on continued service. The vesting of any performance-based stock units (PSUs) will be linked to cumulative goals set for fiscal years 2025 and 2026.
Furthermore, Johnson is entitled to personal use of private aircraft, with the company covering costs up to $500,000 based on incremental expenses. The agreement specifies various scenarios that may affect the acceleration or forfeiture of equity awards, including voluntary resignation, termination without cause, or a change in control within the company.
The details of this agreement, which will be included in Herbalife’s Annual Report on Form 10-K for the year ending December 31, 2024, highlight the company’s commitment to its executive leadership continuity. This information is based on a press release statement.
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