Herbalife will name three Icahn nominees to its board of directors during its annual shareholder meeting in April. Activist investor Carl Icahn is the nutrition company’s largest shareholder with a 16.8 percent stake in Herbalife.
Tomorrow marks two weeks since Herbalife announced the Federal Trade Commission (FTC) would open a civil investigation into the company. The FTC inquiry comes 14 months into investor Bill Ackman’s campaign to discredit Herbalife’s business practices, an effort that has played out both on Wall Street and in Washington, D.C.
“Herbalife welcomes the inquiry given the tremendous amount of misinformation in the marketplace, and will cooperate fully with the FTC,” the company commented at the time. “We are confident that Herbalife is in compliance with all applicable laws and regulations.”
The inquiry follows closely upon Sen. Edward Markey’s (D-Mass.) written request that the FTC investigate Herbalife’s practices. The Boston Globe has since followed up on the Senator’s alleged Herbalife victims, some of whom say Markey’s office inflated their claims in his letters to regulators.
The Senator told the Globe that, while his staff was aware an FTC probe would potentially benefit Ackman’s short position on the company, that information was not relayed to Markey. The Senator’s spokeswoman would not divulge whether Markey conducted any of his own research before signing the letters.
Icahn has remained Herbalife’s strongest backer since the 78-year-old investor announced an initial 13 percent stake in the company in February 2013. The latest agreement will secure a total of five Icahn nominees to Herbalife’s 13-member board.
“We remain resolute in our commitment to the long-term success of Herbalife,” said Icahn in a statement. “We continue to have confidence in its board and management team, and believe in the company’s great potential. We thank the board for their trust in us and hope and believe our directors will enhance value and contribute to the long-term success of the company, as we have done at so many companies over the past decade.”