Herbalife CFO Looks to Change Investor Views After Years of Activist Pressure

Now Mr. Amezquita wants investors to think differently about Herbalife, with a focus on its revenue and profit, which have grown during the pandemic as some consumers pay more attention to their health. Herbalife said revenue climbed 15.6% to $1.41 billion during the quarter ended Dec. 31 compared with the prior-year period. Profit grew 30.2% during the latest quarter. Shares rose 1.8% over the course of 2020.

Mr. Amezquita wants to use tools such as virtual roadshows, investor conferences and conversations with analysts to recast the messaging around Herbalife as a growth company. It also plans to revise its investor website, the CFO said.

Mr. Ackman, the chief executive of Pershing Square Capital Management LP, in 2012 made a $1 billion short bet against Herbalife, a Los Angeles-based company that sells nutrition and weight-management products through a network of distributors. Mr. Ackman publicly criticized its business model, saying it was a pyramid scheme. The company rejected his claims.

Mr. Icahn, the chairman of Icahn Enterprises LP, then bought into the stock, at one point holding as much as 46 million shares, or about 26% of shares outstanding, Herbalife said.

Mr. Ackman’s push prompted the U.S. Federal Trade Commission to investigate Herbalife. The company in 2016 settled claims that it had misrepresented potential earnings for its distributors, stating that it disagreed with the FTC’s findings. Mr. Ackman in 2018 exited from his position after Herbalife’s stock had almost tripled since he started betting against the company.

Herbalife now is looking to attract more long-term, international investors, such as pension and sovereign-wealth funds, to stabilize its share price, Mr. Amezquita said. Certain hedge funds created significant volatility in the stock when they bought in, he said.

Among the company’s biggest shareholders are investment manager Capital Research & Management Co., hedge fund Renaissance Technologies LLC, index-fund investment giant Vanguard Group Inc. and hedge-fund manager Route One Investment Co. Vanguard declined to comment, while the other companies didn’t respond to requests for comment.

Companies’ efforts to develop or expand a shareholder base can take at least 12 to 18 months as executives educate investors about the business model, said Jim Rossman, head of shareholder advisory at investment bank Lazard Ltd.

Mr. Amezquita followed the company’s activist-investor saga closely. He joined Herbalife in 2017 as senior vice president of finance, strategy and investor relations after serving as a senior vice president at investment bank Moelis & Co. During that time, he advised Herbalife, among other clients.

In the CFO chair, Mr. Amezquita succeeded Bosco Chiu, who held the role from May 2018 until November 2020, when he became the company’s first chief risk officer. Before Mr. Chiu, John DeSimone, now Herbalife’s president, served as CFO from 2009 to 2018.

Mr. Icahn, who is estimated to have made more than $1 billion on his investment in Herbalife, keeps a roughly 6% stake in the company, worth about $400 million.

Herbalife improved its compliance systems under Mr. Icahn’s watch, he said. “In many cases, activists get involved at a company when there’s a problem, which was the case at Herbalife,” Mr. Icahn said. “The company has better controls than it did before we invested in it, and we believe we were meaningfully responsible for that.”

Herbalife’s Mr. Amezquita said Mr. Icahn had constructive ideas for the business.

Write to Mark Maurer at [email protected]