Last week I wrote about Barry Minkow's discovery that Herbalife (NASDAQ: HLF) president and COO Gregory Probert had lied on his resume, claiming to have an MBA that he didn't have.
Goldman Sachs analyst Simeon Gutman opined that the credentials flap didn't matter, and that he'd be surprised if Probert lost his job because "not only does he oversee many of Herbalife's day-to-day operations, he is often regarded as a key strategic thinker for the business."
Ooops. In a press release today Herbalife reported "record first quarter results." But wait! In a press release on April 4, Herbalife announced that "Herbalife Ltd. will release its first quarter 2008 financial results after the close of trading on the NYSE on Monday, May 5, 2008."
And now they decided to ambush investors with them today. What gives? Glad you asked. Buried at the bottom of the press release, we find this:
Chairman and CEO Michael O. Johnson accepted President and COO Gregory L. Probert's resignation effective April 30, 2008. The misstatement of Probert's academic credentials has been a matter under review by the board of directors. Given the company's unwavering commitment to the highest standards in business ethics, the company had no other choice but to accept the resignation.
The earlier than announced release of the first quarter results is a brazen -- and desperate -- effort at spin control.
I have to wonder: how much of a commitment to the "highest standards in business ethics" is Herbalife demonstrating when it buries bad news in quarterly results reported a week earlier than they said they would be?
I'll be interested in Mr. Gutman's feelings on the stock now that the company is without its "key strategic thinker."
As Herb Greenberg writes, "the beat goes on."
Herbalife slips president's resignation into earnings report
Posted May 1st 2008 2:11PM by Zac Bissonnette
Filed under: Management, Scandals
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Reader Comments (Page 1 of 1)
5-01-2008 @ 2:29PM
RICH BRULATO said...
How does someone get to the level of CEO without having to prove his credentials???
5-01-2008 @ 3:57PM
Bill Dollar said...
RICH BRULATO said...
How does someone get to the level of CEO without having to prove his credentials???
Hey this guy was only the COO! But getting lying on your resume is a no no and getting caught gets you fired unless of course you are Larry Ellison the founder of Oracle, and his bogus MBA turned out Ellison did not even have a undergratuate degree. Buty hey Larry is worth close to 20 plus billion dollars.
5-02-2008 @ 11:20AM
Hoxsie said...
Frankly, its too bad so much emphasis is placed on education and lists of degrees. The guy has performed, done the job well, so for Pete's sake forget about what happened a generation ago!
5-07-2008 @ 8:48AM
Karen said...
"Given the company's unwavering commitment to the highest standards in business ethics, the company had no other choice but to accept the resignation."
Yep, stuff happens but I know that in the end, Herbalife always follows a strict code of ethics. We are all sorry to see Greg go, he was definitely an asset to the company.
"Greg made substantial contributions to Herbalife," said Johnson. "The circumstances surrounding his resignation are disappointing but I am very pleased that Des Walsh has accepted an expanded role in the company."
But, given what we were told yesterday, the future is looking even brighter than before!
Karen Umstattd
Proud to be a member of Team Herbalife