Herbalife COO Is Named Firm’s Acting President

Herbalife International Inc. named Chief Operating Officer Christopher Pair acting president and chief executive of the nutritional and diet products company Monday, a day after Mark Hughes, Herbalife’s founder and charismatic chairman, was found dead in his home.

Pair, who joined Herbalife in 1985, will head an executive team that will map out the company’s future even as news of Hughes’ death sunk in among stunned employees and distributors.

Hughes, 44, who is believed to have died of natural causes, was found in bed by family members at about 11 a.m. Sunday in his $25-million Malibu beachfront mansion. There was no indication of foul play, Los Angeles County Sheriff’s spokesman Sgt. Chuck Stringham said.

The county coroner had not yet determined the cause of death as of Monday afternoon and did not expect to draw any preliminary conclusions until at least today, spokesman Scott Carrier said.

Because of Hughes’ relatively young age, the coroner probably will conduct routine toxicology tests to determine whether drugs or alcohol played a role in his death, Carrier added.

His death closely followed an abandoned attempt to buy back the company he founded in 1980. The $510-million buyout plan, announced last September, collapsed in April, stymied by his inability to obtain financing. Hughes owned about 50% of the company.

Herbalife is a Los Angeles-based “multilevel marketer” that relies on a network of more than 100,000 independent distributors, most of them working part time, to pitch the company’s line of personal-care and weight-loss products to neighbors, co-workers and relatives. It has about 1,000 employees in Southern California.

Hughes spent his last days at home with family and celebrated his grandmother’s 84th birthday over the weekend, according to company officials.

He appeared to be in good health, having recovered from pneumonia caught on a recent trip to Japan, said Michael Rosen, an Herbalife executive vice president. Hughes suffered from asthma. But Rosen said he knew of no reason to suspect that asthma or any other medical problem would have led to the sudden death.

Who will run the company and where they will take it following 20 years of tight control by Hughes remains in question. Pair’s is an interim title and there was no word on when a permanent chairman and chief executive would be named.

“This guy was a guru as well as an astute businessperson. There are lots of problems at companies like this when the guru dies or retires,” said William Crookston, a USC business school professor who studies multilevel-marketing companies.

Sandy Hurley, a Canyon Country resident who works part time as an Herbalife saleswomen selling “just a couple thousand dollars’ worth” annually, had high admiration for Hughes.

“He gave people hope. He gave people a chance to lose weight, to improve their health and to start their own businesses,” Hurley said.

She said her network of distributors were “shocked and surprised” by news of Hughes’ death. “It is devastating.”

But some analysts believe that Herbalife would be able to smoothly survive the death of Hughes.

“There is enough senior management to continue the business even though he was the vision at the company,” said Scott Van Winkle, an analyst at Adams, Harkness & Hill in Boston.

Herbalife’s class A shares fell $1.19, or 12% to $8.69 on Nasdaq on Monday, in part because there was no longer a possibility that Hughes could engineer a buyout of the company, according to analysts.

Though its stock has fallen 38% this year, Herbalife has fared better than several of its rivals, according to Van Winkle of Adams, Harkness.

Herbalife saw its first-quarter sales rise 7.8% to $244 million. Earnings dipped slightly to $11.6 million after factoring out a charge taken by the company for expenses arising from Hughes’ aborted buyout.

Domestically, multilevel-marketing companies are struggling with changes in the U.S. economy. The hot job market has made it hard to recruit new distributors.

Hughes is survived by his wife, Darcy LaPier, son Alexander, two stepchildren and his father, Jack Reynolds. Voting control of Hughes shares will be held by the three trustees of the family trust, consisting of two senior officers of the company and his father.

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Times staff writer Mitchell Landsberg contributed to this report.