Employee Compensation Plans
|12 Months Ended|
Dec. 31, 2019
|Postemployment Benefits [Abstract]|
|Employee Compensation Plans||
6. Employee Compensation Plans
In the United States, the Company maintains a profit sharing plan pursuant to Sections 401(a) and (k) of the Internal Revenue Code of 1986, as amended, or the Code. The plan is available to substantially all employees who meet the length of service requirements. The Company’s contribution expense relating to this profit sharing plan was $5.2 million, $5.7 million, and $4.8 million during the years ended December 31, 2019, 2018, and 2017, respectively.
The Company has employees in international countries that are covered by various deferred compensation plans. These plans are administered based upon the legal requirements in the countries in which they are established. The Company’s compensation expenses relating to these plans were $7.6 million, $6.6 million, and $6.4 million for the years ended December 31, 2019, 2018, and 2017, respectively.
The Company has non-qualified deferred compensation plans for select groups of management: the Herbalife Management Deferred Compensation Plan and the Herbalife Senior Executive Deferred Compensation Plan. The matching contribution was 3.5% of a participant’s annual base salary in excess of the Qualified Plan annual compensation limit and the amount by which deferrals reduce 401(k) eligible pay below the IRS limit.
Each participant in either of the non-qualified deferred compensation plans discussed above has, at all times, a fully vested and non-forfeitable interest in each year’s contribution, including interest credited thereto, and in any Company matching contributions, if applicable. In connection with a participant’s election to defer an annual deferral amount, the participant may also elect to receive a short-term payout, equal to the annual deferral amount plus interest. Such amount is payable in five or more years from the first day of the year in which the annual deferral amount is actually deferred.
The total for the two non-qualified deferred compensation plans, excluding participant contributions, was an expense of $9.4 million for the year ended December 31, 2019, a benefit of $2.7 million for the year ended December 31, 2018, and an expense of $6.7 million for the year ended December 31, 2017. The total long-term deferred compensation liability under the two deferred compensation plans was $62.4 million and $51.3 million as of December 31, 2019 and 2018, respectively, and is included in Other non-current liabilities within the Company’s consolidated balance sheets.
The deferred compensation plans are unfunded and their benefits are paid from the general assets of the Company, except that the Company has contributed to a “rabbi trust” whose assets will be used to pay the benefits if the Company remains solvent, but can be reached by the Company’s creditors if the Company becomes insolvent. The value of the assets in the “rabbi trust” was $38.9 million and $31.2 million as of December 31, 2019 and 2018, respectively, and is included in Other assets within the Company’s consolidated balance sheets.
The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef