Lululemon Ends Proxy Fight With Founder Chip Wilson, Adds Two Directors to Board
Lululemon Athletica has reached an agreement with founder Chip Wilson to end a proxy contest he initiated late last year as the company’s largest individual shareholder. The athletic apparel company will appoint two of Wilson’s nominees to its board, signaling a resolution to the months-long dispute.
Agreement Details
Under the terms announced Wednesday, Lululemon agreed to appoint former On co-chief executive officer Marc Maurer and former ESPN chief marketing officer Laura Gentile to its board. The company must also add a third director with “product and brand expertise in apparel” by October. In exchange, Wilson committed to refrain from publicly criticizing the company for approximately 18 months, among other provisions. Lululemon’s shares rose about 4% in early trading following the announcement.
Additional Provisions
Wilson had previously requested reimbursement for expenses incurred during his proxy contest. Instead, Lululemon will make a donation to Kitsilano Beach in Vancouver — where the company was founded — to support athletics, art, and landscaping. “We are pleased to reach this agreement with Chip Wilson, which allows Lululemon to focus on continuing to strengthen its performance,” said Marti Morfitt, Lululemon’s executive chair. “We look forward to welcoming Laura and Marc, who will bring additional perspective to our existing group of qualified directors. Lululemon now has a clear path forward for our incoming CEO, Heidi O’Neill, and our leadership team, as we continue to advance our strategies to foster strong brand health, reaccelerate growth, and deliver enhanced value for our shareholders.”
Board and Strategic Outlook
Wilson stated that the appointees, alongside strategic changes already implemented, “reflect meaningful progress toward restoring the company’s product-first vision and unlocking tremendous value for shareholders.” The agreement allows Lululemon to shift focus back to operations under incoming chief executive officer Heidi O’Neill.
Market Context
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