Key facts
- Lululemon shareholders elected three management-backed directors, including Chip Bergh.
- Two of founder Chip Wilson's nominees, Marc Maurer and Laura Gentile, were appointed as independent directors.
- The board now consists of 11 members.
- A third mutually agreed director will join the board by October 1.
- Founder Chip Wilson agreed to an 18-month standstill on public criticism.
- Heidi O'Neill will take over as CEO in September.
Lululemon shareholders have backed the company's board slate, solidifying a truce with founder Chip Wilson after a contentious proxy battle. The vote saw the election of three management-backed directors, including former Levi Strauss CEO Chip Bergh, alongside two of Wilson's nominees, Marc Maurer and Laura Gentile, as independent directors. This brings the total board strength to 11 members, with a twelfth director to be appointed by October 1 as part of the settlement.
Wilson, who owns approximately 8.6% of Lululemon, had been publicly critical of the company's strategy and leadership since December. The agreement includes an 18-month standstill period, during which Wilson has committed to refraining from public criticism.
The resolution of the proxy battle provides incoming CEO Heidi O'Neill, formerly of Nike, with a clearer path as she prepares to take the helm in September. Lululemon is facing intensified competition from brands like Alo Yoga and Vuori, and has forecast its first sales decline since the pandemic for the current quarter, alongside margin pressure from increased discounting and costs.
Analysts suggest Lululemon needs to refresh its product offerings and brand positioning to regain market share. The company's substantial net cash reserve of $1.8 billion is also a point of focus, with expectations of investment in new categories, store upgrades, or international expansion. Activist investor Elliott Investment Management, which had previously held a $1 billion stake and advocated for leadership changes, has not publicly commented on the agreement.