Lululemon has reached a settlement agreement with its founder, Chip Wilson, to end the proxy contest he initiated in December. The athletic apparel company announced the agreement on Wednesday, resolving a contentious dispute with its largest individual shareholder.
Under the terms of the settlement, Lululemon has agreed to appoint two of Wilson's nominated directors to its board: Marc Maurer, former co-CEO of On, and Laura Gentile, former Chief Marketing Officer at ESPN. Additionally, the company committed to adding a third director with "product and brand expertise in apparel" by October.
In exchange for these board seats and the additional director, Wilson has agreed to refrain from publicly criticizing the company for approximately 18 months. He also agreed to a donation from Lululemon to Kitsilano Beach in Vancouver, the company's founding location, to support local athletics, art, and landscaping. This replaces his earlier request for reimbursement of proxy contest expenses.
"We are pleased to reach this agreement with Chip Wilson, which allows lululemon to focus on continuing to strengthen its performance," stated 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."
Wilson expressed his satisfaction with the outcome, stating that the appointees, along with existing strategic changes, "reflect meaningful progress toward restoring the company's product-first vision and unlocking tremendous value for shareholders."
The resolution comes after a period of public sparring between Wilson and the company he founded. Lululemon had previously taken its proxy contest public in a letter to shareholders, characterizing Wilson's perspectives as "outdated" and citing "troubling conflicts of interest" that they believed would hinder the company's turnaround plan.
At that time, the company's board had asserted, "replacing any of lululemon's directors with Mr. Wilson's less qualified nominees would endorse his misguided perspectives, deprive the company of critical skills and expertise, and risk derailing our progress in an especially pivotal time for our business and organization."
Wilson, who stepped down as chairman in 2013, had been critical of Lululemon for years, but intensified his public commentary in recent months as the company's performance and stock price declined. Lululemon's business in the Americas, its largest market, has experienced a slowdown attributed to factors including tariff costs and increased competition from brands like Vuori and Alo Yoga, as the global athleisure market has cooled.
When Lululemon reported its fiscal fourth-quarter earnings in March, the company issued cautious guidance for fiscal year 2026. It warned that higher tariffs and the ongoing proxy battle with Wilson were expected to negatively impact its financial results.
As of Tuesday's market close, Lululemon's shares had fallen nearly 39% year-to-date. The company's stock saw a rise of about 4% in premarket trading following the settlement announcement.
This agreement marks an end to a significant internal conflict, allowing Lululemon's leadership to concentrate on strategic initiatives and operational improvements aimed at revitalizing growth and shareholder value.
