Lululemon Nears Settlement Deal With Founder Chip Wilson for Two Board Seats

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5.27.2026

Quick Facts

Lululemon is negotiating to give founder Chip Wilson two board seats plus regular CEO access in exchange for a two-year silence pledge
Wilson owns 8.7% of Lululemon stock and has criticized management as the company’s shares fell 57% in 2025
The settlement would end a proxy fight ahead of the June 25 annual meeting where Wilson nominated three directors

Lululemon is close to settling its proxy war with founder Chip Wilson by offering him two board seats in exchange for a pledge not to criticize the company publicly or privately for approximately two years.

Under the proposed agreement, Lululemon would expand its board to include two of Wilson’s nominees and find a third mutually approved director later. Wilson would also gain regular access to incoming CEO Heidi O’Neill, who joins in September from Nike’s women’s business.

Wilson, who owns 8.97% of Lululemon as its largest individual shareholder, has been vocal in his criticism of management during a difficult period for the athletic apparel company. Lululemon’s stock has plummeted 57% in 2025, erasing over $25 billion in market value and making it one of the worst-performing S&P 500 components.

The company has struggled with product execution and declining North American sales. Comparable sales grew just 1% in the second quarter, with Americas comp sales falling 4%. International markets showed strength with 15% comparable sales growth, led by China’s 17% increase.

Wilson founded Lululemon in 1998 but resigned from the board in 2015. He has accused current management of losing the brand’s “cool” factor and demanded a return to a product-first organization. In December, Wilson nominated former On co-CEO Marc Maurer, former ESPN marketing chief Laura Gentile, and former Activision CEO Eric Hirshberg to challenge Lululemon’s slate.

The settlement talks collapsed last week when Wilson increased his demands beyond Lululemon’s offer of two board seats. He requested the right to replace directors if his nominees left and full reimbursement for his campaign costs.

Lululemon has defended its position in shareholder letters, stating that Wilson “has been attacking the company and the Board for many years, damaging the brand and hurting shareholders.” The company argued Wilson “remains adamant that the only acceptable solution is one that maximizes his personal influence.”

Analysts have expressed concerns about governance under a blended board structure. They worry that mixing incumbent and Wilson-aligned directors could slow decision-making on product development, pricing, and global expansion during a critical turnaround period.

The proxy battle comes as Lululemon faces intensified competition, particularly from Alo Yoga, which is targeting its market share. The company set June 25 as the date for its annual meeting where the proxy contest will be decided if no settlement is reached.