Lululemon founder Chip Wilson has been stripped of his right to designate a board member for the popular activewear company.
The move was revealed in an April SEC filing, in which the Vancouver-based company said the billionaire had broken a 2014 agreement that gave him the power to designate a Class III director, so long as he owned eight per cent of the company’s stock and didn’t take “any contesting stockholder action regarding lululemon.”
“Since the time of our last annual meeting of stockholders, our board of directors determined that Mr. Wilson failed to observe the requirements of the support agreement related to certain contesting stockholder actions and, accordingly, Mr. Wilson’s right to designate a person for appointment or election to our board had terminated,” reads the filing.
The company’s filing does not elaborate on what Wilson did to run afoul of the agreement.
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Wilson’s current board appointee, Kathryn Henry, tendered her resignation, however the board agreed to keep her on as a member — but not as Wilson’s representative.
According to the SEC filing, lululemon informed Wilson of the decision, “and Mr. Wilson informed the board he did not agree with the board’s conclusions.”
Wilson has maintained a strained relationship with the company he founded in 1998 after resigning from its board in 2015.
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In 2016, he wrote a letter to the company arguing it had “lost its way” and that management’s competence was “uninspiring at best.”
And in 2017, he took out a bus shelter ad outside the company’s Vancouver headquarters urging it to buy Under Armour.
On Thursday, lululemon stock was trading at US$173.71, down from its all-time high of $178.64 on May 3.
According to Forbes, Wilson is worth an estimated $4 billion.