Lululemon shares rise after shareholders approve board slate in settlement with founder

Lululemon Athletica Inc (NASDAQ:LULU) shares rose more than 3% after shareholders approved three management-backed directors at the company’s June 25 annual general meeting, helping resolve a prolonged proxy dispute with founder Chip Wilson.

The elected directors include former Levi Strauss CEO Chip Bergh, Unilever executive Esi Eggleston Bracey and finance veteran Teri List. Their appointment strengthens the board as the company prepares for incoming CEO Heidi O’Neill, who is set to take over in September.

Lululemon also confirmed that two of Wilson’s nominees, former On co-CEO Marc Maurer and former ESPN chief marketing officer Laura Gentile, have also joined the board as independent directors.

A third mutually agreed director is expected to be added by October 1, expanding the board to 11 members.

The changes follow a settlement reached in May aimed at ending months of public tension between Wilson, who owns about 8.6% of the company, and Lululemon’s leadership.

Under the agreement, Wilson has also committed to an 18-month period of refraining from public criticism of the company.

Lululemon has struggled amid intensifying competition from rivals such as Alo Yoga and Vuori, with the stock down about 50% in the last 12 months.