Lululemon Athletica Inc.’s new non-executive chairman has survived an attempt to unseat him by his predecessor, company founder Chip Wilson.
Wilson set the stage for a contentious annual meeting in Vancouver Wednesday when, just hours before the session was to convene, he said he would vote against the reelection of Michael Casey and another director, RoAnn Costin, to seats on the board.
However, he supported the election of the third name on the ballot, Laurent Potdevin, who succeeded Christine Day as chief executive officer in January following a process in which Wilson was actively engaged.
Wilson’s decision to oppose Casey and Costin carried more than symbolic importance: With about 40.2 million shares of Lululemon stock, he holds 27.7 percent of the shares and remains the company’s largest stockholder. FMR LLC ranks second with 11.9 percent of shares, according to the company’s proxy.
“While I am excited about the new management team that I helped put in place, I am concerned that the board is not aligned with the core values of product and innovation on which Lululemon was founded and on which the company thrived,” Wilson said in a statement made public prior to the meeting. “As a 27 percent shareholder in the company, I believe change is now needed at the board level to increase shareholder value.
“I was hopeful that we would be able to create a balance at Lululemon between product and growth that would complement each other,” he continued. “Instead, I have found a palpable imbalance in board presentation, which is heavily weighted towards short-term results at the expense of product, culture and brand and longer-term corporate goals.”
He said his vote against two of the three nominees “sends a signal to the financial community that the company must address this imbalance if Lululemon is to fully recover.”
The company responded that Potdevin and the board “are aligned with the company’s core values and possess the necessary expertise to successfully lead Lululemon forward.”
A hot property on Wall Street as yoga pants and the ath-leisure trend took root with consumers, the company has struggled since a quality issue arose with its black Luon yoga pants and subsequent recall early last year. Wilson added to the company’s woes when he stated that some women’s bodies weren’t right for the product.
Casey was executive vice president, chief financial officer and chief administrative officer of Starbucks Corp. before retiring in 2007, the year Lululemon went public, and became a senior adviser to the coffee company and a Lululemon director. Costin, also a director since 2007, is president of Wilderness Point Investments.
Lululemon said all three nominees were elected and that it would supply a breakdown of the voting in a Form 8-K to be filed later with the Securities and Exchange Commission.
Wilson is scheduled to stand for reelection to the board at the company’s 2016 annual meeting.
Shares Wednesday closed down 2.6 percent at $44.30, 43 percent off the 52-week high of $77.75 reached on Oct. 4.