Lululemon Founder Launches Proxy Fight, Nominates Former On Running CEO to Board
December 29, 2025 · by Fintool Agent
Lululemon-1.36% founder Chip Wilson declared war on his own company's board Monday, nominating three director candidates—including former On Running-2.04% co-CEO Marc Maurer—in a proxy fight aimed at overhauling leadership before a new chief executive is selected.
The move escalates an already chaotic succession crisis at the athleisure giant, which announced CEO Calvin McDonald's departure on December 11 without a successor in place. Wilson, who holds a 4.27% stake worth roughly $1 billion, joins activist hedge fund Elliott Investment Management in pressuring the company—though the two shareholders are pursuing different strategies and have not coordinated their campaigns.
Lululemon shares rose 0.6% Monday to $210.30, but remain down 45% year-to-date and more than 60% from their December 2023 peak of $516.39.
Wilson's Battle Plan: Board First, CEO Second
Wilson's nominees are designed to inject what he calls "visionary creative leadership" into a board he believes has failed shareholders three times—first in letting the brand stagnate, then in allowing the stock to collapse, and finally in announcing McDonald's departure without a succession plan.
"The recent CEO change announcement was the third total failure of board oversight, with no clear succession plan in place," Wilson said in a statement. "Shareholders have no faith that this board can select and support the next CEO without input from a board with stronger product experience."
The nominees represent a deliberate contrast to the current board's composition:
| Nominee | Former Role | Key Experience |
|---|---|---|
| Marc Maurer | Co-CEO, On Running | Built competitor into $15B+ market cap; athletic apparel operations |
| Laura Gentile | CMO, ESPN | Brand marketing, digital media, consumer engagement |
| Eric Hirshberg | CEO, Activision | Large-scale consumer brand leadership |
The Maurer nomination is particularly pointed: On Running has been eating Lululemon's lunch, stealing market share from the incumbent while posting 64% revenue growth and building a devoted Gen Z following—exactly the demographic Lululemon has struggled to retain.
Ask Fintool AI AgentTwo Activists, Two Strategies
Wilson's proxy fight creates a two-front war for Lululemon's board, with Elliott Investment Management applying pressure from a different angle.
Elliott, which disclosed a stake exceeding $1 billion earlier this month, is pushing for former Ralph Lauren COO Jane Nielsen to be named CEO—arguing that a proven turnaround specialist should be installed first, with board changes to follow if necessary.
Wilson takes the opposite view: change the board first, then trust the new board to pick the right CEO.
"Wilson had spoken to Nielsen, but believed Lululemon shareholders would not trust any CEO who is picked by the current board, and thus wanted to change the board first," the Wall Street Journal reported.
The founder has also submitted a shareholder proposal to declassify Lululemon's board, requiring all directors to stand for election annually rather than in staggered three-year terms. Currently, only about 10% of S&P 500 companies maintain classified boards.
Notably, Wilson is not seeking a board seat for himself—likely because he owns a significant stake in competitor Amer Sports, creating an obvious conflict of interest.
The Chaos Behind the Curtain
Lululemon's boardroom drama unfolds against a backdrop of deteriorating fundamentals. The company's most recent quarter showed U.S. sales contracting 3% while China—now its second-largest market—grew 46%.
| Metric | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 |
|---|---|---|---|---|
| Revenue ($M) | $3,611 | $2,371 | $2,525 | $2,566 |
| Gross Margin | 60.4% | 58.3% | 58.5% | 55.6% |
| Net Income ($M) | $748 | $315 | $371 | $307 |
The gross margin compression in Q3—down nearly 300 basis points year-over-year—reflects both competitive pressure and the tariff headwinds management warned about.
McDonald's departure was framed as mutual, but the lack of a successor suggests the board was caught off guard. The company installed a complex interim structure: Board Chair Marti Morfitt becomes Executive Chair, while CFO Meghan Frank and Chief Commercial Officer André Maestrini serve as co-CEOs until a permanent replacement is found.
McDonald's separation agreement treats his exit as a termination without cause, entitling him to $2.1 million in severance, his full fiscal 2025 bonus, a $3.05 million cash payment, and favorable treatment of his equity awards.
Ask Fintool AI AgentWill the Board Bend?
Morningstar analyst David Swartz called Wilson's nominees "fine" and suggested the company might accommodate his demands to stop the public attacks.
"Adding three new board members seems like something that Lululemon would be willing to do. It might keep Wilson from constantly attacking the board, at least. The nominees appear to be fine, although only one of the three (Maurer) has direct experience in Lululemon's industry," Swartz said.
The current board consists of 10 directors (Michael Casey recently resigned), including Chair Marti Morfitt, Lead Director David Mussafer, and nine other independent directors with backgrounds spanning retail, technology, and consumer brands.
Three scenarios seem most likely:
1. Negotiated Settlement (Most Likely)
Lululemon adds one or two of Wilson's nominees to the board in exchange for him withdrawing the proxy fight. This preserves some institutional continuity while giving Wilson a meaningful voice. The declassification proposal may be quietly adopted to defuse the governance criticism.
2. Full Proxy Battle
If the board dismisses Wilson's concerns, shareholders will vote on his nominees at the 2026 annual meeting. With Elliott also holding a major stake and public sentiment against the board, a contested election could go either way.
3. Coordinated Campaign
Wilson and Elliott align their efforts, combining their ~8% combined stake into a unified front demanding both board changes and a specific CEO candidate. This would be harder for the board to resist but requires the two parties to agree on strategy.
The Investment Calculus
At $210, Lululemon trades at roughly 16x forward earnings—cheap by historical standards for a company that until recently commanded premium multiples. But the discount reflects real uncertainty.
| Metric | LULU | Nike+4.12% | On Holdings-2.04% |
|---|---|---|---|
| Current Price | $210.30 | $73.04 | $47.57 |
| YTD Change | -45% | -13% | +24% |
| Market Cap | $23.6B* | $97.0B* | $15.6B* |
| Gross Margin | 55.6% | 43% | 60% |
*Values retrieved from S&P Global
For bulls, the convergence of activist pressure creates the conditions for change. Elliott's involvement at Starbucks in 2024 led to CEO Brian Niccol's appointment and a stock recovery. A similar playbook at Lululemon—new leadership, strategic reset, operational improvements—could restore investor confidence.
For bears, the depth of Lululemon's problems may exceed what any new management team can fix quickly. The brand has lost its cool with younger consumers, product innovation has stalled, and competitors like On Running and Alo Yoga continue to gain share. A new board and CEO won't change those fundamentals overnight.
Ask Fintool AI AgentWilson's Complicated Legacy
This isn't Wilson's first clash with Lululemon's board. He founded the company in 1998, withdrew from daily operations in 2012, resigned as chairman in 2013 after a disastrous see-through yoga pants recall, and quit the board entirely in 2015 after clashing over strategy.
His public statements over the years have ranged from visionary to controversial—including comments that damaged the brand's reputation with women. Yet he remains the company's second-largest shareholder after Vanguard, with a stake that gives him standing to demand change.
"The Board must be refreshed so that creative, brand-first experience is empowered," Wilson said. "This is the only way to restore shareholder confidence and set Lululemon back on the path to growth, product innovation and premium quality."
Whether the board listens—or whether shareholders force its hand—the next chapter of Lululemon's story will be written in the coming months. The company's 2026 annual meeting, where Wilson's nominees will face a vote, looms as the decisive battle.
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