People familiar with private discussions say Lululemon Athletica and founder Chip Wilson are close to a settlement that would grant Wilson board seats in return for a pledge of non-disparagement and limits on his ownership stake. The contemplated agreement would add two of Wilson’s nominees to the board, with a commitment to identify an additional mutually acceptable director at a later date.
Under the terms described by the people familiar with the discussions, Wilson would also receive regular access to Heidi O’Neill, Lululemon’s incoming chief executive, while agreeing not to publicly or privately disparage the company for approximately two years. Wilson currently owns 8.6% of the company he founded in 1998; the settlement under discussion would cap his ownership at around 10%.
The sources cautioned that talks remain ongoing and that no agreement has been finalized. Company and Wilson representatives were not immediately available for comment.
The negotiations follow the breakdown of earlier efforts this week to resolve one of the year’s most visible proxy contests. In the days after those talks stalled, Lululemon filed a regulatory disclosure that sharply criticized Wilson, saying he retains "outdated perspectives" on strategy and pointing to what the company described as "troubling conflicts of interest."
Wilson has spent months publicly criticizing management and positioning himself as an agent of change at the company he established. He has argued that Lululemon has lost some of its cultural cachet, and late last year he launched a formal proxy fight. Throughout this year he has sought to persuade shareholders to elect his slate of three director candidates rather than the three incumbent directors the company plans to re-elect at next month’s annual meeting.
The dispute has unfolded as Lululemon contends with operational headwinds. Sales in North America have declined, and the stock has fallen sharply - tumbling more than 60% over the past 12 months. The shares last traded around $127, down from a peak near $510 in late 2023. The company faces intensified competition from other apparel brands such as Alo and Vuori, and it now has a market capitalization approaching $15 billion.
At the same time, Lululemon has undertaken a governance and leadership refresh. The retailer named Heidi O’Neill, who led Nike’s women’s business, as its incoming CEO; she was reportedly chosen unanimously by the board and is expected to begin in September after satisfying a noncompete condition with Nike. The company has also added experienced consumer executives to its board, including former Levi Strauss CEO Chip Bergh and former Unilever chief growth and marketing officer Esi Eggleston Bracey. Teri List, formerly chief financial officer at Gap, joined the board in 2024.
Two current directors - David Mussafer and Shane Grant - are anticipated to step down at the upcoming annual meeting. The board changes and the appointment of O’Neill are part of efforts the company has signaled are intended to set a new strategic direction.
Those close to the negotiations emphasize that any settlement remains subject to final agreement and that details could change. The possible deal would effectively trade a temporary truce and limited board representation for a guarantee that Wilson will not press his public campaign against management during the specified period, while allowing him to retain a capped ownership position in the company.
Should the parties reach a binding agreement, it would bring a high-profile proxy contest to a potential close while changing the composition of Lululemon’s board and formalizing mechanisms for Wilson to engage with the company’s incoming leadership.