Lululemon and Its Founder Settle Their Feud

Lululemon just called a truce with the man who's been its loudest critic: founder Chip Wilson. The athleisure brand agreed to let Wilson install two directors on its board after the June annual meeting—former On co-CEO Marc Maurer and ex-ESPN marketing chief Laura Gentile—and will add a third apparel-focused director by Oct. 1.

In return, Wilson, who holds 8.7% of the stock and has been blasting Lululemon for losing its edge to upstart rivals, "agreed not to bad mouth the company for about a year and a half," as CNBC puts it. The Wall Street Journal reports he signed a nondisparagement pledge.

The agreement largely mirrors a settlement that nearly came together last week, before talks collapsed and Lululemon urged shareholders to reject Wilson's picks as unqualified (neither has been on a public company's board) at the company's annual June 25 meeting. Wilson had sought to have his proxy fight expenses covered by the company; it will instead make a donation to support athletics, art, and landscaping at Vancouver's Kitsilano Beach, its birthplace. Shares are up nearly 7% on the news but remain roughly 35% lower for the year.