Lululemon $LULU reached an agreement with founder Chip Wilson on Wednesday, ending a proxy contest the billionaire had launched late last year against the company he started in 1998.
Two of Wilson's board nominees will join the company's directors, according to CNBC: Marc Maurer, who previously served as co-CEO of On, and Laura Gentile, a former Chief Marketing Officer at ESPN. The company also agreed to add a third director with product and brand expertise in apparel by Oct. 1, the company said.
Rather than the expense reimbursement Wilson had originally sought for his proxy campaign, the two sides agreed that Lululemon would instead direct a donation to Kitsilano Beach in Vancouver — the city where the company got its start — earmarked for athletics, art, and landscaping, the company said.
Lululemon executive chair Marti Morfitt called the agreement a path forward for incoming CEO Heidi O'Neill and the leadership team. "We are pleased to reach this agreement with Chip Wilson, which allows lululemon to focus on continuing to strengthen its performance," Morfitt said in a statement. Wilson, for his part, said the incoming directors and strategic shifts the company had already undertaken "reflect meaningful progress toward restoring the company's product-first vision and unlocking tremendous value for shareholders."
Lululemon stock rose about 4% in early trading Wednesday.
With O'Neill set to take the helm in September, the deal clears away a contentious sideshow that had been shadowing the company's leadership transition, according to Bloomberg. Her appointment comes as Lululemon grapples with softening North American sales and pressure from rivals such as Alo and Vuori; before taking the role, O'Neill had overseen the expansion of Nike $NKE's women's division, according to Reuters. As of Tuesday's close, shares were down 39% on the year, according to Bloomberg.
Holding an 8.6% stake in the company, Wilson had waged a months-long campaign arguing that Lululemon had drifted from its creative roots and lost its edge on product, according to Reuters. Among his tactics, Wilson ran an ad in The Wall Street Journal declaring the brand had lost its soul and built a dedicated website to make the case for his director picks, according to Bloomberg. The company fired back, characterizing Wilson's views as "outdated perspectives" driven by "troubling conflicts of interest."
Lululemon revised its full-year profit outlook downward earlier this year, with management citing tariff costs as a drag on operating margins in the second half of the year.