Here’s in part why CEO who turned Lululemon into a running brand was pushed out
Shareholders are demanding to know why Laurent Potdevin was paid $5 million to go away
Lululemon CEO Laurent Potdevin announced his resignation on Monday.
In the wake of the news, the yoga and athletics apparel-maker and running brand was “mum,” as the Canadian Press describes it, on Tuesday, not elaborating on the reasons for Potdevin’s departure. In a statement on Monday, Lululemon said that the company “expects all employees to exemplify the highest levels of integrity and respect for one another, and Mr. Potdevin fell short of these standards of conduct.”
On Tuesday, shareholder advocates and analysts called on the company for more disclosure in the days following Potdevin’s exit, the CP reports. Potdevin was named the Vancouver-based company’s CEO in December 2013 and steered Lululemon into the men’s apparel and running market.
As the Globe and Mail reports, according to a filing to the U.S. Securities and Exchange Commission, “Lululemon and Potdevin reached a separation agreement in connection with his resignation. Under the agreement, Lululemon will pay Potdevin a $3.35-million cash payment ‘as soon as practical’ and another $1.65-million total in monthly instalments made over a year and a half.”
The Globe reports that at least two United States law firms launched investigations into Lululemon following Potdevin’s resignation, with one law firm “focusing on whether the company’s board breached their fiduciary duties.”
Late Tuesday, CNBC reported that Potdevin “left in part because of relationship with [a] female designer at the company,” sources told the outlet. The report adds that the designer resigned in 2014 after the relationship began. She was rehired at a later date, for a short term, as a contractor until January 2018. Former employees told CNBC that the culture under Potdevin’s direction was “toxic” and that he had a negative impact.
The filing adds that Potdevin agrees not to sue Lululemon, which is currently seeking a new CEO in place of Potdevin. Vancouver’s Chip Wilson is the brand’s founder, and the now global company still has its headquarters in the city.
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