Lululemon founder Chip Wilson is questioning the board's selection of former Nike executive Heidi O'Neill as chief executive, arguing that appointing a new CEO in the middle of a proxy fight raises concerns about whether the search should involve a refreshed board. Wilson, who owns an 8.6 per cent stake and remains the company's largest active shareholder, sent a letter to shareholders urging them to vote for his three board nominees at the annual meeting in late June.

The proxy battle has escalated as Lululemon's shares have plummeted nearly 50 per cent over the past year, with the brand's dominance in activewear eroding amid declining consumer spending. Wilson nominated On Running co-chief executive Marc Maurer and two others last year in an attempt to spur a turnaround at the company he founded in 1998. Activist hedge fund Elliott Management has also built a stake exceeding $1 billion, adding further pressure on the board.

Wilson's letter expressed frustration that O'Neill's September start date would leave Lululemon without a permanent CEO for nearly 300 days. He alleged the board demanded he place millions in an escrow account to cover potential breaches of a non-disparagement clause, calling it evidence of personal animus. Lululemon had offered Wilson one board seat and a chance to appoint a mutually agreed director by April 2027, but he rejected the cooperation agreement.