Declassify Lululemon, plus anti-ESG losses and big dumb payouts

This is Proxy Countdown. Welcome to the big show for the week of June 15th, 2026. Alongside my tag team partner, Matt Muscarty. I'm Damian Rawlis on today's Countdown. Lead independent directors continue to be CEOs and training. Lachlan Murdoch gives himself more money, but promises he had nothing to do with it. Investors hate one. CEO's pay. Exxon Hearts Texas and Lowe's ESG. And on the big vote, Matt puts on some Lululemon. You do Lululemon, right? Yeah, the sheer kind though. Okay. Let's start with our top stories. So it's been a while. We've it's been a almost three weeks since we've done a show. So I had a lot of filings to look through at major at large cap companies. 130 filings since May twenty eighth. The headlines. lead independent directors continue to be kings. We've been covering this all year. Tyson Foods, lead independent director Jeffrey Schomberger will become CEO replacing Donnie King, who will will remain on the board. And at Standard Arrow, lead independent director Paul McKelleny will become CEO and chair, succeeding CEO and chair Russell Ford. So he's also getting a twenty million dollar golden hello, which kind of weird because he's already there, but Yet does he vote on his own golden hello? yeah, absolutely. That's a great vote to have. we're losing one of our few female CEOs at Clorox, Linda Rendell, who's quite young actually, t took over pretty recently. She's stepping down for health reasons. we're also losing one of our most talked about overboarded chronic DEI flippers. Well, we're losing from one company. Dimitri Stockton is stepping down at deer. Although this is weird for a director. He's stepping down in twenty twenty seven. I don't know what the ego on this guy to announce this a year in advance. You don't really see that for directors too often. The early director step down is not common. Yeah. Yeah. And at Microsoft Epstein Files Bro, Reed Hoffman is stepping down. So I don't know. That's the those are the top stories. Some of the other things that we always follow that the d we we looked at this down to two F movement. We're falling under three women on the board. At Gladstone Investment, they elected a guy named George Chip Stellis the Third. the reason why I picked this one is that he was immediately named to three committees, which is a bit odd. That's compensation committee, nominating committee, valuation committee. And I was looking and there's only one woman who serves on any of the board committees there at that company, Katherine Gorka. But then I realized there's only one woman who's on the board committees there because she's only a woman on the board. So I don't know. Yeah. Yeah, anyway. lots of stupid money stories to report, mostly in the forms of golden hellos, but Let's start with Lachlan Murdoch, CEO chair at Fox. That's Lachlan Murdoch, also the company's number one shareholder with third, well, I don't know what it is, about 40% of voting power. they're raising his target annual bonus to 9 million and his target annual equity award to $20 million. If you do all the math with the like possible payouts, he's basically given himself about a $24 million raise every year. but It does say in the filing that mister Murdoch recuse himself from all discussions and votes regarding his emplo his compensation adjustments. at least they were clear about that. Yeah. Is there but is there any way we can believe that? Why would we believe why would an investor believe that? Okay. CFOs continue to get huge gold in the lows. A couple I looked at this week. Syncora, they have a new CFO, $10 million, Trade Desk, $10 million. At UL Solutions, a special one-time $20 million equity grant to CEO Jennifer Scanlon. I love when they just get these like off. because they said it. policy they always call they always call them special one time so does that mean they can't give her twenty million dollars again if they want to give her money next year it has to be like nineteen million dollars or twenty one million dollars so it's not a two time twenty million dollar award or I I don't I don't know. And at Truist Financial, they have a new CEO, Michael Lyons. he is gonna get forty a $40 million golden hello package, including $38 million in equity and about $3 million in cash. And how about this? At Marvel Technology, a director, Daniel Dern, is becoming the CFO. Again, this is this is one of my biggest trends of the year. Directors leaping into the C-suite. So he gets to be C CFO, and he's getting a golden hello worth $41. million dollars. And to your point, what was what part of the process was he on with voting on his forty one million dollar golden hello? Yeah. I'm sure he recused himself after his like 10 year relationship with all the board members. Yeah. Uh-huh. Sure. then I'm tr tracking some of the dumb stuff that happened this week, including at CH Robinson Worldwide, they gave a special equity award to their chief strategy and innovation officer of eight million dollars in equity for one of the reasons was quote designed to drive strategic and talent talent development outcomes. So they gave the chief strategy officer extra money to do more strategy. I don't understand. I don't like but it falls in the same category as like these these these like sudden retention bonuses. They're just they just seem to be money to do your job. Like I don't get it. Wha I mean I don't know. I I just don't think that should be allowed. I just don't think yeah. Make something else up. How about the how about they're just not allowed? This one this one cracked me up and I'm sorry, Mitch Little, but I'm gonna make fun of you a little bit. microchip technology. they appointed a former executive, Mitch Little, to to join the board, right? Already a bit of a problem. But they did something I've never seen before. In his bio, in the AK, they mentioned specifically that he authored two books. Yeah. They actually cited that he wrote two books. One called Shiftability Creating a Sustainable Competitive Advantage in Selling. And Cusp leading by serving when outcomes matter most. Okay. I don't know if he had control over this or he just is pumping his books, but I've never seen an 8K filing like like selling someone's books or even mentioning that someone wrote the books. But I had to look at these books, and I hate to make fun of you, Mitch, but Here are the books. The first one is self-published through Amazon, right? So, I mean, I don't know. I don't want to be a snob here. Maybe that's a book. The second one's worse. It's a PDF and it's not published, and it's 48 pages long. So, so so instead now we're going beyond making up skills and the skills matrix in the proxy statements. Now we're just kind of like making up Okay. Kinda not a book, yeah. Wow. books that they wrote as as part of the reason why that they're pointed to the bo yeah. Okay. Sorry, Mitch. Uhhuh. Okay. Is it self pu self published bio. So here's where I here's where I think you're wrong. I don't I think Mitch Little wrote his own bio. I'm I'm and therefore Mitch. It's a self-published bio with the self-published books. But if you're going to I mean, if you take that out of his bio, right? Like so here's the question. If you take that out of his bio, how long is his bio like even like visibly on the page? Mm-hmm. Free advertising. Yeah, it's it's i it's microchip technology appointed Mitch Little. So that you need the books. It actually very legitimately is very small as a bio if you take that out. Yeah, okay. I mean, not only is it a PDF and forty eight pages, but it also that second book, it it's not even full sentences and paragraphs. It ki if you look at it, it looks like a like prose poetry. It's like it's like a single sentence, then a space, then a next line. Like it's it's it's not even it's yeah, it's not even sentences that run together anyway. I mean, his bio said before this that he was a senior vice president of client engagement at Microchip. So he's already an insider who retired is coming back to the board. There's nothing else. So he had to have the books in there. So he run on sentence or not. Yeah, which is already a problem. And then finally I want to end with the top stories with something that's sorta smart, I guess. CME Group. the what's not smart is that the chair and CEO Terren Stuffy's gonna become executive chair. I don't know why he can't just leave. But the new CEO is this former CFO, Lynn Fitzpatrick. So they just appointed the CFO. How's that for an idea? No, the lead independent director? Were they not available? No, just I mean, kind of the next up, kind of the next up in line, the C suite, and there's not even a golden hello attack. I that that's how you kinda do it, right? You you don't spend forty million dollars in golden hello packages. You you build a deck of talented executives and even if it's a woman, you actually hire them. Well, so just as a side note, because Terrence Duffy is staying on and becoming executive chair, Really, did they hire anybody or did Terrence Duffy just stick around, make the money and have less to do? Okay. Yeah. Go ahead. Yeah, that's true. That's true. Executive chair. No. It's like a it's a you know, we should actually s because we're probably the only company that tries things and cares and and and and and attempts to to really like change the data and make statements about the data. Maybe in these instances, maybe when an a CEO leaves and stays as an executive chair, we should call the new CEO an interim CEO. Maybe we should start calling them that. Yeah, I would I actually think we need a slightly more derogatory term. Baby sat CEO. Yeah. Junior CEO. Yeah. Right? Or or babysitter, baby sitted, baby sat, baby sought. All right. moving on, proxy cage matches. I'm gonna spare you there's nothing truly great going on. Proxy cade matches. I'm gonna skip that one. I'm gonna spare the audience on that one. Vote results table, hundred and forty-five meetings. This is basically the end of the proxy season, but a hundred and forty five meetings like I looked at since May twenty eighth. I I th I guess the big story still is this dwindling total of shareholder proposals. So there's only seventy-seven proposals out of those hundred and forty-five meetings. But th really they only came from thirty-three companies. And these are large cap companies. So they do seem to be disappearing. And in fact, a lot of these came from Meta and Alphabet had 10 each. So 20 of the proposals coming from only two companies. But the top story really is Warner Brothers Discovery. Eighty-four percent of shareholders voted no on David Zaslov's pay package. And and I'm just peeking ahead, the only CEO to lose Seon Pay in the last three weeks. So they found one and it's David Zaslov, I guess. I don't I I don't know why. We talked about this on our business pants Friday show. I don't know why it's him. I don't know why it's not others, but and I don't know why the number is so damn high. That is incredible. An eighty f four percent rejection. But there you go. That's what happened. I mean, it is odd to blanch at the number that David Zaslov was going to get and not to blanch at the trillion dollar pay package for Elon Musk or the like there are many pay packages now. The Rivian CEO, there are many pay packages that are just absurd. Hundred and fifty million, I think. Speci with s all these special grants that we cite every week. And it just seems like we're arbitrarily picking, I don't like that guy. So, I don't know. And there's not like a single controlling shareholder here. It's the it's a typical profile where the the biggest shareholders are like Vanguard, BlackRock, right? It's not like there was one person who made this decision. It was everybody, everyone got together. Yeah. Other big stories of the week, ExxonMobil, they were kind of the biggest, loudest baby of the last few weeks. So they they had a a Texas, a dexit vote to move to Texas. That passed, 71% said yes. Simultaneously, yeah. they actually they they had one at Voyager Technologies too. so two companies moving to Texas. But I I also cite ExxonMobil for having the most condescending titles of shareholder proposals I've ever seen. The first one was called Independent Chair, a proposal overwhelmingly defeated on sixteen separate occasions since two thousand, right? And that got that got fifteen percent yes. I don't I don't know if that's I guess that's overwhelmingly defeated. I don't know anymore. What is like what is a six significant number? Doesn't matter. And the second proposal at Exxon was they called it requesting company to modify its voluntary retail voting program to provide multiple options not aligned with the board's recommendations. anyway, Target. Tar Target had a ch investors had a chance to weigh in on this failed s succession planning, right? It doesn't matter. I mean, they lost. Brian Cornell really one of the most I don't know if I'm using too heavy of a term here. Disliked CEOs. basically pushed out there was a there I would call him a top under performer. So i they allowed so he picked someone at Target to take over. He stayed on his executive chair, right? He only got thirteen percent no against him as a director, and then an independent board chair proposal got about forty percent support. So there were looks like there's some movement to do something, but I don't know. I mean they really the target investors kind of blew it. I don't know. I feel like they had an opportunity to do something there. And and we're already covering other stories. Michael Fidelky, LGBTQ plus community, which represents 1.7 trillion in spending in the US, Target, one of the companies that has lost a lot of their spending power. So I don't know. I thought investors maybe would have made a bigger splash at Target. moving on to other votes, we had three wins, three shareholder proposal wins, special shareholder meeting improvement at HubSpot. Simple majority vote standard at five below and a majority voting standard at El Pollo Loco Holdings. th those are some traditional governance proposals. So despite what you read in the Harvard University corp corporate governance blog, which has a story this week that says no ESG related share lift proposals pass in two thousand twenty six proxy season, don't believe it. That because we we tracked three that just passed. For some reason they're excluding governance. They're excluding governance votes, but they shouldn't be. It's still an important part of the ESG proposals. the other thing worth mentioning is just the the the dire state of some of these anti-DEI votes. I mean, these are just brutal. I'm gonna highlight a few of them. Dick Sporting Goods had one called Women's Rights Related Business Risk. Yeah, G is not a thing, yeah. and decision framework. I'm guessing this had something to do with trans people. 0.06%, yes. Brutal, brutal. And then Airbnb had had three brutal ones. One is risks relating to digital services. Another is discrimination and charitable support. And the third is risks of politicized divestments.06%, 0.04%, 0.09%. you Wow. I mean this is just pathetic, honestly. The hate the hate groups, yeah. Well, their overall their overall average is going to come up because they have done a number of proposals this year that are independent chairs and, you know, simple majority voting or things like that. So it'll look better. The sneaky, sneaky. their brutal hate their their fun hate parade is getting stomped on. and then we talked about meta and alphabet having the most vote most proposals with 10 each. But I'm gonna highlight something I I think that's relatively interesting at least. we talk about all the time how really America has hit a very dangerous wall with these dual class companies like the the it what used to be quaint, you know, we'd have controlled companies and Yeah, it's not doing so well. investors would kind of adjust accordingly. W we're we're now looking at that that these most of these controlled companies are are are the ones responsible for basically setting government policy, right? They're they're the ones controlling every you know, you y y you got the AI companies, you got your tech companies. But when you look closer at some of the votes at these companies, like at Meta, they had a proposal, annual vote regarding no dual class capital structure. Trying to get rid of it. Twenty-six percent said yes. Disclosure of voting results by share class, twenty percent yet said yes. Also Alphabet, equal shareholder voting, thirty-one percent yes. Basically, all of the non dic dictator held shares at these companies are screaming for change. So not r n these are this is never reported on, but it to me it's something. I don't know. It's a s I I don't know where we go with this, but yeah. It's about half of the yeah. Well, the something is that we should not ever like SpaceX just IPOs and we OK a worse governance structure than it like worse by exponentially worse. Investors are not looking at the outcomes at the companies where they allowed it 10 years ago and saying we don't want to repeat the same mistake where we get in a position and we can't make a change. Instead, they're OKing it. Nothing. Yeah. Even worse than meta. Yeah. again and again and again and like five, 10 years from now, they're going to be upset and you're going to see the same votes. 20 percent no, except that's the majority of minority shareholders. They just don't have any power. It's going to be things like that. So I don't know what investors are doing. We know that this doesn't work for investors. We know that you want the rights when you want the rights. What what are we? Why are we upset now at Metta and we're voting this way? when you could vote not to include dual class shares in your portfolio. You could vote against dual class everywhere. moving on to say on pay, we already covered the biggest story, Warner Brothers Discovery. You know, the we still have the same pattern. at any company where they're getting even a little bit of dissent, like at Fidelity National Information Services, 30% rejected pay, but an average support of directors at ninety eight percent. And at Apollo Global Management, twenty nine percent rejected pay, but an average support of ninety nine percent for their directors. So the same old story there. Moving on to directors. God, I this is probably my I I don't know if I made this prediction. Maybe I made this at the CII conference. I I really thought we'd have some movement and votes against directors this year. I just I just thought with the lack of proposals, shared proposals, and and the changing ball game there that people would start throwing some dissent at directors, but I'm not seeing it. Honestly, like I don't even anything to say. The the only thing that stood out to me was at TK Group Holdings just because I thought it was Funny? That's it. The Rock. The wrestler The Rock. He got twenty percent no. He the the so I j I just thought it was funny that at all at all places you're voting against the most famous wrestler in the land at a at a wrestling company, so I just thought it was funny. but the only trend I I noticed over the past few weeks, and I don't know what it all means, is that I noticed that a classified on classified boards. Well, Dwayne Johnson, That's a little sad for him. We're starting to see the most dissent. And I cited at least eight companies here Rista Networks, DocuSign, Rocket Companies, Fidelity, et cetera, where while there weren't many directors up for a vote, a large amount of them were getting up to twenty, thirty percent against. And I don't I don't know if it's because it's a passive aggressive vote against the classified board structure. I don't really know what's going on, but there But it's happening much more at classified companies. So take it for what you will. Okay. And that's the rest is fluffed. That's all. That's really all I have from the proxy from them, all the votes for the last three weeks. I'm gonna end on this. we do still have some proxy season's not completely dead. the the rest of June, next week, NVIDIA. NVIDIA is a big one. They're now at Well, we'll come back to the classified board thing. A three plus trillion dollar Mega Cop? I mean that's the biggest one. Lululemon, which you're gonna talk about. Dell. I still there's still some big ones coming up. So with that, I hand it off to you Lululemon. All right, let's talk about Lululemon. It was a big year for Lululemon. We covered it a bunch of times. We talked about it a bunch, but we're going to rehash some of it. Lululemon was in the middle of a Chip Wilson campaign. If you don't know who Chip Wilson was, he was the founder slash CEO of slash chair of Lululemon. He put together the board when it IPO'd and he got kicked off of the board and out of the company. Yeah, let's do it. We talked a lot about Lululemon this year, yeah. Slash chair for saying really rude things about his customers and being sort of a misogynist pig. So. Yeah, which we which i is a extreme outlier in this world, right? 'Cause there's a lot of horrible things that executives do. So but th to kick him off the board for it is a it's it's a massive moment. Yeah. Takes a lot. is not a normal move yet. It takes a lot. His but Chip Wilson's campaign since basically the end of last year up until the agreement in May that he made with the board was sort of a referendum on board entrenchment mechanisms and how they need to be dissolved. He he effectively was asking for board seats. He said. quote, it is clear to the world that Lululemon is special but in need of change. As I've stated for years, Lululemon needs visionary creative leadership to thrive. The simple truth is that the current board lacks these skills and as a result, Lululemon is unable to win back the confidence of its critical stakeholders and regain commercial momentum. The nominees I put forward today are the change that is needed to redefine Lululemon and begin this company's next chapter of success. Be before you go on, I I do love the to point out that it it is always in these moments, in these activist investor moments, whatever you call it, this is the time when they actually tell you that the boards actually do matter. Right? And we and investors seem to listen. They I mean, when you look at dissent votes during these times, investors agree. So I don't know why we're seeing ninety nine percent average yes at other boards. and b and by the way, The board's important, correct. That's first thing that you notice, yeah. i you'll have to explain to me. What is so special about Lululemon? Why is that s why is it special? it's in the yoga pants. Yeah, blue lemon actually represented a piece of zeitgeist in the 2020, 2021 timeframe when everybody wore yoga pants. That was it was it was just a fashion moment, you know, like a lot of people decided yoga pants was the thing to wear everywhere, right? I don't know that it's special. I think it was more lucky than special. Makes it makes pants at you when you work out? Okay, anyway. Sure. Great. Everyone stayed home because of COVID? I don't know if I'd call that special, but go ahead. But he's been on a disparagement rampage since late last year. Lululemon, here's some headlines. Lululemon founder is blasting the company for selling sheer leggings, calling it a new low. Lululemon founder Chip Wilson blames board for total operational failure and get low launch. Meanwhile, in 2013, Lululemon recalled nearly 20 percent of their pants for being too sheer. So that's. Yeah. That's a lot of pants. Yeah. This is not like a new phenomenon for yoga pants. In fact, under Chip Wilson, this was a problem. He was the CEO at that point. I believe it was roughly 2014, 2015, 16. But he he basically launched this board shakeup at the same time he launched it. He nominated three independent directors. Yeah, he was there. Yeah, two thousand thirteen. Yeah. When did he officially leave the board? Do you have that date? Okay. Got it, got it. and submitted a proposal to declassify the board. Lululemon is a classified board, okay? He created the classified board when they IPO'd. He handpicked the directors on the classified board that is now no longer, you know, fit to do their jobs. Yeah, under his watch it was. Yeah. Yeah. A good idea. Yeah. Not only that, but he was the chair of that declassified board who set the agenda who who I mean he could have gotten rid of that declassified board at any time. Yeah. At any point, at any point, it was very convenient for him to have a classified board, but not as convenient now when he's not there for him to. But Lula Lemon, with the sort of like gentle, slow drip torture of Chip Wilson, ended up settling in May with Wilson. The agreement includes appointing two of Wilson's board nominees. That yeah. That is just classic. former on co CEO Mark Maurer, so a co CEO and a former ESPN chief marketing officer Laura Gentile. On is a Swedish shoe company, so at least a J. It's at least it's adjacent to you know, like to what Lululemon does. Wait, what is on? That's where Mark w what is Mark? Okay. Good that I've never heard of it, but yeah. It's adjacent, but yeah. But didn't he was it Chip or was it a different company where he didn't like the choice of someone coming from Nike? Was it Chip? That is Chip because the new CEO at Lululemon replacing Cal McDonald is a O'Neill, Heidi O'Neill, who came from Nike. Who who they say like who they say basically single handedly was the revolution behind the the the women's we women's wear at Nike, like put it on the map. Yeah, he didn't like Heidi O'Neill and. But he wants a guy from a Swedish shoe store that I've because I like sneakers. I know a lot of sneaker brands. I've never even heard of that one. Yeah. Well, that one he likes and Heidi O'Neill, the Nike, the largest shoe brand, maybe outside of Adidas, he doesn't like. But the board still acquiesced partially because 40 percent of the board he chose. Right. Like they're still there after, you know, since he was the CEO. And it's been almost a decade since he was the CEO. They also agreed to take necessary steps to a point in a He likes that one. Got it. Okay, it's important. additional new independent director in October of this year and one additional third director and one additional incumbent director will not stand for reelection in twenty twenty seven. So a third. So a third director. Yeah. So really that's kinda like a fourth almost, right? 'Cause you're like you're losing a yeah. And it's one that I'm sure he'll have a say in who's leaving, right? Basically a full replacement. He wants to say it, everybody and everything the company. The company will recommend the stockholders vote in favor of Mr. Wilson's proposal to declassify the board. So. So now the board will be behind it, the company will be behind it and investors generally are behind it. Right. That's a lot of power. Which means it'll pass. No, they'll w we've never seen a board recommend something of that level, a management proposal where the d where the voters say no. I mean they always agree. If they were to agree, if the proposal is approved, the company will submit for stockholder approval in twenty twenty seven a proposal to amend the restated certificate of incorporation to fully declassify the structure of the board and provide for annual election of directors in twenty twenty seven, effective of the twenty twenty eight annual meeting. It is amazing. I always have to giggle that it takes this damn long. Yeah. Yeah. you could. I mean, you you know, you ignore director votes, you ignore v share of proposals, even when they pass, you you ignore these s so called non binding say on pay votes. But in this one area, you stick to the letter of the law, right? Like you everything has to you know, no way to ignore anything. Yeah. You couldn't do it once. You couldn't just do it right now, apparently. What he Yeah, it's there's no way to ignore anything. Yeah, we got to follow those rules. And Wilson, in exchange with the company got from Chip Wilson, was he agreed not to badmouth the company for 18 months. Now you should stop there because this is the story. This this is w this is why he won. Because there was a lot of fighting, a lot of back and forth, including the board saying that that Chip is a is a disgrace. He's a he's a creep. The board wouldn't add Chip Wilson to the board because he asked to be on the board because they actually pointed out he has a pattern of bringing in people who have been accused of sexual harassment and their investigations show that there are problems with Chip Wilson himself and that it would do damage to the brand to add the man who's bad mouthing the brand to the brand. But the badmouth thing was so persistent and bad that it got them to actually make an agreement with him, which they didn't have to do. I mean, they didn't have to even do this. He doesn't he doesn't o own a controlling stake in the company. It's isn't it that's not enough to make to to move mountains. He owns just under 9 percent of the company. And the second part is he has to vote in accordance with the board's recommendations or respect all proposals submitted by stockholders at the stock. So he has to vote with the board. Okay. Well, that means no, he has to vote no on our on all the proposals. So here's a little bit of background context I wanted to go over in twenty twenty six. So far, there have been 14 Gerald the proposals that were filed in an effort to remove some sort of board entrenchment mechanism. That includes things like simple majority director majority voting, even proxy access. Only 14 and seven of the 14 were filed by John Chavette. And these are the ones that have been voted on. Go ahead. Wait, only fourteen? That can't be right. Okay. and I have results for. So there might actually be a couple more that I don't have results on it yet. One declassification as Zscaler in 2026, only 2026. Hm. Well, y yeah, okay. I was gonna say we don't see a lot of classified boards anymore, but that I'm surprised that's a l that's a very low number. I'm surprised by that. Well, the average vote for a board removing some sort of board entrenchment mechanism is roughly 22 percent. This is totally in line, but it's totally in line with your vote against directors at declassified boards or classified boards. Right. So roughly what we're seeing is about one in four to one in five investors shares are unhappy with board and board entrenchment mechanisms. Right. So we as they should be. Yeah. Yeah, right. As they should be. As we talked about, Chip Wilson is the reason why Lululemon has a board entrenchment mechanism. He's the one who's upset about it, but he picked Martha Morphett in 2008, David Moussifer 2014. Moussifer is one of the directors who's agreed to step down as a result of Wilson this past year, right? Like to make room for Wilson appointees. Moussifer was a Wilson appointee, so I don't she's. Yeah. Yeah, yeah. Okay. A Wilson appointee is stepping down for a Wilson appointee. Michael Casey, Emily White, 40 percent of the board that existed before Wilson started were Wilson picks. And now we're adding two Wilson members and he demands declassification. No, you're adding three members, don't don't forget, 'cause there's one's coming in October. Four overtime. Je Yeah. Jeez. Four over time, right? Like so. So basically it's going to be fully chip to Chip Wilson's board again, which it kind of already was. So it's already nuts. But I went in in a dive on classified boards. You and I agree classified boards are ridiculous. Like it's a stupid system, particularly because one of the things in the Lululemon agreement is that the members that Chip Wilson is putting up. Wow. Yeah. will not be up for a vote. They will be added the day after the AGM as class one directors with three year terms. Right. So the class one is up for election now and they're going to be added as class one directors. Their first vote won't be until twenty twenty nine. Great. Great. Dumb. Yeah. I mean the level of hypocrisy with this guy. I mean so he's he's calling for the to declassify the board yet he is intentionally wants to insulate his own directors from the vote. I mean just unbelievable. Yeah. his own directors from the vote until twenty twenty nine. OK, but I asked the question like we talk about how classified boards are bad. And I basically wanted to go through some of our data and figure out whether they are actually bad or whether they're roughly the same. What I found was that a classified boards on average have slightly more insiders. They tend to be like you add an executive. You know, 25 % insiders on the average classified board, 21 % for non classified. They have more consolidated influence. 41 % max influence versus 33 % max influence. They're much more controlled. They actually have roughly the same, but slightly more core industry knowledge on a classified board. 43 % of directors on classified boards have core industry knowledge, where 41 % on non classified. It's pretty, pretty. Pretty close, yeah. Yeah, interesting. So really control the board, yeah. Hmm. okay. But you're not getting like a dumber board, right? Like a board that knows less. They actually have lower tenure. The average classified board tenure is 7.4 years and 7.9 on non-classified boards. Sure, sure. Yeah, but isn't that like dog years? I mean when you're when you're only voted on once every three years, isn't it like a different isn't it different? Yeah, so I don't I don't know if you should measure it the same way. You basically get two elections and then you step down. Yeah, that's... They're less connected on average, mostly because they're more connected to the CEO. But there's they're less connected to each other. The CEO is choosing them and they have roughly the same performance. They've got five or nine versus four ninety six. It's almost exactly the same TSR performance for these directors. So the Lulu vote then. And this is where I'm going to end it with just focused on forget the voting for the directors. Right. I was gonna say, yeah. To each other, yeah. Mm-hmm. voting on declassifying the board. The classified declassify the board vote that Chip Wilson has put on the agenda and the board will support at this point. Lulu is already committed to the Wilson candidates after the AGM and the way they structured the declassification process. You wouldn't have a vote on any of these directors in a, you know, a full director slate until twenty twenty eight. So What you're really voting on is do we want to vote out Chip Wilson's members in 2028 or do we want to vote on them for the first time in 2029? That is the whole vote. That's the vote, right? Because Wilson is committed only for 18 months not to yell at the company. 18 months from now. Okay. Yeah. That's true. I f I I forgot about that part. That's an important actually distinction, right? He could start disparaging the company 18 months from now again And his and his directors will still be on the board and have no one will have voted on them. And no one will have had an actual say on whether or not those. So really, if you declassify, you can remove Wilson candidates at the next full AGM, which would be twenty twenty eight. They will serve effectively for what's that? know, twenty four months instead of the full three year term. Insider power will diminish if you declassify this board. You can get rid of Wilson. Ugh, what a mess. from the board. So if you're voting to declassify the board, what you're voting is really how quickly can I get rid of Wilson's directors? That's what you get to vote on. Yeah. Well I'll tell you there the at least so far in the short term, there's not exactly a a a a happy Wilson chip a chip bounce going on in the stock price. It just continues to go down. There's it's not like they're like, great, chip's back. Right? Yeah, of course it does. Well, if you leave the board classified, Wilson gains control using the classified board system. So here's my question to you. I think declassifying the board is is is always what you do here if you're an investor. But if you're Chip Wilson, are you gaslighting investors because you have set it up such that your directors are insulated for the longest possible time? in a classified board system. You've spent the last basically you you only are asking for declassification before that you put your director before you won the director slots and they gave you four effectively four directors on this board. Now, do you actually want them to lose? Are you counting on investors when Chip Wilson votes himself with his nine percent? Mm-hmm. Doesn't he vote against declassification with his board members on the board? He's supposed to vote with management, but the... Well he's not allowed to, is he? Honestly, I don't I don't even understand the declassification push. Because I I I mean originally he was doing it because it's to remove that mechanism gives you a a chance to kinda take over the board all at once, right? But now that he's mak made an agreement with the company and he's adding on his own directors, he doesn't even need it anymore. The whole the the whole thing smells of like n short termism, no planning, just trying to get this guy to shut up. Like I don't even know If the board knows why it made any decisions or I don't even know if Chip knows why he's making any decisions. I don't get is Chip Wilson putting himself in a position where he's enough board support that they will elect him to the board and or make him the CEO, right? CEO. I mean I think that's clearly what he's going for, no? because he's bought himself two full years with the progress of the declassification. But but what makes you think Cheryl's are gonna vote out anyone in any way? Well, and therein lies the rub, right? Like investors. Last year, investors voted for the class three directors and they got exactly the same results you just rattled off. got roughly 25 to 30 percent against last year, and there was not a declassification proposal on the table at Lululemon last year. It was just straight disaffection with classified board. Yeah. That's why I don't know why this is he's pushing for it. Okay. And I'm sure nine percent of that was him. I'm sure it was it likely was because he's already started his disparagement tour. So look, my final takeaway here is it's a mess and nothing Chip Wilson is going to do is going to improve it. The only thing you can do to improve it as an investor is you declassify the board and get rid of Chip Wilson, get rid of the other board members, but Chip Wilson. Yeah. 'Cause he just pi he was pissed off about everything, yeah. Yeah. You know, you introduced something here that I hadn't even considered is that you're you're probably right. He's trying to become CEO again because what what I didn't understand in the first place is that a a founder, a former s executive with almost ten percent of the shares has a a pretty large say in the company. Could can pick up the phone any time and suggest improvements and and They have to listen. So I didn't really understand his ego in the first place why he needed to come back so desperately, other than the fact that maybe he's bored in retirement. But because one thing we know about retail especially is that there is no secret sauce. I mean, pr just bringing chip back is not gonna magically make yoga pants sell better. So again, this just seemed like the raving lunatics of a of a ego of an egotist who just needs to be in control again, right? I Well, the worst the worst part about this is like. like, look, the fact is like Chip Wilson spent the better part of a year talking about this board is not qualified. The current board is not qualified. 40 percent of the board he chose. And then when he had a chance to nominate directors, here's a quote from an analyst at Morningstar named David Schwartz. The nominees appear to be fine. First of all. I don't I still understand it, honestly. Just made the company look dumb in the meantime. deep analysis appear to be fine. Nominees appear to be fine, although only one of the three has direct experience in Lululemon's industry. So he went out, he could have chosen anyone on earth to be a nominee at Lululemon and the three people he chose, only one of them actually had experience after he spent all this time saying the board does not have the experience. Yeah, appear. Yeah. He was just looking at their pictures by the way. He wasn't even looking at their That seems pretty low, yeah. Yeah. Well it's control. Yeah. He hand chose 40 % of the board that's still there and the three nominees he hand chose to disrupt the board. Only one of them had the experience he was talking about. So. But in the mean in the meantime, the the there have been so many negative articles about Lululemon over the last year. so so the the the takeaway from the consumers is just that this company is a disaster. And then they also learned that Chip Wilson is a misogynist pig, right? And it's connected to sexual harassment cases. So There it's it's a lose lose for consumers. So that they they've been told that the company is a is a disaster and if the ne if the old guy comes back, he's a pig. And you're talking about a c a customer base that is largely women. So I don't there's no wins here for anyone, right? Right. You shut up and bored Lululeman board, you shut him up a little too late because the d I feel like the damage has been done. No one wins. In which case, the real takeaway here is that the Lululemon board could not because most of them were picked by Chip Wilson in the first place, did not have the ability to stand up to Chip Wilson because the right move if you're an investor is to stand up against Chip Wilson and say, get out. Right. Well that was the that was the yes. And this in this yes. Because you know what? the board, the company would have won this vote this year. and they if they just stayed on this this this story of chip being a a horrible person, they eventually would have the whole thing would have eventually gone away. mean, better than that, like, you could have very easily just said, Chip Wilson wants you to think our board doesn't have experience doing, you know, what Lululemon does. The fact is, Chip Wilson hand-picked 40 % of us, and the ones he picked to replace us, only one of them actually has experience doing what it is that Lululemon does. So, Chip Wilson does not have a problem with our skills and our ability. Chip Wilson has a problem that he is not controlling this board. Let him keep let him keep screaming, but he's a jerk, so right? Well n not to mention that That he's not in power, yeah. 'Cause not to mention that those directors just helped to elect a woman from Nike, right? And and give her a chance. I don't know. I I just think they I I think this this cooperation agreement they signed with Chip Wilson I just think is a disaster, honestly. He's not the one in power. What you c- you- I think the whole thing ends up being a disaster and the and and they there they should be saying like if they had said Chip Wilson is not replacing the board with, you know, higher skilled people, he's replacing a board with Chip Wilson people. And what you get when you're a Chip Wilson person is that they did the internal investigation about sexual harassment and problems with Chip Wilson, right? Chip Wilson. Unbelievable. Disparaged not just lululemon now he disparaged his own customers to get him thrown out of the company to begin with So what on earth are we getting with chip Wilson? That's better than what we've got right now The whole thing is a disaster and if you're an investor you vote for Declassifying the board and literally vote out as soon as possible chip Wilson and chip Wilson's directors This is bad. Yeah. Well Yeah. And all of them, the 40 % that were remaining from Chip Wilson's earlier tenure, they all need to go. Well, you're also tacitly making the argument that th this this is one of the problems to begin with, having a founder CEO who's also the chair, who sets the agenda, who basically nominates who he wants to. Because this is what happens. When you when you have like years of crony directors following the will of your founder CEO chair lord, you you create this kind of mess, right? I mean, the board has never been That is correct. So that's my takeaway. The vote is on June 25th. And and you go buy some sheer leggings and vote out Chip Wilson. Well, you made Lululemon interesting. I didn't think it'd be interesting. Or just go to go to get some Adidas stuff or something. I don't know. All right, that's I'm sh I'm assuming you're done. Thank God. That's the proxy content for the week of june fifteenth, twenty twenty-six. Join us soon next week when we jump back into the alternative democracy pool forever on the lookout for shareholder shenanigans, dopey directors, scandalous CEO pay ratios, and wayward band-aids. I'm done.