Lululemon Athletica's (LULU) stock soared 5.02% intraday on Wednesday, following the announcement that the company has resolved its high-profile proxy fight with founder Chip Wilson.
The athletic apparel retailer entered into a cooperation agreement with Wilson, who owns an 8.7% stake. As part of the deal, Lululemon will appoint two of Wilson's director nominees—former ESPN chief marketing officer Laura Gentile and former On Holding co-CEO Marc Maurer—to its board after the upcoming annual meeting. The company also committed to adding a third director with apparel product and brand expertise by October 1.
In return, Wilson agreed to an 18-month standstill period, during which he will cease public criticism of the company and cap his stake. The settlement removes significant uncertainty and activist pressure that had weighed on the stock, allowing management to focus on executing its strategy under incoming CEO Heidi O'Neill.