Lululemon’s Chief Executive, Laurent Potdevin, has abruptly resigned after exhibiting behavior that failed to meet the company’s standards.
According to news from The Wall Street Journal, the actions that led to his resignation, which is effective immediately, were unspecified, but a source revealed there were “a range of instances” where his behavior didn’t align with company policy and expectations.
“Lululemon expects all employees to exemplify the highest levels of integrity and respect for one another, and Mr. Potdevin fell short,” the company said in a statement.
Potdevin had been lululemon’s top executive since January 2014. Before joining the company, he was president of TOMS Shoes and chief executive of Burton Snowboards. He studied engineering in his native Geneva and went to business school in Paris.
Glenn Murphy, lululemon’s chairman, will assume CEO duties while the company searches for Potdevin’s replacement. The retailer’s senior executives will report directly to Murphy.
“It is the responsibility of leaders to set the right tone in our organization,” said Murphy in a statement. “Protecting the organization’s culture is one of the Board’s most important duties.”
A regulatory filing revealed the company is paying Potdevin an upfront cash settlement of $3.35 million, as well as $1.65 million over 18 months. He won’t receive any continued or accelerated vesting of equity awards. In 2013, an employment agreement showed that Potdevin was eligible for severance equivalent to 18 months of his base salary, as well as accelerated vesting of “certain outstanding equity awards” if he was let go without cause or if he resigned for a satisfactory reason.
While lululemon’s sales have remained strong despite retail industry woes, the company has been involved in board disputes. Its Founder and former CEO, Dennis “Chip” Wilson, who resigned in 2014, has even publicly criticized Potdevin’s leadership in the past.
Lululemon shares fell 3 percent to $75 in after-hours trading after Potdevin’s sudden departure was made public. The company has a market value of about $10 billion.