VANCOUVER – Lululemon Athletica will pay its new chief executive at least US$3.1 million in salary, stock and bonuses in his first year on the job, according to documents filed with the U.S. Securities and Exchange Commission.
The filings say Laurent Potdevin will be paid an annual base salary of US$900,000, a signing bonus of US$200,000 and company stock valued at least US$2 million that will vest over three years.
He will also be eligible for an annual cash performance bonus of up to three times his base salary, US$2 million in performance-based restricted stock units and stock options to buy at least US$675,000 in Lululemon shares.
Also, if Potdevin stays with the Vancouver-based clothing retailer for at least two years, he will receive an additional US$1.65 million retention bonus, says the documents.
The yoga gear maker announced on Tuesday that Potdevin will take over as CEO next month from Christine Day.
Potdevin begin his career at luxury retailer LVMH and was most recently served as president of Toms Shoes, the company that gives away a pair of new shoes to a child in need for each pair it sells. He also spent more than 15 years at Burton Snowboards, including as president and CEO from 2005 to 2010.
Lululemon also announced that its founder Chip Wilson is stepping down as chairman in the new year, but will remain on the board of directors.
The company has been struggling this year as it tried to move on from a massive recall of its black Luon pants following customer complaints that the plants were too sheer.
The company blamed the problems on a style change and production issues and moved to fix the problems, but later faced other complaints about the quality and durability of their pricey workout gear.
In an interview last month, Wilson touched off a flurry of criticism by suggesting to Bloomberg TV that production issues may not have been the only issue.
“Quite frankly, some women’s bodies just actually don’t work for it,” he said. “It’s really about the rubbing through the thighs, how much pressure is there.”
Critics accused Wilson of shaming women’s bodies and gathered thousands of supporters through an online petition.
Wilson later posted a video message online in which he said he was “sad for the repercussions of my actions. I’m sad for the people of Lululemon who I care so much about that have really had to face the brunt of my actions. I take responsibility for all that has occurred.”
Lululemon is slated to reports its latest quarterly earnings on Thursday.