Don’t look now, but Lululemon (LULU) is in freefall, down 8% on hefty volume as I write this. The slide comes a day after the company announced its chief operating officer has left the company, and within days (and a week) after the largest venture-capitalists have bailed by selling most or all of its shares either through direct sales or a transfer of shares to its partners. It’s unclear whether those partners, in turn, are selling their shares.
Here’s the best part: According to filings, CEO Bob Meers can exercise his options once the VCs have earned a certain return by selling their shares. They did, though it’s unclear whether he is or will. With an exercise price of 60 cents per share, Meers stands to make more than the company earned in its IPO.
You read that right: Rather than having a performance goal for his options based on company metrics, as is the case with his bonus, the only performance target is that the guys who hired him make a certain return. It’s the new world order: “We (VCs) get out, you (management) get out, too,” shareholders, be damned. Quite the deal.
Of course, this is the same Bob Meers who appears to have fudged a bit on his resume, as we’ve previously reported. No wonder nobody at the company wanted to address the issue.
The beat goes on….and stay tuned for more.