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The Hallandale Beach Police Officers and Firefighters' Personnel Retirement Fund files a lawsuit...

The Hallandale Beach Police Officers and Firefighters' Personnel Retirement Fund files a lawsuit against Lululemon (LULU -2.1%) for raising the payout level of an executive bonus pool just before the company publicly announced it would have to undergo an expensive recall of yoga pants. Evidence shows store managers alerted the company on a weekly conference call on March 11 - two days before a compensation committee approved the bonus boost.
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Comments (2)
  • Randal James
    , contributor
    Comments (3398) | Send Message
    Interesting call - the stock was up about 10% following the warning and explanation. Lawsuits are about damages.
    6 May 2013, 03:10 PM Reply Like
  • imac007
    , contributor
    Comments (593) | Send Message
    The message the lawsuit sends is that nobody is entitled to executive bonuses if any technical issue occurs. The role of the board is ignored. Lawsuits are a last resort after other avenues have been exhausted. The actions taken by the executive seem to be protective of quality control and the executive in charge has left. Remedial action has been taken and inventory solutions are ahead of schedule. As a shareholder I find the shareholder group actions annoying and likely damaging to share values. As you have commented, the stock is up 10% since the disclosure. I wonder how individual firefighters and police would feel about a portion of their pay being withheld while the department investigated a uniform/equipment malfunction, because it was reported two days before payday. Accountability is important but annual meetings are the time and place to raise the issues. I am sure as an individual shareholder if I demanded information about any internal company actions I would be asked to put my concerns in writing and a response would be formulated. If that did not satisfy me I would be able to make a case at an annual meeting where the other owners would either support me or not. The courts should find the same.
    6 May 2013, 10:10 PM Reply Like
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