Lululemon's CEO resigns, company cites misconduct

These retailers filed for bankruptcy in 2017
These retailers filed for bankruptcy in 2017

Lululemon's CEO has resigned after the company claims he "fell short" of its standards of conduct.

Laurent Potdevin, who headed the athletic apparel company since January 2014, has also stepped down from the company's board of directors, effective immediately.

Chairman Glenn Murphy will serve as executive chairman in the interim, and three other senior leaders will take on additional responsibilities.

"Lululemon expects all employees to exemplify the highest levels of integrity and respect for one another, and Mr. Potdevin fell short of these standards of conduct," the company said in a release Monday afternoon.

The company didn't say how he fell short of its standards. Lululemon didn't immediately respond to a request further comment.

Related: Under Armour is in serious trouble

Potdevin is not leaving empty-handed.

He will be paid a lump sum of $3.35 million cash and $1.65 million over 18 monthly installments starting two months after he leaves, according to a regulatory filing.

Potdevin came on board after CEO Christine Day stepped down in 2013. She left after the company's infamous recall of see-through black yoga pants, which hit sales and profits hard. Then in 2015, Lululemon had to recall some women's tops because hard-tipped drawstrings were injuring wearers.

Related: Lululemon nosedives 21%: Its spring leggings are boring

Last March, the company admitted its leggings were too boring to attract online shoppers, and its shares fell sharply.

Shares were down around 3% after hours on Monday after news of Potdevin's resignation.

--Julia Horowitz contributed to this report.

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