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Are You Afraid of the lululemon Board Room Ghost?

By Motley Fool Staff – Jul 6, 2016 at 9:08AM

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Who is Rhoda Pitcher, and what would the athleisure retailer have to gain from a fictional board member?

News has been simmering recently about lululemon athletica (LULU -1.03%) board member Rhoda Pitcher, who may or may not actually be a ghost, as none of her contact information or accreditations actually check out.

In this clip from the Motley Fool Money radio show, Chris Hill, Jason Moser, Matt Argersinger, and Simon Erickson talk about what we do and don't know about the elusive Pitcher, and what Lululemon might have had to gain if they were to have created a fictional board member 10 years ago when they went public.

A transcript follows the video.

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This podcast was recorded on June 24, 2016.

Chris Hill: Lululemon Athletica founder Chip Wilson is no longer involved in the company's day-to-day operations, but he is still a major shareholder. He recently blamed long-standing board members for Lululemon's lackluster performance. Rhoda Pitcher, who has been on the board for more than a decade, was unavailable for comment. That's because, guys, nobody can seem to find her. Her bio on the website says she has a master's degree in organization development from University Associates, which does not appear to be an accredited school, and the school's address turns out to be a residential home in Tucson, Arizona. Her consulting firm, Rhoda Pitcher Incorporated, has no website, contact information, or identifiable clients. She's not responding to phone calls. Is there a ghost? Is there a fictional person on Lululemon's board?

Jason Moser: Chris, listen. All we ask of Lululemon is that their board be as transparent as their yoga pants, no less.

Matt Argersinger: Oooh!

Moser: I don't think this is too much to ask.

Hill: This story has been going on for a week, and the company put out a statement on Thursday that basically said: "Eh, trust us, she exists."

Argersinger: This is such a strange story. I just think, if she does, great, roll her out...that's a bad word. But, just, put the woman on TV, do something. It's really mind-boggling here. You almost think...I'm not a conspiracy theorist, but you almost think, back in the day, IPO, setting up the original company, and they needed to have an independent board of directors...I'm not saying they invented her, but they certainly had her as a placeholder. She's not a real director, she's a real person, probably. It's strange.

Simon Erickson: Chris, I almost hope she is a ghost, because if she's real, and she's on the compensation committee, this is terrible corporate governance for Lululemon, right? They're rewarding the company for revenue, gross margin, and operating margin, all of which are not spectacular. They've been steadily declining for the last four years. Either she doesn't exist, or they need to improve how they're compensating their executives.

Hill: Rhoda, if you're out there and listening, please drop us an email. [email protected].

Jason Moser has no position in any stocks mentioned. Simon Erickson has no position in any stocks mentioned. Chris Hill has no position in any stocks mentioned. Matthew Argersinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Lululemon Athletica. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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