Lululemon Athletica inc. (LULU), Chesapeake Energy Corporation (CHK): The Secret Club No CEO Wants to Join

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Deep in the bowels of the throbbing metropolis there's a little hideaway, where one pushes a slot and whispers a password...golden parachute. On odd days it's...exit package. Inside some of the wealthiest and least missed CEOs gather for their overflowing champers (champagne) and sweetmeats.

On the mahogany paneled walls loom the portraits of some of the charter members inducted this last year: Andrew Mason of Groupon Inc (NASDAQ:GRPN), Aubrey McClendon of Chesapeake Energy Corporation (NYSE:CHK), Ron Johnson of J.C. Penney Company, Inc. (NYSE:JCP), and the newest member, Christine Day of Lululemon Athletica inc. (NASDAQ:LULU), all of whom left willingly or unwillingly under a cloud.

Lululemon Athletica inc. (NASDAQ:LULU)

No matter the reason for the invitation to join, whether it's mismanagement like Johnson, conflicts of interest (McClendon), inability to create a moat (Mason), or a disregard for the customer (Day), each former leader gets to chat about how nice it is to spend more time with the family. There's always room for one more at this very exclusive club of wealth destroyers; several gilded picture frames hang empty for new members.

This is truly the club that personifies the Groucho Marx aphorism,"I would never join a club that would have me as a member."

All hail our newest member

Some members get in by the skin of their teeth like Day of Lululemon who could have waited out the storm over the booty-revealing luon yoga pants. She is probably the least deserving member as her resignation sank the stock 18%. Generally when members leave their companies the stock shoots up in a relief rally.

Lululemon Athletica inc. (NASDAQ:LULU)'s stock had soared under her leadership with a scarce inventory marketing strategy and a culture attracting incredibly loyal customers. But a refusal to address a well known quality control issue of such an embarrassing nature was a pivotal mistake for such a battleground momentum stock.

Lululemon Athletica inc. (NASDAQ:LULU) down 18% actually looks better now that the "sheer in the rear" pants debacle is behind them (I apologize for that pun). What I originally liked about the company in so many posts were its community involvement, its research and development into new performance fabrics, the aforementioned insanely loyal customers, and its strong social and web presence. These all loom larger as reasons to get back in, especially after the company actually beat on both top and bottom line when it reported on June 10.

Others are more deserving of the membership, like Ron Johnson, who not only was overpaid but lost millions in market cap, profits and dividends for shareholders of J.C. Penney Company, Inc. (NYSE:JCP). The real test of caliber for the club is how well the stock rebounds after the CEO joins this club. J.C. Penney, Chesapeake Energy Corporation (NYSE:CHK), and Groupon Inc (NASDAQ:GRPN) all surged after these CEOs left.

Not just anybody can join; you'll never see Bob Iger of The Walt Disney Company (NYSE:DIS) or Warren Buffett of Berkshire Hathaway Inc. (NYSE:BRK.B) darken these doors. They care too much for their shareholders. But there are a few promising candidates.

Who's next to learn the secret handshake?

One is Michael Jeffries of apparel retailer Abercrombie & Fitch Co. (NYSE:ANF) who  fomented a PR nightmare for the company with his "cool kid" exclusionary sizing controversy. Since the furor, the company has tried to assuage angry teens and customers with apologies, scholarships, and an anti-bullying campaign. Jeffries is also, to put it baldly, kind of a weird dude, currently being sued by a pilot on his private plane flight crew for age discrimination. The suit brought to light a bizarre list of rules for Jeffries' flight crew and more unflattering headlines.

Jeffries won't leave the company, and his $100 million golden parachute is so pricey the company can't afford to make him go; it has also likely deterred private equity suitors. He was one of the most highly paid CEOs with one of the worst performance records.

The company reported disappointing numbers in May with same store sales declining by double digits as well as a reported loss of $0.09 earnings per share and shrinking margins. Predictably, the stock sold off 10%.

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