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Letter from REI Board Chair, Steve Hooper, to REI Employees

REI Staff|

REI employees,

I’m Steve Hooper, chair of REI’s board of directors. At a town hall meeting at REI headquarters just a few minutes ago, we shared an important change to the leadership of REI. Jerry Stritzke has resigned from his role as REI President and CEO and will be leaving the co-op on March 15. Eric Artz, Executive Vice President and Chief Operating Officer, will serve as interim CEO, effective immediately.

Here are some words from Jerry to all of you and a statement that we released to media this morning.

We wanted to tell you, the employees of REI, as quickly as possible. This is difficult news, and both Jerry and the board of directors want to be straightforward about why he’s leaving.

The board formally accepted Jerry’s resignation yesterday, February 11, following an investigation into the facts and circumstances surrounding a personal and consensual relationship between Jerry and the leader of another organization in the outdoor industry.

The investigation was conducted by an external law firm and overseen by the board. Jerry resigned because he and the board agree that the facts led to a perceived conflict of interest, which he should have disclosed under the REI conflict of interest policy, which requires every REI executive to model the highest standard of conduct.

The investigation also thoroughly evaluated the working relationship between the REI Co-op and the partner organization and found that there was no financial misconduct. It’s important for me to emphasize—and for you to know—that the board is otherwise satisfied that our expectations have been met regarding how the two organizations should work together.

The board of directors has a significant responsibility to REI, however, and the conclusions of the investigation were clear. Errors of judgment were made, and Jerry and the board agree that it is time for a new leader to take the co-op forward.

Jerry has been an excellent CEO for REI and together, all of you have delivered outstanding results for the co-op during remarkably challenging times in retail. The co-op is stronger today than when Jerry joined. We are confident that you have the right strategy, great talent and a very strong leadership team.

Eric, after six years of service to REI, steps forward at a time of financial strength and positive momentum. He is a seasoned leader and passionate steward of REI. He is deeply committed to the purpose of the co-op and will do a great job as the board considers the longer-term needs for REI. You are in good hands.

Before we move ahead into this next chapter, let me thank all of you, on behalf of the board of directors, for all you do as employees of REI. This is a special organization with a long history and, with your support, the co-op will continue to act in the best interests of our members and the outdoors.

Finally, we would like to thank Jerry for his tireless work on behalf of the co-op. We will always be grateful for his drive, dedication and many contributions to the co-op.

Thank you,

Steve
REI Co-Op
REI Staff

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17 Comments

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  2. Monte Dammarell

    This is difficult to fathom. Jerry has been an outstanding leader both inside and outside the company. He has taken the Coop to a much higher level than ever before. I fully support transparency with company leadership and the #metoo movement. That being said I think the politically correct movement has gone too far. According to released statement Jerry had a consensual relationship with another person NOT under his leadership. It also appears there was an investigation which found no malfeasance or behaviors that would impact the Coop. How many personal relationships within REI boundaries have been formed and may even continue over time. I’m sure the answer would shock the board. The punishment for Jerry’s supposed indiscretion seems to be extremely harsh.
    I’m sure Eric will do an excellent job leading this great company. I just don’t understand “throwing the baby out with the bath water.” Seems extremely punitive

    Reply
    • Ontogenesis

      What does this have to do with #metoo or “political correctness”? Sounds like a consensual relationship between two adults of equal power (between Jerry and the leader of another organization in the outdoor industry)? Conflict of interest and not disclosing will get you fired at most companies.

      Reply
  3. Amy Marcitta Brown

    Not really sure HOW to feel. Definitely some mixed emotions. On one hand I understand that Jerry’s position requires certain conduct and on the other hand I feel bad his personal life has to be so public now. I get it from both sides. Thank you Jerry for everything.

    Reply
    • Alexia

      Where was adultery mentioned? It seems it was a consensual relationship between two adults working for competing companies. I don’t see a mention where either was married and straying from the relationship.

      Reply
    • Norman

      What a person does in the bedroom is no business of the board UNLESS it interferes with the business sense of the executive. The wrongdoing was failing to DISCLOSE a potential conflict of interest. It was not for actually having the relationship.

      Reply
  5. Janice Oliver

    I agree with Monte that this seems harsh but since I do not know the details (nor want to) of the consensual relationship, I also feel mixed emotions about Jerry’s departure from REI. In the end I have to trust that the decision was made with the hopes of the best outcome possible for REI in this difficult situation.

    Reply
  6. Norman

    Having been a student of corporate governance, I fully understand the necessity of conflict of interest disclosures. It’s part of an executive’s fiduciary duties. With that said… Jerry only committed policy ‘fail’ not a moral fail, and the co-op was not actually harmed. There were other remedies available. He could have had his bonus denied, even retroactively recovered for prior years. These types of decisions must be made, according to board duties, in the best interests of the co-op. So the board must ask whether the decision to have Jerry resign was actually beneficial, not in the optics/PR department, but as far as business sense. In the finance world, we would ask whether the decision created economic value. Knowing only the sparse facts presented in this memo, I feel the board’s decision was rather draconian. But again, perhaps there were details left out intentionally.

    Reply
  7. wb

    Are you people asleep? Sales and revenue flat. Return policy drastically altered (for the worse) tens of millions squandered on a new corporate campus in Bellevue. How many of you have seen cheating Jerry’s salary? It’s outrageous and buried deep inside the annual report. I beg you to search for it and see for yourself. And who made all this possible? The REI BOD (Board of Directors). It’s turned into a “good old boys club” where they maintain control by allowing only them to present new BOD members and very little transparency. In the past any REI coop member could throw their hat in the ring to serve on the Board but not any more. They’ve increased their BOD compensation and made it impossible for people like you and me to apply or run for BOD membership. It’s not the same coop we knew and loved folks. Wake up, take action and demand results. The BOD needs to be held responsible and don’t fall for their public affairs BS…every external email and communication is carefully crafted by a team of experts. I know first hand and if you don’t believe me ask anyone on the inside and they will confirm. It’s time to take our coop back.

    Reply
  8. Laura

    I agree with Janice. But if we’re going full transparency, lets do so. Who/what is the partner company? That seems relevant here.

    Reply
  9. Claudin

    Jerry Stritzke’s lack of transparency showed that he is not as trust worthy as he agreed to be in his employment contract. This sales environment is highly competitive. Timing has profound effects. A competitor finding out about a strategic campaign or product plan ahead of its launch can spell fizzle instead of WHA-BAM!

    It’s important to allow reality, even when it’s uncomfortable and very disappointing. I liked where he was taking us but it is what it is.

    Since the facts presented here clearly show that “political correctness” had nothing to do with the board’s decision, I can only assume that Monte is not actually as supportive of the #metoo movement as he claims.

    Reply
  10. jim

    One question – has the person at the other organization also exercise their integrity and left their job?
    One amusement – ironic isn’t it that you followed the news about Jerry with stories of people finding love in the outdoors and – at least indirectly – through REI.

    Reply
  11. Michelle Mainor

    Thank you Jerry for all that you have done with the Coop. You are a great leader and I wish you all the best!!!

    Reply