Leadership

CEO who made $5M last year draws backlash after denying employee pay raise requests

In a town hall meeting held in March, the CEO of a leading office furniture company criticised her employees, urging them to "get out of the mindset of self-pity." This came after she was questioned about bonuses during a challenging period for both the company and the wider industry. The video of her remarks has since gone viral on the internet.

During the video, Andi Owen, the CEO and president of MillerKnoll, responded to various questions, some of which she described as "not so nice," about how employees could remain motivated despite the uncertainty of receiving a bonus. 

Owen began by advising the workers to concentrate on aspects that they could influence, such as providing excellent customer service and treating each other with compassion and courtesy.

In a matter of moments, Owen's demeanour shifted, and she appeared visibly irritated, gesturing wildly as she spoke.

She admonished, "Don't inquire about 'What if we don't get a bonus?'" and urged everyone to focus their attention on achieving the $26 million target instead. She requested their dedication to this goal and whispered with emphasis that she would appreciate their commitment. The $26 million is an internal benchmark that the company chose not to disclose publicly.

She proceeded to share a valuable lesson imparted by a previous supervisor. "I recall an ex-boss who once told me, 'You can visit pity city, but you can't stay there.' So folks, let's depart from pity city and concentrate on achieving our goals," she declared before ending with a cheerful wish for everyone to have a fantastic day.

The remark was made towards the end of a 75-minute town hall meeting, where Owen talked about industry developments, upcoming product releases, and brand marketing campaigns. Some employees were upset by her words, prompting Owen to issue a message to colleagues and hold a meeting with company executives to address the issue.

MillerKnoll's fiscal year has yet to conclude, and bonus allocations for both employees and Owen have yet to be finalised. However, despite this, the video clip was swiftly shared on the internet, causing public outrage. A company spokesperson stated that the clip failed to present the complete context of the meeting, which was mostly constructive.

“Andi fiercely believes in this team and all we can accomplish together, and will not be dissuaded by a 90-second clip taken out of context and posted on social media,” MillerKnoll spokesperson Kris Marubio told Motherboard.

MillerKnoll, a manufacturer of top-quality office chairs such as the Aeron, Mirra, and Eames lounge chairs, has faced challenges due to a decrease in demand since the pandemic. As businesses shifted towards the hybrid work model, they were less inclined to purchase new, expensive office chairs in large quantities. 

According to Owen, in a March earnings call, traditional office practices and layouts are no longer as significant as they once were. In addition, as companies downsized their office spaces, they flooded the secondary market with lower-priced, pre-owned products, exacerbating the situation by reducing demand for new products.

As MillerKnoll put it, this has caused a time of "disruption," prompting Herman Miller to purchase one of its major competitors, Knoll, for $1.8 billion in 2021 and merge it with MillerKnoll to cope with the COVID-19 pandemic's effects. Following the transaction, Knoll's previous CEO resigned, placing Owen, the former CEO of Herman Miller, in charge of the newly established furniture conglomerate.

After the share price dropped, Owen made various attempts to reduce expenses, including the recent announcement of the closure of a production facility in Wisconsin, resulting in 162 job losses. The company has now shifted its attention to "hybrid, collaborative work environments" and online sales.

In recognition of her efforts, Owen was awarded bonuses of $1.29 million in the previous year and $1.12 million in 2021.

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