The head of MillerKnoll Inc., the upmarket furniture-maker known for iconic Herman Miller office chairs, has come under fire for telling employees to leave “kind city” and stop asking for bonuses.
Those words from chief executive Andy Owen have provoked criticism on social media – and they could soon come back to haunt him as Owen’s own pay package for the current period is expected to be revealed by August.
He was paid roughly $1 million in salary last fiscal year, plus about $4 million mostly from stock and options, an annual incentive plan, and covered expenses, such as access to a company jet.
Compensation is a hot-button topic for both employees and executives, especially when the economy is going through a rough patch, said Tony Guadagni, a senior principal at consulting firm Gartner Inc.
Scrutiny on executive pay levels is intensifying as rising inflation hits household budgets and the US experiences widespread labor shortages, which has pushed many workers for higher wages.
“I think in times like these, where the news cycle has been dominated by inflation for 18 months, where employees feel that their paychecks are not going to go the same way – organizational leadership would be wise to be sensitive to that,” They said.
The 90-second leaked recording includes Owen chiding employees at the end of a 75-minute internal company meeting for estimating too highly of the company’s annual bonus payout.
“Spend your time and your effort thinking about the $26 million that we need, and don’t think about what you’re going to do if you don’t get the bonus,” Owen said in the video, referring to an internal metric. Are.” “I had an old boss who once told me, ‘You can go to the City of Mercy, but you can’t stay there.’ So people, have mercy, leave town.”
After the meeting, Owen sent an email to employees and met with leaders across the company to address their concerns, according to a person familiar with the situation.
Millernall spokesman Chris Marubio said in an emailed statement, “Andy has full faith in this team and what we can all accomplish together, and is not disappointed that a 90-second clip taken out of context and posted on social media Will be.”
The concerns of the Michigan-based company’s employees about a potentially shrinking bonus pool come amid declining MillerNall sales this year as businesses pulled back on spending. Companies are reducing their real estate footprint as many employees continue to work remotely even after the pandemic, reducing demand for office furniture.
Salaries of other CEOs have been in the news in recent months in the wake of massive layoffs. Goldman Sachs Group Inc. Some, from David Solomon to Morgan Stanley’s James Gorman, have already accepted pay cuts, while others have yet to report their most recent compensation packages.
Although CEOs make about 300 times the average employee, only a third of the rank-and-file surveyed by Gartner thought the pay disparity was unfair. But as economic concerns mount, there’s a chance that employees could become sensitive to the difference in their pay and in the C-suite, Guadagni said.
“I wouldn’t be surprised if we start to see the tide turn a little bit on that, especially depending on what happens with the economy over the next six to 12 months,” he said.
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