Employees asked about canceled bonuses. The CEO replied, 'Leave Pity City.'

By Anviksha Patel

The chief executive of the legendary office-furniture company MillerKnoll has gone viral. And probably not in a manner she would prefer.

In a leaked Zoom call of a MillerKnoll staff town hall last month, CEO Andi Owen addressed concerns from employees about the company's decision to withhold bonuses. It quickly descended into her lambasting staff for complaining about the move.

"Questions came through about, 'How can we stay motivated if we're not going to get a bonus?' " she says in the meeting recording. Owen -- tapped in 2021 by Fast Company as one of the most creative people in business and celebrated that same year in the New York Times for her navigation of the coronavirus pandemic and swing-state sociopolitics -- tells employees of the Zeeland, Mich., company to focus on things the company can control, such as customer service.

From the archives (April 2021):Herman Miller and Knoll to merge in $1.8 billion deal that will create design leader as companies reimagine office

"Don't ask about: What are we going to do if we don't get a bonus?" she said, apparently growing animated, even agitated. "Get the damn $26 million. Spend your time and your effort thinking about the $26 million we need and not thinking about what you're going to do if you don't get a bonus. All right? Can I get some commitment for that? I would appreciate that."

Though she didn't specifically identify the significance of the $26 million figure, the company's operating expenses rose by exactly that amount in its third quarter due to "voluntary and involuntary reductions in the company's workforce and charges for the impairment of assets associated with the decision to cease operating fully as a stand-alone brand."

MillerKnoll's third-quarterly filing showed that the furniture maker -- the product of a 2021 merger of the Herman Miller and Knoll brands, behind products such as the Eames lounge chair and the Saarinen Tulip table, respectively -- expects lower sales in the fourth quarter after posting a decline in orders and sales margins in the three months ending March 4.

Owen added that a former employer told her once that, "You can visit Pity City, but you can't live there."

"So people, leave Pity City," she continued, exclaiming: "Let's get it done."

"You have to be a psychopath to say this stuff to your employees when you are taking a massive bonus. Does she think they won't find out?" asked one Twitter user.

"Plenty going on here but one of many things that leapt out to me was that mere moments after she went with the "be kind to people" bit, she was yelling at workers," another said.

The company said that the widely shared video clip had been taken out of context.

"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," a spokesman said in a statement.

Owen made $5 million last year. The company has yet to say how much she will make this year. The company this year has expensed $15.7 million in stock-based compensation.

MillerKnoll shares (MLKN) have dropped 12% in 2023, compared an the 8% gain for the benchmark S&P 500 .

Other MillKnoll brands include Design Within Reach, acquired by Herman Miller a decade ago and recognized as having made the iconic midcentury designs of Charles and Ray Eames, Isamu Noguchi, George Nelson and others available to a mass, if affluent, audience without an interior designer; the Danish design brand Hay; and Holly Hunt.

-Anviksha Patel

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04-18-23 0816ET

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