Andi Owen, the CEO of global office furniture company MillerKnoll, has apologized for telling workers to leave "pity city" after they expressed concerns about not receiving employee bonuses -- despite her receiving $3.9 million in cash and stock bonuses.

In an email to employees, the CEO said that she felt terrible that her rallying cry "seemed insensitive."  

A video clip from a Zoom company town hall meeting shows Owen responding to a submitted question from an employee worried that they would not get a bonus. Employees reportedly earn a median salary of $45,000 per year.

"Spend your time and your effort thinking about the $26 million we need (to meet corporate goals) and not thinking about what you're gonna do if we don't get a bonus, alright? Can I get some commitment for that?" Owen said.  "... I had an old boss who said to me one time, 'You can visit pity city, but you can't live there.' So, people, leave pity city. Let's get it done."

The video went viral drawing negative feedback and media coverage in myriad publications including the Wall Street Journal, Fortune Magazine, CNN, CBS News, and Woodworking Network.

Employee concern
Employees were concerned not just about potential bonuses. According to a report in the Holland Sentinel, employees that spoke to media outlets were threatened with termination. "We have a meeting at the beginning of every shift," the employee wrote in a message to the paper. "Last night the comments were brought up in the meeting and they said if anybody spoke out it wouldn't be good for them and they could be terminated."

Kris Marubio, a spokesperson for MillerKnoll, told The Sentinel on Wednesday that that comment was false. She told the paper that nobody has been directed to do that. "It's not a company policy, it's not something that we're doing," she said. "So, that's wrong and false."

Marubio told The Sentinel bonuses for this year have not been determined because the fiscal year doesn't end until May, and added Owen's bonus hasn't been determined, either.

"We all follow the same bonus determination," she said. "It happens after financial results are reported for the full year."

Quarterly sales drop
MillerKnoll, which ranked #2 on the FDMC 300 list of top North American wood products companies, reported, on March 22, negative financial results for the third quarter. According to the company, consolidated net sales for the third quarter were $984.7 million, reflecting a decrease of 4.4% on a reported basis and a decrease of  2.7% organically compared to the same period last year. 

Orders in the quarter of $885.4 million; were 19.2% lower on a reported basis and 17.6% lower organically versus same period last year.  In addition to current economic uncertainty, prior year sales reflected an elevated pattern driven by the unwind of backlog built-up during Fiscal Year 2022. Additionally, order levels were also elevated in the previous year as a result of the initial post-COVID return to office activity, which has since slowed due to macro-economic conditions.

Gross margin in the quarter was 34.1% as reported and 35.7% on an adjusted basis, which is 110 basis points and 260 basis points higher than the same time last year, respectively. The year-over-year increase in both reported and adjusted gross margin was mainly driven by the realization of recently implemented price increases and benefits from integration synergies, which more than offset higher commodity costs and other inflationary pressures.

Consolidated operating expenses for the quarter were $314.4 million, compared to $310.3 million in the prior year. Consolidated adjusted operating expenses were $277.6 million, down $21.3 million from same time last year, primarily due to a reduction in variable compensation, further optimization of our organizational structure and cost synergies.