The last decennium the textile industry in the western countries has been hard hit. Due to high wage costs most of the textile companies decided to outsource their business activities to low-income countries. Also Picanol, a Belgian producer of weaving-machines is in the same boat.
Since July last year, the company’s management has been taken over by Luc Tack. It’s striking that because the company didn’t succeed in making profit, this manager doesn’t grant itself by any means. Even bonuses and stock options aren’t part of his remuneration. Before giving himself an income, the owner of Picanol wants to get the company back on track and is set to return to the black. This is the very first time that a manager of a Belgian stock-listed company does not receive any income whatsoever. Up to now this had happened particularly by Anglo-Saxon companies.
The economical crisis is the main cause for the financial problems of the weaving-machines builder. Because of the unfavorable economical situation, the demand for its products has dropped enormously. Last year the situation was harrowing because it looked like the company would go bankrupt. Luckily this could be avoided because of an injection of capital of 15 million Euros. In exchange for this amount of money, Luc Tack now possesses 87% of the company. His decision not to receive any income is in large contrast with the earlier period policy of Picanol. It’s also because of the immense amounts of money that were paid to former manager Luc Coene as well as to the Steverlynck family, the company is in difficulties nowadays.
Finally the trade-union is positive about this decision which was exclusively made by the manager. They consider this deed as a sign of confidence towards the future. Now he just has to prove he is worth the given confidence.
In my opinion Luc Tack has made a really courageous decision by refusing any payment for his efforts. We must not forget that he has taken a 15 million Euro risk on saving this company. I think this way he will awake sympathy by all the different stakeholders of the company, this because of several factors. First of all the shareholders won’t mind if they don’t receive a return for their investment. I’m quite sure they will think the following way: ‘Even the manager doesn’t get an income, so why should we get one?’ Secondly he will also encourage employees to give their best and take it to the next level. Maybe it’s his intention to make them feel responsible for his income. Finally, also possible creditors will be understanding and will think twice before complaining about their situation.
Sources: Picanol topman Luck Tack weigert loon (Article 'De Tijd')
I think it is a good initiative of Picanol’s top manager Luck Tack. As Annelies mentioned it will indeed awake sympathy of the stakeholders. But it seems a bit strange that he first had taken the risk of injecting 15 million Euros and that he now will run the business without getting any remuneration.
BeantwoordenVerwijderen