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FB Roundup: Grundfos, Samsung, Warburtons

By James Beech

Due Jensen family heir named new chief executive of Grundfos

The Due Jensen family of Denmark has returned to helm their industrial giant Grundfos for the first time in almost two decades with the succession of next-generation heir Poul Due Jensen.

Due Jensen (pictured), group executive vice president for sales, marketing and service, was appointed as the new chief executive of the world’s largest manufacturer of circulator pumps by Grundfos Holding’s board of directors. The third-generation principal was named after his late grandfather who founded his pump business in his home in Bjerringbro in 1945.

Poul Due Jensen, 49, said he wanted to develop Grundfos’ global leadership position within water and pump solutions, as well as contribute to solving the world’s water and climate challenges and improve the lives of people in collaboration with partners worldwide.

“We have a well-defined and ambitious strategy and, above all, we have a strong management and fantastic employees who are focused on doing their best every day,” he said in a statement.

“In a challenged global economy impacted by the Covid-19 pandemic, we have major tasks ahead in the short term, but at the same time we must look ahead: The strong economic results of previous years give us the best starting point for implementing a new and ambitious strategy.

“I want us to strengthen our focus on a new and customer-oriented structure and focus more on innovation and digital competencies. And then I am passionate about developing Grundfos, so that we continue to be an attractive workplace for talents from all over the world.”

Mads Nipper, 54, the previous non-family chief executive of Grundfos since 2014, declared his departure earlier in 2020. He will become chief executive and group president of Danish power company Orsted at the start of 2021.

Jens Moberg, 58, non-family chairman of the board, said it was clear Due Jensen was the right choice after several highly qualified candidates were assessed for the top job.

“Poul has been an invaluable part of Grundfos since the turn of the millennium and since 2015 he has been a central part of the group management,” Moberg said in a statement.

“Crucial to the decision has been Poul's global experience, strong results, leadership qualities and values. We are pleased that Poul wants to take on the position of chief executive and we see it as an opportunity to build on and accelerate on the great results that have been created in recent years.”

The commercial Grundfos Foundation (Poul Due Jensen Foundation) was founded by its namesake in 1975 and is managed by a board of a dozen members, four of whom should always be family members, according to the founder’s charter. The new chief executive has also served as a board member since 1994.

The foundation owned 87.6% of the share capital in Grundfos Holding. Grundfos’ employees owned 2.3% and the remaining 10.1 % of the shares belonged to the founder’s descendants.

In 2019, net turnover in Grundfos increased by 3% to DKK 27.5 billion ($4.3 billion), the most achieved in Grundfos’ 75-year history. However, the company announced in September it will shed 600 employees worldwide as part of its customer-centric restructuring.

Lee Kun-hee leaves legacy of Samsung success but succession chaos

The death of Lee Kun-hee (pictured), the South Korean titan who transformed his father’s Samsung Trading Company into the $203 billion global tech giant, has left his family with an inheritance tax bill of billions and speculation over the conglomerate’s future.

The chairman of Samsung Group and the richest man in South Korea since 2007, with a fortune of $17.3 billion, according to Forbes, died aged 78, surrounded by his family, on 25 October. The cause of death was undisclosed, but Lee had been in care in a coma since he suffered a heart attack in 2014. He was the third son of 10 children by Lee Byung-chul, the founder of Samsung which was originally an exporter of fruit and dried fish when it opened in 1938. Lee Kun-hee was survived by his wife, Hong Ra-hee, his son and heir apparent Lee Jae-yong (pictured below), 52, and his two daughters, Lee Boo-jin, 50, and Lee Seo-hyun, 47.

“All of us at Samsung will cherish his memory and are grateful for the journey we shared with him,” the company said in a statement.

While the three Lee children are billionaires in their own right and involved in Samsung business and philanthropic interests, all eyes are on vice chairman Lee Jae-yong who served as the de facto principal of the empire since 2014.

However, a smooth succession to formalise Lee Jae-yong’s control looked set to be hindered by fresh allegations of stock manipulation stemming from a controversial merger of two Samsung subsidiaries in 2015 to gain control of the group. Lee Jae-yong denied the charges and awaits the trial. He was released from prison in 2018 after a South Korean court suspended his five-year sentence on corruption convictions.

The Lee family also face a hefty inheritance tax invoice under South Korean law on $16.1 billion worth of Samsung affiliate stocks owned by the late chairman. The amount owed was expected to be known two months after his death and the first payment to authorities will be due by April 2021. Market analysts have speculated on the stake-selling, divestment or merger measures the family may be forced to take to pay the tax while retaining control of their sprawling empire.

Lee Kun-hee, simply known as “the chairman” among Samsung’s 287,000 employees, joined the family business in 1968 and ascended to the chairmanship upon the death of founding father Lee Byung-chul in 1987. His legacy will reside in Samsung Electronics, which Lee Kun-hee steered from a low-quality also-ran in technology to a highly diversified global leader in consumer electronics and the largest of the country’s dominating family-run chaebols.

But success came at a personal cost throughout the life of the reclusive patriarch, nicknamed “the hermit king”. He fought legal challenges from his elder brother Lee Maeng-Hee over shares in their inherited wealth in the early 2010s. He was embroiled in corruption scandals from 2008. He was handed a three-year suspended jail sentence for tax evasion, stepping down as chairman, until he was given a presidential pardon in 2009 and returned in 2010—then his debilitating heart attack in 2014 left him incapacitated.

“In the end, I’m the one who has to change,” Lee Kun-hee told his managers in a meeting in Frankfurt in 1993.

“You have to change from the inside out. Change everything but your wife and children.”

Warburtons shares pandemic dough with staff

British family baking business Warburtons says it gave £2.3 million ($3 million) in bonuses to its employees in gratitude for meeting increased consumer demand during the UK’s first lockdown.

Jonathan Warburton (pictured), 63, the chairman of the market-leading fifth-generation company, said the board closed its head office in Bolton, in northwest England, under coronavirus restrictions in the spring of 2020. Management quickly moved to remote working and video conferencing. However, its manufacturing, logistics and warehouses had to keep operating in person.

“It was like having the Christmas week every week, [but] not a celebration, people were working absolutely flat out,” Warburton said on BBC Radio 4.

“If you ever want to see the character of a business, it was in our case people being asked to work extra hard just to meet demand.”

Warburtons staff members were not immune to the first wave of the pandemic.

“We were effected quite early on by up to 15% of the workforce being affected either directly or indirectly so we struggled like mad to keep everything going. However, throughout most of the summer months our absentee levels on a national scale, particularly in Bolton where we employ the thick end of a thousand people, were below where they would have been 12 months previously.”

The 144-year-old family business spent more than £8 million ($10.3 million) to keep running. Some product ranges were temporarily suspended to focus on the most popular products, namely the bestselling sliced white bread.

The chairman said the company spent more than £5 million ($6.4 million) on making workplaces Covid-secure.

“We gave £2.3 million out as a direct bonus to all the workforce, paid in two separate months in April and in June which was into people’s pockets as a thank you, really at the very beginning to say how much the family appreciated just how much [the business] had done.”

Warburtons decided not to place any staff on the UK government’s Coronavirus Job Retention Scheme, commonly known as furlough.

“We took a decision that it would be inappropriate for a business like ours that was busy and ‘doing so well’ to suddenly take advantage of a scheme that we could have done was wrong. It just doesn’t sit well with us from a values perspective. So we decided that we would continue to pay people. At one stage we had over 100 people who were, let’s say, ‘worried well’ and we continued to pay them while they were isolating.”

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