By Kathleen Gallagher, Special to the Journal Sentinel Published 7:00 a.m. CT Sept. 29, 2020 | Updated 11:51 a.m. CT Sept. 30, 2020
Now that Briggs & Stratton has changed hands, its time to tackle the elephant in the room: its board of directors.
The small engine makers nine directors in June awarded executives more than $5 million of retention bonuses rather than make a $6.7 million interest payment on debt they incurred. That forced the more than 100-year-old company into bankruptcy and a sale earlier this month to New York private equity firm KPS Capital Partners.
Was the Briggs board a mutual protection society for its top executives and, frankly, its members? Or did the board, through no fault of its own, encounter impossible obstacles and have no choice but bankruptcy?
The mutual protection society theory seems to carry the most weight.
Despite a 20-year trend toward separating the chairman and CEO jobs, Briggs board decided Todd Teske should have both.
The board justified Teskes dual role by saying his tenure at Briggs since 1996 made him most familiar with the company and best-positioned to identify what the board should review and discuss. According to one securities filing: Centralizing power with Teske prevented ambiguity about accountability and the possibility that two leaders might communicate different messages.
Umm, maybe there was some confusion about accountability. The board has a fiduciary duty to shareholders to ask questions of management, evaluate the risks of the strategies and plans management presents for approval, and assess the performance of management against those plans.
What Briggs board missed under the cozy arrangement that handed all the power to Teske is the cold reality that things were getting worse, not better.
Briggs stock price peaked in June 2004 at $44.175 and its market capitalization reached nearly $1.9 billion. Sixteen years later, KPS Capital bought virtually all of Briggs assets for about $550 million.
Briggs demise was not due to a competitor who upended them, not due to a poor product, a former executive observed. Briggs wounds were all self-inflicted.
The alienation of much of the companys top operational talent, frequent factory openings and closings along with massive production re-locations, the accumulation of more than $100 million in restructuring charges since 2015, and problems with a new business management system that caused a steep drop in Briggs ability to ship service parts all drove the downward spiral.
But more telling may be the decision in 2012 to retreat from the US retail market and re-focus on selling engines to lawn and garden equipment makers.
After the strategy shift, Briggs ramped up commercial lawn care acquisitions: Outdoor lighting maker Allmand Bros in 2014; Specialty turf equipment maker Billy Goat in 2015; Fertilizer equipment maker Ground Logic in 2017; Leaf blower maker Hurricane in 2018. You get the idea.
While Briggs was making those acquisitions, companies like EGO, Black & Decker and Greenworks were selling cordless, battery-powered lawnmowers. And players like Global Garden Products and Husqvarna were selling autonomous lawnmowers, while startups like Santa Monica, California-based Graze innovated new ones.
Briggs made an end market pivot rather than an innovation pivot.
Maybe thats no surprise. Briggs board had prodigious amounts of financial, and not much technical, experience and degrees. None of the directors had high-level technical chops. Remember, it was when Satya Nadella, the engineer who studied computer science at UW-Milwaukee, got the top job that Microsoft started to be cool again -- or rediscovered its soul, as he put it in the title of his 2017 memoir.
Despite the downward spiral and lack of strategic innovation, directors got a steady gig and good pay.
Average tenure was nearly 11 years, anchored by the three longest-serving directors: Charles Story (26 years), president of ECS Group, a Nashville executive development company; Brian Walker (18 years), the boards lead independent director and a partner at Huron Capital, a Detroit private equity firm; and Keith McLoughlin (13 years), retired president and CEO of Swedish home appliance maker AB Electrolux.
Directors gave themselves a $5,000 raise in August 2018, bringing their cash compensation to $95,000 in addition to $110,000 of Briggs stock annually and pay for extra duties. Walker, for example, got an extra $40,000 a year for being lead independent director and chairing a committee bringing his fiscal 2019 pay to $244,130. Not bad for attending between 17 and 23 meetings that year.
But with no real technological innovation, Briggs faltered. Debt levels ballooned. Inventories grew. Briggs had $412 million of inventory on its balance sheet in June 2018. Within a year that number had grown by $90 million to $502 million.
Businesses come and go, and some downturns are unavoidable. Buggy whip-making had a bleak future in 1900. But Briggs was one of the premier lawnmower engine companies in the world. Its board and executives had a choice of financially managing the downward spiral or innovating into new markets.
They harvested the business rather than the future.
Kathleen Gallagher, Executive Director of 5 Lakes Institute is a former reporter who was awarded the 2011 Pulitzer Prize for Explanatory Reporting. She is writing a column for the Milwaukee Journal Sentinel(Photo: Milwaukee Journal Sentinel)
Kathleen Gallagher was a business reporter at the Milwaukee Journal Sentinel and the Milwaukee Sentinel for 23 years. She was one of two reporters on the team that won a 2011 Pulitzer Prize for the One in a Billion series. Gallagher is now executive director of 5 Lakes Institute, a non-profit working to grow the Great Lakes region's high technology entrepreneurial economy and culture. She can be reached at Kathleen@5lakesinstitute.org.
Autoplay
Show Thumbnails
Show Captions
THANK YOU: Subscribers' support makes this work possible. Help us share the knowledge by buying a gift subscription.
Read or Share this story: https://www.jsonline.com/story/money/business/2020/09/29/kathleen-gallagher-briggs-stratton-board-failed-focus-innovation/3559641001/
- Exhibition Review | Refond Optoelectronics Shines at 2024 Light+building - LEDinside - March 14th, 2024 [March 14th, 2024]
- Philips Hue launches new indoor and outdoor lighting and a pricey floodlight camera - Tom's Guide - January 30th, 2024 [January 30th, 2024]
- Best Outdoor Lights 2024: Wall lights to solar lights - British GQ - January 30th, 2024 [January 30th, 2024]
- The 10 Best Outdoor Lights of 2024, Tested and Reviewed - PEOPLE - January 22nd, 2024 [January 22nd, 2024]
- Lucid's Helios2 Ray camera tackles outdoor lighting - Imaging and Machine Vision Europe - January 22nd, 2024 [January 22nd, 2024]
- Palm-Reading Locks, Face ID and Moody Porch Lights: 5 New Home Security Products for 2024 - CNET - January 22nd, 2024 [January 22nd, 2024]
- The 3 Best Outdoor Security Cameras of 2024 | Reviews by Wirecutter - The New York Times - January 22nd, 2024 [January 22nd, 2024]
- The Best Smart Outdoor Lights of 2023 - Picks by Bob Vila - Bob Vila - May 7th, 2023 [May 7th, 2023]
- Outdoor Lighting Market 2023 : By Size, Share, Trends, Growth And Regional Outlook 2032 | Hubbell Incorporated - openPR - May 7th, 2023 [May 7th, 2023]
- Transform your home with the right lighting | Sponsored Content ... - citysuntimes - May 7th, 2023 [May 7th, 2023]
- Thinking out loud: We could benefit from nighttime lighting restrictions - La Grande Observer - May 7th, 2023 [May 7th, 2023]
- This New Market is Bringing More Than 100 Casual Furniture ... - Gifts & Decorative Accessories - May 7th, 2023 [May 7th, 2023]
- Peering into the future of bats | U.S. Fish & Wildlife Service - US Fish and Wildlife Service - May 7th, 2023 [May 7th, 2023]
- The Best Cornhole Boards To Play All Summer Long - Forbes - May 7th, 2023 [May 7th, 2023]
- Millions of Birds Are Migrating Across Texas - News/Talk 790 KFYO - May 7th, 2023 [May 7th, 2023]
- I was quoted thousands to transform my decaying garden patio, but I did it myself and saved 7k, it was so... - The US Sun - May 7th, 2023 [May 7th, 2023]
- Scientists find new explanation for why bugs fly into lights - Ubergizmo - May 7th, 2023 [May 7th, 2023]
- How to Get Rid of Mosquitoesand Keep Them From Coming Back - Bob Vila - May 7th, 2023 [May 7th, 2023]
- Bright LEDs could spell the end of dark skies - MIT Technology Review - August 20th, 2022 [August 20th, 2022]
- Lindblad's National Geographic Islander II Debuts in the Galapagos - Cruise Industry News - August 20th, 2022 [August 20th, 2022]
- Save nearly 30% on Kasas dual outdoor weather-resistant smart plug down at $18 - 9to5Toys - August 20th, 2022 [August 20th, 2022]
- Lights out Texas begins with the start of fall migration - CW39 Houston - August 20th, 2022 [August 20th, 2022]
- Health Risks Linked to Leaving Lights on at Night - The Epoch Times - August 20th, 2022 [August 20th, 2022]
- 4 Best Hokolite LED Work Lights: Rechargeable And High-Performance - Men's Gear - August 20th, 2022 [August 20th, 2022]
- Seoul Semiconductor Obtains Permanent Injunctions and Order for Recall against Cell-Phone Products in Europe - Business Wire - August 20th, 2022 [August 20th, 2022]
- Horror comedy 'Bodies Bodies Bodies' asks who the real victims are - Columbia Daily Tribune - August 20th, 2022 [August 20th, 2022]
- Outdoor Lighting Basics - International Dark-Sky Association - July 8th, 2022 [July 8th, 2022]
- Philips is discounting bundles of its outdoor accessories - The Verge - July 8th, 2022 [July 8th, 2022]
- Outdoor Lighting Company in West Houston Offers Year-Round Luxury Lighting and Maintenance - Yahoo Finance - July 8th, 2022 [July 8th, 2022]
- 6 Dublin subdivisions receive grants to beautify the neighborhoods - The Columbus Dispatch - July 8th, 2022 [July 8th, 2022]
- Designer Sabrina Soto dishes on the smart-home products that make outdoor entertaining a snap - Yahoo News - July 8th, 2022 [July 8th, 2022]
- Bring your garden to life with outdoor lighting from B&M, Homebase, Home Bargains, Dunelm, Asda and Aldi - Manchester Evening News - July 8th, 2022 [July 8th, 2022]
- Outdoor Landscape Lighting Market Analysis, Growth Forecast Analysis by Manufacturers, Regions, Type and Application to 2026 |Covid-19 Recovery -... - July 8th, 2022 [July 8th, 2022]
- Making the city that never sleeps safer for birds - Scienceline - July 8th, 2022 [July 8th, 2022]
- Brits are encouraging wildlife in their gardens - The London Economic - July 8th, 2022 [July 8th, 2022]
- Tech Accessories That Are Worth the Upgrade - Futurism - July 8th, 2022 [July 8th, 2022]
- How much is the PlayStation 5 on Amazon Prime Day? - Manchester Evening News - July 8th, 2022 [July 8th, 2022]
- MPOWERD Luci Lights, Turning Ten, Product Expansion, and Impacting the World - PR Newswire - July 8th, 2022 [July 8th, 2022]
- The Worldwide LED Lighting Industry is Projected to Reach $124.7 Billion by 2027 - Benzinga - Benzinga - July 8th, 2022 [July 8th, 2022]
- How to create an outdoor entertainment space to enjoy year round - The Canberra Times - July 8th, 2022 [July 8th, 2022]
- Philips Hue to Introduce Updated Dimmer Switch and 'Wave Linear' Outdoor Lighting - MacRumors - December 23rd, 2020 [December 23rd, 2020]
- Philips Hue expected to introduce redesigned Smart Dimmer, new outdoor lighting in 2021 - 9to5Mac - December 23rd, 2020 [December 23rd, 2020]
- Letter to the editor: Sharing the Light One by One - Canyon Courier - December 23rd, 2020 [December 23rd, 2020]
- Top 10 home trends for 2021: Ways to make it easier to work, exercise, study and relax - OregonLive - December 23rd, 2020 [December 23rd, 2020]
- Our view: Christmas lights and humor are the antidote to 2020 - Joplin Globe - December 23rd, 2020 [December 23rd, 2020]
- Presenting the 2020 AN Best of Design Awards winners, part 6 - The Architect's Newspaper - December 23rd, 2020 [December 23rd, 2020]
- Public invited to outdoor candle lighting service in Accident - WV News - December 23rd, 2020 [December 23rd, 2020]
- Netatmo Video Doorbell With HomeKit Now Available to Order in U.S. and Canada, Ships Early January - MacRumors - December 23rd, 2020 [December 23rd, 2020]
- The origin of Christmas lights | | richmond.com - Richmond.com - December 23rd, 2020 [December 23rd, 2020]
- Twenty-three Cities and Towns in New York State Select CIMCON Lighting Solutions in 2020 - PRNewswire - December 23rd, 2020 [December 23rd, 2020]
- Power crunch turning the lights out in China - Asia Times - December 23rd, 2020 [December 23rd, 2020]
- Rumors Persist of New Apple TV With Stronger Gaming Focus, Updated Remote, and Faster Chip Next Year - MacRumors - December 23rd, 2020 [December 23rd, 2020]
- Elon Musk Claims He Once Reached Out to Tim Cook About Tesla Purchase But Was Refused Meeting - MacRumors - December 23rd, 2020 [December 23rd, 2020]
- Outdoor Living Products Market Study an Emerging Hint of Opportunity in 2020-2027 | Ace Hardware, Century Furniture LLC., Forever Patio., DEDON INC -... - December 23rd, 2020 [December 23rd, 2020]
- Global Fluorescent Wall Lights Market 2020 Analysis by Key Players, End-User, Type, Application, Regions and Forecast to 2025 - The Courier - December 23rd, 2020 [December 23rd, 2020]
- Outdoor and Backyard Lighting We Love - The New York Times - December 23rd, 2020 [December 23rd, 2020]
- iPhone 12 Became the World's Top 5G Smartphone Within Two Weeks of Launch - MacRumors - December 23rd, 2020 [December 23rd, 2020]
- Apple Car Production Slated for 2024 With 'Next Level' Battery Technology - MacRumors - December 23rd, 2020 [December 23rd, 2020]
- Visit The 8 Places In Colorado Designated As International Dark Sky Locations - CBS Denver - October 3rd, 2020 [October 3rd, 2020]
- Solar Outdoor LED Lights Market- Global Market Opportunities, Technological Innovations, Industry Trends & Revenue Growth by the end of 2024 - The... - October 3rd, 2020 [October 3rd, 2020]
- Us Led Outdoor Lighting Market Analysis With Key Players, Applications, Trends And Forecasts 2025 Na - The Daily Chronicle - October 3rd, 2020 [October 3rd, 2020]
- Outdoor LED Lighting Market Potential Growth, Size, Share, Demand and Analysis of Key Players Research Forecasts to 2027 - The Daily Chronicle - October 3rd, 2020 [October 3rd, 2020]
- Another Lively Week for Scarsdale Home Sales - Scarsdale10583.com - October 3rd, 2020 [October 3rd, 2020]
- From outdoor courts to COVID Zone, Amherst Regional adapts to volleyball changes - GazetteNET - October 3rd, 2020 [October 3rd, 2020]
- Mesquite says Good Neighbor Day helps remind its residents to remain active and aware - Star Local Media - October 3rd, 2020 [October 3rd, 2020]
- Outdoor LED Lighting Market Report Global Industry Size, Segment By Key Companies, Types & Applications And Forecast To 2025 | Philips Lighting,... - October 3rd, 2020 [October 3rd, 2020]
- Jersey Skies: The full Harvest Moon will shine bright to begin October - Jersey's Best - October 3rd, 2020 [October 3rd, 2020]
- City of Asheville extends AVL Shares Space initiatives through Jan. 3 - Mountain Xpress - October 3rd, 2020 [October 3rd, 2020]
- Best home products for fall 2020: Coffee makers, fire pits and other cozy tech - CNET - October 3rd, 2020 [October 3rd, 2020]
- How Outdoor Motion Sensor Lights Market Will Dominate In Coming Years? Report Covering Products, Financial Information, Developments, Swot Analysis... - October 3rd, 2020 [October 3rd, 2020]
- Covid-19 impact on Outdoor Landscape Lighting Market Segmented By Application and Analysis till 2026 | Kichler, Lumens, Alliance Outdoor Lighting,... - July 9th, 2020 [July 9th, 2020]
- Artificial Lights Tell the Story of the Pandemic - The Atlantic - July 9th, 2020 [July 9th, 2020]
- Global Outdoor Landscape Lighting Market With COVID-19 Impact Analysis, Outlook and Forecast to 2026 | Kichler, Lumens, Alliance Outdoor Lighting,... - July 9th, 2020 [July 9th, 2020]
- Score a new all-time low on this solar-powered outdoor LED light at $18.50 - 9to5Toys - July 9th, 2020 [July 9th, 2020]
- Zoo Brew! John Ball Zoo teams up with Brewery Vivant to create a beer - WZZM13.com - July 9th, 2020 [July 9th, 2020]
- General Purpose LEDs and Other High-Efficiency Lighting Market Report (2019-2025) | The demand for the Market will drastically increase in the Future?... - July 9th, 2020 [July 9th, 2020]
- Global Outdoor Lighting Systems Market is Expected to Grow at Moderate Pace by 2027 Post COVID 19 Pandemic, Latest Market Research Report by Cognitive... - July 9th, 2020 [July 9th, 2020]
- Outdoor Landscape Lighting Market 2020 Research Report With COVID-19 Update Key Players Analysis, Growth Factors and Forecast to 2025 - Daily... - July 9th, 2020 [July 9th, 2020]
- Outdoor Lighting Market Analysis, Size, Application Analysis, Regional Outlook, Competitive Strategies And Forecasts 2026|Black Diamond, Goldmore,... - July 9th, 2020 [July 9th, 2020]
- Time Switch Market Overview With Detailed Analysis, Competitive Landscape, Forecast to 2026| Intermatic Incorporated, leviton, Legrand - Jewish Life... - July 9th, 2020 [July 9th, 2020]