Bicycle and outdoor company Scott replaces CEO – who puts up a fight
Published: Tuesday, Apr 2nd 2024, 12:41
Updated At: Wednesday, Apr 3rd 2024, 01:59
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Dispute over Swiss sporting goods manufacturer Scott: the bike and ski brand is parting ways with its former CEO and long-time patron Beat Zaugg with immediate effect. He denounces the decision, but according to the Board of Directors, the dismissal is legally binding.
"I'm still in the office and working", said Beat Zaugg, the long-standing boss and member of the Board of Directors, when asked by the news agency AWP on Tuesday. He is still "on the front line" and will "not simply buckle".
The previous day, Scott had announced that Juwon Kim from South Korean majority shareholder Youngone would be taking over as CEO with immediate effect. The aim of this decision is to drive forward the international development of the brand.
"Of course I can be voted out as CEO, the Board of Directors can decide that," said Zaugg. However, he was not present at any Board of Directors meeting in this regard. Among other things, he criticized the fact that the employees had not been informed of the CEO change in advance.
For the 66-year-old, who currently holds a 47% stake in Scott, it is not inconceivable that he will one day part with his investment. However, a potential buyer would have to "understand the industry and the culture of the company". This is not the case with Youngone, says Zaugg.
Zaugg has managed the company since 1993. Born in Bern, he was Scott's sole shareholder from 2005 to 2013 and transferred 50.01% of the shares to the Youngone Group in March 2015. He thus became a minority shareholder and no longer has sole decision-making power.
Termination binding
Juwon Kim, the new CEO appointed by the Board of Directors, told AWP that the Board of Directors of the operating company Scott Sports decided last Wednesday, March 27, to dismiss Zaugg without notice. He was informed of his dismissal on the same day. The reasons for this would not be disclosed at this time.
According to Kim, the decision was also approved by the majority of the Board of Directors of the holding company Scott Corporation, on which both Zaugg and Kim sit - in the presence of Zaugg. Since then, the management has been working on a smooth transition.
"We understand that it may be difficult for Mr. Zaugg to accept his resignation given his many years as CEO," said the new CEO Kim. However, this is ultimately irrelevant: "The final decision-making body of a company is the Board of Directors, and it clearly has the right to dismiss the CEO."
Majority shareholder supports decision
Kim has been a member of the Board of Directors of Scott Corporation since 2022. According to a statement published by the Board of Directors on Monday, he has many years of experience in investment banking, including at Credit Suisse. Kim also co-founded a start-up company in South Korea before taking over as Head of Growth Strategy and M&A at Scott's majority shareholder Youngone. As CEO, Kim will be advised by Steve Meineke and Mathias Seidler, two industry experts from the cycling and outdoor industry.
Youngone expressed its "full confidence" in the existing management and employees: The manufacturer and distributor of outdoor clothing and equipment for top global brands, founded in 1974, sees itself as a "strong partner and long-term shareholder" of Scott. Youngone has been working with Scott since 1997, has held a stake in the company since 2013 and has been the majority shareholder since 2015.
Scott was founded in the USA in 1958. The company currently employs around 1000 people, 400 of whom work in Switzerland. It has its headquarters in Givisiez in the canton of Fribourg.
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