Departing Proximus CEO Frogmarched Out to Chorus of Staff Boos

The head of Proximus is leaving earlier than planned amid staff protests.

Iain Morris, International Editor

September 16, 2019

4 Min Read
Departing Proximus CEO Frogmarched Out to Chorus of Staff Boos

Some company bosses quit their jobs to the sounds of choked testimonials from teary-eyed employees. Others are pelted with rotten eggs on their way out of the door. It seems Dominique Leroy, the CEO of Belgium's Proximus, belongs in the latter category.

The boss of Belgium's telecom incumbent was supposed to leave in December to become the new head of KPN in the Netherlands. But that's not soon enough for many of the operator's 13,000 employees. After protesting workers last week reportedly downed tools, and left stores and call centers abandoned, the Proximus board forced Leroy to bring forward her departure date. Once she's cleaned out her in-tray and bagged up a few personal possessions, she'll be leaving with her head under a coat at the end of this week.

The update came in an official statement published on the Proximus website late Friday. In a nod to the upheaval of previous days, the Proximus board said its aim was to "restore a serene climate within the company." Leroy's main job this week will involve transferring all her files to Sandrine Dufour, the Proximus chief financial officer, who will take over as CEO until a permanent replacement is found. Stefaan De Clerck, the company chair, will be Dufour's wingman as she embraces the extra responsibility.

Figure 1: Proximus is hoping for a 'serene climate' after the recent turbulence, Proximus is hoping for a "serene climate" after the recent turbulence,

Just how did Leroy become such a villain to her workforce? The roots of her unpopularity can probably be identified in a January statement about the dreaded "digital transformation." Despite alluding to new recruitment efforts, Proximus said it might have to cut about 1,900 jobs in the next three years in line with a "planned workload reduction." It would target an extra €240 million ($265 million) in savings by 2022, it said.

Staff are reportedly incensed that Leroy will remain as a lame-duck CEO until nearly the end of the year while negotiations take place on restructuring. It seems many employees feel she will have little interest in or commitment to this process as she prepares to join KPN. The details of her remuneration package at KPN have probably not endeared her to employees worried about job security, either. Paid €522,000 ($576,800) in basic annual compensation at Proximus, she'll receive €935,000 ($1.03 million) at KPN. To critics, that is the kind of pay deal that illustrates a growing wealth gap in society and explains why populism is on the march.

In addition, trust levels are probably low days after the stock market regulator began investigating Leroy for her sale of company shares in August. Authorities will be concerned that Leroy sold shares knowing she would quit and that news of her departure would depress the share price. It has fallen about 2% since early August, and Leroy has been forced to deny any wrongdoing in a statement published on the Proximus website. "I regret that this perception has been created, this is not in line with my values where integrity and transparency are very high," she said.

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The Leroy affair could be sign of what's in store for other telecom chiefs amid discontent about automation and anger at executive pay. Just last week, Spain's Telefónica warned of layoffs in a statement about the impact of technology, noting that customers increasingly use online services to buy phones and that ageing networks are being shut down. Reports suggest nearly one in five jobs in Spain may go. In the meantime, Group CEO José María Álvarez-Pallete López has one of the European telecom sector's most generous, seven-digit pay packages to go with his 13-syllable name. Last year, his total compensation ticked up €51,924 ($57,378), to €5,407,782 ($5,975,778).

The recent negative publicity could be awkward for Leroy as she starts work at KPN. Maximo Ibarra, her predecessor, collected just €657,000 ($726,000) in basic pay in 2018 (although he took home €1.49 million -- $1.65 million -- in total compensation), and KPN is also shedding jobs. Last year it cut more than 6% of all roles, leaving it with 12,431 employees, and Ibarra made ominous references to the D word in his preface to the 2018 annual report. "We want to transform our operations to be more lean and digital," he wrote. "Faster digitalization and automation, which are inherent to the telecom industry, will lead to more organizational simplification and result in around €350 million [$387 million] net indirect opex savings over the period 2019-21." Digitalization enthusiast Leroy will have to tread warily.

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— Iain Morris, International Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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