Best Buy has offered former CEO Brian Dunn a severance package valued at more than $4 million.
Dunn stepped down on April 10 while the board investigated whether he used company resources to pursue and inappropriate relationship with a female employee. In its proxy statement filed last week, the company disclosed that it was withholding Dunn's annual bonus pending that investigation.
Dunn's bonus for the company's most recently completed 2012 fiscal year, which was $1.14 million, now will be included as part of the severance agreement. Here's the breakdown:
• Severance of $2.85 million.
• Fiscal 2012 annual bonus of $1.14 million.
• Compensation for unused vacation of $106,742.
• Medical insurance benefits for 36 months.
The severance payments are in addition to Dunn's $1.44 million in fiscal 2012 base salary and other compensation reported last week.
Dunn also holds restricted stock grants of 131,876 shares that were worth $2,542,569 as of May 11. When initially granted, those shares were valued at $3,632,679 but Best Buy's share price has sunk since then. Normally, employees must be continually employed by the company during the three- to four-year vesting schedule. But under the severance agreement, Dunn will be allowed to keep the restricted stock but will be bound by the original vesting schedule and must hold, and not sell "vested restricted stock for at least one year from the applicable vesting date." The ultimate value of those shares will depend on the price of Best Buy's stock once they do vest.
Best Buy also extended the company's standard one-year noncompete agreement to three years. The agreement says Dunn can't "engage or assist others in engaging in any business or enterprise that develops, manufactures, sells, or services consumer electronics, computers and related equipment, whether in brick and mortar stores, online or offline." He is barred from working at companies including, but not limited to, Dell, Sony, Target, Radio Shack/Tandy, and Apple.