Brad Anderson, CEO of Best Buy Co. Inc., took home $49.3 million in total compensation last year, the bulk of it from stock options gains. But parts of Anderson's short-term compensation went down last year as Best Buy failed to meet some of its performance goals.
Like many retailers, Best Buy has been hit by the slowdown in consumer spending. Although customers spent more per item on such big-ticket items as flat-panel TVs and video game players, store traffic has slacked off in recent months as worried shoppers pull back on discretionary purchases.
For the year ended Feb. 29, the company expensed $413,635 worth of stock awards for Anderson, 69 percent less than the amount they expensed for him last year.
His non-equity incentive pay also decreased by 24.8 percent. Best Buy's short-term incentive is based on a performance model called "Economic Value Added." The board determined EVA for last year was $438 million, less than the target of $465 million.
Still, his total compensation was a 124 percent increase from last year. The take home was boosted by $46.1 million in gains from stock options issued in prior years.
In July, Anderson adopted a pre- arranged trading plan that complies with Rule 10(b)5-1 of the Securities and Exchange Commission. With many of his long-term options set to expire, he filed the plan to cover option exercises and stock sales as part of his personal program for long-term asset diversification and tax and financial planning. The plan expires April 23.
As he's done in previous years, Anderson declined the stock options he was due as part of the company's long-term incentive plan and instead directed them to a discretionary award pool to be distributed to employees who are not otherwise eligible to receive them.
Bradbury Anderson, CEO
Total compensation: $49,261,495 for the year ended Feb. 28, 2008.
Salary: $1,172,995
Non-equity incentive pay: $1,994,092
Other compensation: $16,151
Exercised stock options: $46,078,257
Fiscal 2008 total return to shareholders: 6.6 percent
