The board of Best Buy has decided to collectively pay the company's four top executives $2 million in cash to cement their ties to the retailer, which remains without a permanent CEO and is bracing for a buyout offer from its recently departed founder and chairman, Richard Schulze.
The Richfield-based consumer electronics giant said it will pay $500,000 in retention bonuses each to chief financial officer James Muehlbauer, international chief Shari Ballard, chief human resources officer Carol Surface and its U.S. president, Michael Vitteli, according to documents filed with the Securities and Exchange Commission.
In addition, Best Buy granted each executive 102,669 in restricted stock valued at $1.98 million based on Tuesday's closing price of $19.37.
The cash and stock rewards were made seemingly in defiance of shareholders, who just days ago soundly rejected Best Buy's executive compensation program. The shareholder vote was non-binding.
"To ensure a strong and stable future for the company, Best Buy's board of directors has taken action to retain key senior leaders during the current period of transition," said spokesman Greg Hitt. "Compensation incentives approved by the board are intended to ensure leadership continuity at Best Buy, keeping the team in place and building for the future."
Best Buy's action provided new evidence of how seriously the retailers' board views the need to shore up its management team against what could be a tumultuous summer and fall if Schulze attempts to take the company private.
Wall Street gave new credence to the idea Tuesday, with Best Buy stock rising 5 percent on reports that Schulze is in discussions with investment bankers. Schulze was said to be talking with Credit Suisse among other firms, but it was unclear if, or when, he might make a move.
According to sources close to the situation, Schulze would install his own management team if he regained control of the company, in which he still holds a 21 percent stake.
