Best Buy Gets Worse: CEO Dunn May Be Done, but His Payday Isn't
If you want to make an easy $6.6 million at Best Buy (BBY), find a way to be its next CEO and then commence an inappropriate relationship with an employee.
The struggling retailer's audit committee has found that even though ex-CEO Brian Dunn did have a "close personal relationship" with a female employee that violates Best Buy's policy, he will still receive a severance package worth roughly $6.6 million.
I wonder how much he would have gotten if he had carried on two inappropriate relationships?
Break the Rules, and We All Pay for It
The audit committee points out that Dunn didn't misuse company resources or Best Buy's aircraft in the relationship, and that's more than can be said for what happened at Hewlett Packard (HPQ) two years ago.
HP's then-CEO Mark Hurd was let go after he was caught having an inappropriate relationship with a company contractor. HP alleges that he falsified expense reports to conceal the relationship, which only came up after the contractor accused him of sexual harassment.
If you think that should be enough for you to get expelled without your golden parachute, think again. Hurd received a severance package valued at roughly $40 million at the time.
Corporate America works, but it can seem awfully shady when incompetent or rule-breaking CEOs get rewarded with exit packages that cost shareholders millions.
Best Buy loses another one
Dunn isn't the only one leaving Best Buy as a result of his poor judgment.
The struggling chain's audit committee is forcing founder Richard Schulze to resign as the company's chairman after learning that he knew about Dunn's actions months before the company began its own investigation.
We'll have to wait and see whether he also gets to cash in on the incident, but the board has decided to give Schulze the honorary title of chairman emeritus. He will be allowed to remain on the board until his term expires next month.
Shares of Best Buy traded at a new 52-week low earlier this week, so investors obviously feel that Best Buy has bigger problems on its hands at the moment (like whether or not it will even be around in the future).
The market is unimpressed with the chain's turnaround strategy, which involves closing down underperforming stores and shaving costs that it will ideally pass on to consumers in an attempt to provide more competitive pricing. Its latest quarter also showed a company struggling to keep its stores popular.
Along the way, Best Buy is still trying to hunt up a new CEO. Whomever the eventual hire is will have to brush up on which policies are worth breaking. There are millions to be made that way, apparently.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Best Buy.