Best Buy Gets Worse: CEO Dunn May Be Done, but His Payday Isn't

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Best Buy CEO Brian DunnIf 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.

Moving Forward

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.

Gallery: 7 Reasons Best Buy Won't Be Around in 7 Years
Best Buy


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.



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22 Comments

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jhooks44

no wonder they are closing stores and putting people out of work. i'd do his job for a measly million, where do i get a job application?

May 15 2012 at 6:36 PM Report abuse +1 rate up rate down Reply
rudymvp1

The problem is companies sign these CEO's to guaranteed contracts like they do in pro sports. So once they sign the deal it doesnt matter what happens they will be guaranteed a nice chunk of change if they are fired or cut.

May 15 2012 at 6:09 PM Report abuse +2 rate up rate down Reply
1 reply to rudymvp1's comment
kwikrdrvr

Just like our politicians who collect big pensions for screwing us.

May 15 2012 at 6:14 PM Report abuse +3 rate up rate down Reply
Maggie!!!!

No wonder Best Buy isn't doing so well!!! Cheez lou-eez! This is like paying off the local monster to stay away and not hurt anyone. I wouldn't invest in this company no matter what!

May 15 2012 at 5:53 PM Report abuse +1 rate up rate down Reply
tricdicky1

6.6 million and got laid??? who got screwed??? Best Buys customers..we paid for that and didn't feel a thing, nice work May!!!! LMAO

May 15 2012 at 5:34 PM Report abuse rate up rate down Reply
GrnBer

Corporate America - rewarding bad behavior at its best.

May 15 2012 at 5:30 PM Report abuse rate up rate down Reply
mrross019

And you can bet your ass this Clown is Thanking the Tea baggers in Congress for Blocking legislation aimed at stopping clowns like this guy from getting huge packages they did not earn..I can assure you he is NOT voting for Democrats Or Obama! They want to stop this Redistribution of wealth, Reverse Robin Hood Style

May 15 2012 at 5:22 PM Report abuse +3 rate up rate down Reply
1 reply to mrross019's comment
wanze5

"Tea Baggers ...blocking legislation aimed at stopping clowns like this.....from getting huge packages they did not earn."

Unutterably wrong, mrross019. An obvious Liberal mis-education prohibits you from understanding the intricacies of interlocking committee policies and required legislative restraint, adherence to protocol, the thrust and parry of Congressional politics, the division between Senate and House goals
& the responsibilities and multitudinous areas of disagreement and, likewise, of concession.

It's best to attain some collegial understanding of the process, mrross, before making any declaratory judgements in public. It will mean fewer wads of egg on your face and more hefty kicks in your butt.

May 15 2012 at 8:03 PM Report abuse rate up rate down Reply
bzh484

Take the money out of the directorss salary.
That is their job to make proper contracts with those who work for the company.

May 15 2012 at 5:20 PM Report abuse +1 rate up rate down Reply
dontcalld

have no morals and crash the company and be rewarded - sounds 1%er to me

May 15 2012 at 5:17 PM Report abuse +1 rate up rate down Reply
tptm

Who says the charge wasn't fabricated

May 15 2012 at 5:10 PM Report abuse -1 rate up rate down Reply
dedoolee

Just another example for our children....break the rules, if you're high enough in the company, you might lose your job but who cares.....your separation package will set you up for the rest of your life! So children, don't worry--if you're a CEO-do what ever you want and get paid for it!

May 15 2012 at 5:01 PM Report abuse +2 rate up rate down Reply