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Each top manager will get a lump-sum bonus of $500,000.
In the wake of great organizational change already under way and more to come, consumer electronics retailer Best Buy Co. Inc. is upping the compensation for several top executives.
In a new filing with the U.S. Securities & Exchange Commission, Best Buy, No. 11 in the 2012 Internet Retailer Top 500, will pay each of four executive vice presidents—chief financial officer James Muehlbauer; Shari Ballard, the top manager in charge of international operations; president of U.S. operations Michael Vitelli and chief human resources officer Carol Surface—a lump sum bonus of $500,000.
Each of the four Best Buy executive vice presidents will also be eligible for a restricted stock award valued at $2 million. Best Buy didn’t say why it was increasing the compensation now for its senior management. Also Best Buy has yet to formally comment on published reports that company founder Richard Schulze is working with several investments banks such as Credit Suisse to assemble a deal to take Best Buy private. Earlier this month, Schulze, who in 1966 founded the retail store that would evolve into the Best Buy chain, resigned as chairman, but still holds an ownership stake of about 20%.
But Best Buy can ill afford to lose its top management at a time when the company is undergoing dramatic change—and looking to improve its financial position. For the first quarter ended May 5 Best Buy reported:
- An increase in e-commerce sales of 20%, but didn’t release dollar figures.
- Total sales increased 2.2% to $11.61 billion from $11.36 billion.
- Comparable-store sales decreased 5.3%.
- Net earnings decreased 25.5% to $158 million from $212 million.
Best Buy is also in the midst of an $800 million restructuring program announced in March that includes the closing over time of about 50 big-box stores.