Comment By Bob L.
Is there any wonder why Americans are losing their jobs, and Companies are leaving this Country so they can pay such outrageous pay packages for Company Executives and CEO’s, it is not all TAXES and Regulations, IT IS GREED.
Did Best Buy here awhile back say that they were going to close some stores and do some down-sizing to save money, Gee that did not last very long, (saving money that is).
Why is every time workers want a good living wage they are told that the Company can not afford it, and they say they are going to have to start laying off to keep their head above water if they are going to make a profit, Gee I wonder why.
Best Buy to Pay Richly for CEO
By Ann Zimmerman and Joann S. Lublin | The Wall Street Journal
Best Buy Co. (BBY) awarded new Chief Executive Hubert Joly a pay package valued at as much as $32 million over three years to lure him to the slumping consumer-electronics chain.
Much of the pay package—which is 2½ times more than the retailer earned in its most recent quarter—is intended to compensate Mr. Joly for money he was set to earn as CEO of hospitality chain Carlson Cos., a job he resigned from last week to take the helm at Best Buy.
Still, some compensation consultants called details of the package unusual. Among other things, it guarantees Mr. Joly, a native of France, more than $6.25 million if he can’t obtain a visa to work in the U.S. by the end of next month and the employment deal falls apart.
Hubert Joly, President and Chief Executive Officer of Carlson, speaks during the 2010 Reuters Travel and Leisure …It calls for Mr. Joly to make a yearly base salary of $1.175 million, but guarantees him an annual long-term cash award of no less than $8.75 million for the company’s coming fiscal year.
Mr. Joly insisted on “make whole” payments to replace sizable compensation that he leaves behind at closely held Carlson because “he’s a sitting CEO doing well,” a person familiar with the situation said. A Carlson spokeswoman declined to discuss Mr. Joly’s compensation.
The Richfield, Minn., retailer defended the arrangement on Wednesday, saying that while it had to compensate Mr. Joly for the money he left behind when leaving Carlson, most of his future Best Buy pay is tied to incentives.
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“The cash compensation is squarely in the mid-range for a CEO of a company the size of Best Buy,” a spokesman said. “This package was developed in consultation with leading search and compensation firms and is in-line with best practice for Fortune 50 companies.”
The 1,400-store chain has been without a permanent CEO since April, when Brian Dunn resigned amid a probe by the board of directors into his conduct with a female staffer. Turmoil surrounding the company has only grown since then: Founder and leading shareholder Richard Schulze has publicly announced an unsolicited proposal to take the company private, and its latest quarterly earnings fell 91%.
Mr. Schulze recently tapped proxy firm D.F. King & Co. as a precautionary step in case he proceeds with a proxy fight to secure influence over Best Buy, said a person familiar with the situation. It is possible he won’t use the company’s services, this person said.
Best Buy and Mr. Schulze have signaled that they remain open to discussions, despite the breakdown last week of negotiations, and have been in intermittent contact since. D.F. King’s role was reported earlier by the New York Post.
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Best Buy has struggled to remake its business, heavily focused on big-box stores, to changes in consumer electronics retailing, including the growth of online retailers such as Amazon.com Inc. (AMZN) and the brand-showcasing stores of Apple Inc. (AAPL).
Mr. Joly, 53 years old, has a record of stabilizing troubled companies, but no prior retailing experience. Many Wall Street analysts were surprised by his selection.
Frank Trestman, a former Best Buy director who left the board in 2010 and has been critical of recent retention bonuses paid to its executives, questioned whether Mr. Joly was the right man for the job.
“If I was on the search committee he would not have been the candidate we needed for the company at this point, because of his lack of retail experience, so if you start from that, any amount Best Buy is paying him is too much,” said Mr. Trestman, a longtime ally of Mr. Schulze. “That doesn’t mean that’s not what it cost to buy him away given the situation,” he added.
Mr. Joly’s pay package is potentially worth $32.3 million, mainly from $20 million in signing awards, according to an analysis for The Wall Street Journal by David M. Schmidt, a senior consultant for James F. Reda & Associates. The New York consultancy, which doesn’t advise Best Buy, is a unit of Gallagher Benefit Services Inc.
The sign-on portion of Mr. Joly’s package “is probably larger than typical” for a new CEO, and only $3.75 million of the $20 million depends on specific performance measures, Mr. Schmidt said.
“All he has to do is show up for three years to get most of it,” he continued. “As a shareholder, you would like to see more strings attached.”
—Sharon Terlep contributed to this article.