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Home >> How Best Buy's Old Guard Returned To Its Board
MINNEAPOLIS — Dick Schulze’s return to Best Buy as chairman emeritus, and the naming of top lieutenants Brad Anderson and Al Lenzmeier to the company’s board, signals an end to the divisiveness created by his six-month-long takeover attempt.
The rapprochement also suggests agreement between Schulze and president/CEO Hubert Joly on the strategic direction of the chain, and speaks to Joly’s diplomatic skills in accommodating the founding father and majority shareholder of the company he now leads.
It’s a far cry from last spring, when the former chairman was forced out for failing to disclose a questionable relationship between his hand-picked CEO Brian Dunn and a female subordinate.
Rather than accept the honorary position of chairman emeritus that was first offered at the time, Schulze pursued a buyout of Best Buy with private equity investors and recruited former CEO and vice chairman Anderson, and past president/COO and co-vice chairman Lenzmeier, to help devise a go-forward business plan.
That effort ended when Schulze failed to come up with the cash for a qualified acquisition bid by an already- extended Feb. 28 deadline.
While some observers blame the old management team for Best Buy’s current woes — particularly its failure to prepare for the onslaught of e-commerce and its illfated forays in Europe and Asia — the trio must also be credited with developing the category-killer concept in CE; switching to a non-commissioned sales force; fomenting the successful Best Buy Mobile and Geek Squad businesses; and vanquishing past competitors to become the No. 1 CE retailer in the world.
Their collective experience and business skills will surely be an asset as Best Buy implements a turnaround. As Joly wrote in a letter offering Schulze the chairman emeritus post, which was released in an 8-K filing, “I am eager for you to return to the company that you created and share your wisdom, insight and passion … I believe that you have a vital role to play at this crucial time in the company’s history.”
Joly had also forged a friendship with Anderson while running Vivendi’s video game business, and later appointed him to the board of Carlson, the hospitality company he previously led as CEO. Anderson was largely responsible for bringing Schulze and Joly together both physically and spiritually, the Minneapolis StarTribune reported, as was Joly’s decision to leave Best Buy’s store count largely intact, rather than institute the wholesale closings favored by his interim predecessor Mike Mikan.
“Over the past several months I have come to know and respect Hubert and have a high regard for the work he and his executive team are doing to revitalize Best Buy for the benefit of all stakeholders,” Schulze said in a statement.
While largely ceremonial, the chairman emeritus olive branch extended to Schulze will assure him high-level briefings and an active role in Best Buy’s corporate culture. According to the 8-K, other perks include a $2.1 million consultation stipend, an annual base salary of $150,000, lifetime medical benefits for Schulze and his family, lifetime use of his headquarters office, a personal assistant, a registered security ID and parking privileges.
But clearly more important to the billionaire than health coverage is his legacy, which was addressed by the last proviso of Schulze’s chairman emeritus terms: “Additionally, the company will depict in the corporate headquarters important milestones throughout the company’s history, substantially as has been displayed in the past, which will be updated from time to time for recent events as appropriate.” — Additional reporting by Steve Smith
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