Best Buy Announces Members of CEO Search Committee
Best Buy Company, Inc.'s board of directors has named the members of a committee tasked with finding a replacement for former CEO Brian Dunn.
Richfield-based Best Buy said Friday that Kathy J. Higgins Victor will chair the search committee. Other members-all of whom serve on the company's board-include Lisa Caputo, Ronald James, and Sanjay Khosla.
The committee will oversee a global search process to identify both internal and external candidates-and interim CEO G. Mike Mikan, who has served on the company's board since 2008, will be considered.
Within the next few weeks, Best Buy will announce the search firm that will assist the committee in the process of selecting a new chief executive. The company said earlier this month that it would interview six search firms before making its selection.
Best Buy expects the search process to be completed within six to nine months.
Most of the search committee members have strong Minnesota ties. Higgins Victor is founder of Minneapolis-based executive coaching firm Centera Corporation; Caputo is an executive vice president with New York City-based Travelers Companies, which has major operations in St. Paul; and James is president and CEO of the Center for Ethical Business Cultures at the University of St. Thomas in Minneapolis.
Khosla, meanwhile, is an executive vice president with Northfield, Illinois-based Kraft Foods.
Dunn abruptly resigned on April 10. Shortly after that, news surfaced that the company's board is investigating allegations that he used company resources to carry out an inappropriate relationship with a female employee. Best Buy did confirm that it's conducting an investigation but neither confirmed nor denied that it involves a relationship with a subordinate.
The company did, however, tell the Star Tribune that it would publicly release the findings of its investigation and vowed to “take appropriate action.” The Minneapolis newspaper reported last week that the company has hired “an elite legal team”-including a former U.S. attorney and a former top official with the U.S. Securities and Exchange Commission-to conduct the investigation.
Bloomberg on Friday reported that Dunn may be eligible for a severance package of as much as $3.35 million. Citing a proxy filing from last year, the news outlet indicated that he's entitled to up to $1.15 million in stock options if his departure is determined to be voluntary-and he would get an additional $2.2 million in cash if his departure were deemed involuntary. But if the board determined that he was fired for cause, he could get nothing.
When the company announced Dunn's exit, it said the departure was part of a “mutual agreement that it was time for new leadership to address the challenges that face the company.”
Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, told Bloomberg that “it is rare that a CEO gets nothing” upon leaving a company. Given the high costs of litigation, companies typically opt to pay something, he said.
Greg Hitt, a spokesman for Best Buy's board, declined to comment beyond telling Bloomberg that the severance agreement will be disclosed when it is completed.