Best Buy CFO to Exit; Schulze May Be Nearing Bid
Best Buy Company said Tuesday that Chief Financial Officer (CFO) Jim Muehlbauer, who was recently offered a retention package worth about $2.5 million dollars, will leave the company by early February.
Richfield-based Best Buy said that Muehlbauer—who joined Best Buy a decade ago and has served as CFO since 2008—will stay on with the retailer through its 2013 fiscal year, which concludes February 3.
The company, meanwhile, has begun searching for a successor. If it hires a replacement prior to February, Muehlbauer will exit the CFO post but stay on to help facilitate the transition, according to documents filed Tuesday with the U.S. Securities and Exchange Commission (SEC).
Muehlbauer said in a statement that he has “appreciated the opportunity to have served this organization over the past 10 years, and I look forward to supporting a smooth and orderly transition to my successor.”
A Best Buy spokeswoman on Wednesday declined to provide further information about Muehlbauer’s planned exit.
“We thank him for his many contributions and, of course, wish him well in the future,” Hubert Joly, who took over as Best Buy’s president and CEO in September, said in a statement. Muehlbauer’s successor will “have his high degree of integrity and passion for our business,” Joly added.
News of Muehlbauer’s planned departure comes several months after the company disclosed in regulatory filings that it had awarded retention packages, collectively worth about $10 million, to four executives—including Muehlbauer. The company said at the time that the awards were “necessary to enable a stable CEO transition and appropriate continuity of leadership.”
Each of the executives received $500,000 in cash—which could be revoked if a recipient voluntarily left Best Buy during the first year after the company named a CEO, according to regulatory filings. They were also awarded a $2 million stock bonus that would vest over three years.
Those awards, however, were granted prior to Joly taking the reins. And a report by the Star Tribune indicates that Muehlbauer will step down so that Joly can recruit his own team.
According to a Tuesday filing with the SEC, Muehlbauer will retain the stock bonus. The filing doesn’t explicitly state whether Muehlbauer will retain the $500,000 cash payment, but it says that he will receive a lump sum payment of $1.4 million as part of his separation agreement.
As part of the deal, Muehlbauer has agreed that he will “not compete with Best Buy or solicit its employees, customers, suppliers, and certain other persons on a worldwide basis for a period of one year” following his exit, according to the filing.
Muehlbauer served as CEO under Brian Dunn, who resigned in April following a scandal involving allegations that he had “an extremely close personal relationship with a female employee.”
Other Best Buy leaders who have left the company this year include Ryan Robinson, CFO for Best Buy’s U.S. operations; Geek Squad founder Robert Stephens; Chief Marketing Officer Barry Judge; and Dave Deno, CFO of Best Buy’s international division and president of its Asia region.
In the wake of the Dunn scandal, founder Richard Schulze resigned from his position as chairman and has since been working on a private takeover attempt. In August, he struck a deal with the company’s board that grants him access to financial information, as he attempts to formulate a formal offer.
Under the agreement, Schulze has until late November to make an offer. If the board rejects the bid, he can try again in January.
A Tuesday report by the Star Tribune indicates that Schulze has made “considerable progress toward making a bid,” and his team may soon be allowed to interview eight to 10 key company executives. The discussions would reportedly help Schulze develop a business plan to present to potential investors.
Meanwhile, the company last week announced that it has appointed Scott Durchslag—former president of online travel agency Expedia Worldwide—as senior vice president and president of online and global e-commerce, a role in which he will oversee bestbuy.com.
He will report to Stephen Gillett, the former chief information officer of Starbucks, who joined Best Buy in March and serves as president of digital, global marketing, and strategy.