Best Buy Expands Noncompetes To More Upper Mgmt.
Following a tumultuous year in which Best Buy Company, Inc., experienced significant leadership changes, the Richfield-based electronics retailer has reportedly expanded its noncompete agreements from senior executives like CEO Hubert Joly down to vice presidents and directors.
In exchange for future stock awards, the executives reportedly must commit to not working for a Best Buy competitor or using ideas or experience gained there for a year after they leave, according to a Star Tribune report. A Best Buy spokeswoman told the Minneapolis newspaper that such agreements are routine among large corporations, although some experts reportedly question whether Best Buy needs such agreements, which are traditionally used to protect customer information or proprietary technology.
The move appears to be part of a larger effort to regain leadership stability. Last year, the company named Joly CEO in the wake of a scandal involving the company’s former chief executive, Brian Dunn. Other Best Buy leaders to depart in the past year or so include digital executive Stephen Gillett, Dave Deno, who served as chief financial officer of Best Buy’s international division and as president of its Asia region, George Sherman, the executive in charge of Geek Squad, and Chief Financial Officer James Muehlbauer, who was replaced by Sharon McCollam. Best Buy doled out millions of dollars in bonuses in an attempt to retain certain leaders last year.
Best Buy also dealt with a drawn-out takeover attempt by founder Richard Schulze, who ultimately rejoined the company as chairman emeritus. (Hatim Tyabji replaced Schulze as Best Buy chairman last year.)
The Star Tribune pointed out that the company’s stock price may present a new incentive to potential executives. After plummeting in 2012, Best Buy’s stock price has more than doubled this year and was trading up 1.4 percent at $27.46 late Thursday morning.
Shortly after striking a deal to sell its 50 percent stake in Best Buy Europe and amid a turnaround plan involving a number of cost-cutting initiatives, Best Buy swung to a loss during its fiscal first quarter, which ended May 4.