Brian Dunn stepped down as Best Buy Co., Inc.’s (BBY) CEO less than three months ago, but we wouldn’t be surprised if his former colleagues are even fonder of him now than they were when he left. That’s because — thanks to his departure — they just got lucrative “Special Continuity Awards.”
According to an 8-K filed late yesterday afternoon, Best Buy’s Compensation and Human Resources Committee decided that:
“…given the ongoing search for a permanent Chief Executive Officer (CEO), the Continuity Award Agreements were necessary to enable a stable CEO transition and appropriate continuity of leadership.”
The lucky recipients are James L. Muehlbauer, Executive Vice President – Finance and CFO; Shari L. Ballard, Executive Vice President and President, International; Carol A. Surface, Executive Vice President and Chief Human Resources Officer; and Michael A. Vitelli, Executive Vice President and President, U.S.
In exchange for staying with the company until the new, permanent CEO is hired and has had a chance to get up to speed, each of the above-named executives will receive a lump sum cash payment of $500,000 and 102,669 shares of restricted stock that had an initial value of about $2 million. (The stock has fallen nearly a dollar per share since June 21, when the awards were made; thus, at today’s early trading price of $18.51 per share, each award is worth “only” $1.9 million.)
Of course, certain conditions must be met in order for an executive to get the full award. For example, the cash is subject to a clawback clause if the executive leaves within a year after the new CEO is appointed and has settled into the job. The restricted stock was declared 25% vested already when it was awarded to the recipients last week; it will vest another 25% on each anniversary of the grant date over the next three years.
Assuming they feel as grateful as most of us would, Dunn’s former colleagues have six months left to brainstorm ideas for his special holiday present. At a minimum, they could send him a really nice fruitcake (yes, such a thing does exist!), or perhaps some very fine chocolates are more to his liking. But with an extra $2.5 million or so on the horizon for each of them, they can afford to be generous.
What’s in the fine print of the filings by companies you hold? At footnotedPro, our subscription service exclusively for financial professionals, we identify early warning signs and hidden red flags well in advance of the market. For more information, or to inquire about a trial subscription, please email us.