A family affair…
Like lots of other companies of late, Best Buy’s (BBY) recent proxy and K provided new disclosures on family members collecting money from the company. By far the biggest deal to be disclosed was the company’s agreement with Phoenix Fixtures, a Roberts, Wis. based company that is owned by the brother of Best Buy’s Chairman, Richard Schulze. In fiscal 2005, Phoenix, which makes displays used in Best Buy’s stores, collected $20 million from the company, or two-thirds more than the $12 million it made in fiscal 2003, according to the K. In the proxy, Best Buy notes that the decision to use Phoenix was based on “both qualitative and quantitative factors” and was approved by the Board. Of course it was. But how closely did they look at other companies that could also provide the fixtures?
Also making a first-time appearance in the proxy, was Schulze’s daughter, Susan Hoff and her husband, Duane, who the proxy notes resigned in December from his $160K a year job as vice president for business development. Susan Hoff, who serves as chief communications officer, made $530K last year, which based on the summary compensation chart, should have put her at No. 4 on the chart. In fairness, Best Buy did disclose Susan Hoff’s employment in the 2003 and 2004 Ks, but never provided a salary figure. And, given the fact that Hoff began working for Best Buy more than 20 years ago, the disclosure seems more than a bit late.