Best Buy Chairman To Resign After Probe Into Former CEO

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on May 14 2012 1:10 PM
  • File photo of Best Buy logo seen at a store in Toronto.
    Sales at stores open at least 14 months fell 1.2 percent in December, while total revenue in the month was $8.4 billion, about the same as last year. REUTERS
  • Best Buy
    Best Buy Co. (NYSE: BBY), the troubled electronics retailer, said Monday founder Richard Schulze was resigning as chairman and would be replaced by director Hatim Tyabji, after Schulze didn't tell the board that former CEO Brian Dunn was having an inappropriate relationship with a female employee. REUTERS
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Best Buy Co. (NYSE: BBY), the troubled electronics retailer, said Monday founder Richard Schulze was resigning as chairman and would be replaced by director Hatim Tyabji, after Schulze didn't tell the board that former CEO Brian Dunn was having an inappropriate relationship with a female employee.

Schulze will remain a director of the Richfield, Minn., company's board through June 2013 and remain chairman emeritus, an honorary position. Tyabji, chairman and CEO of software company Bytemobile, will assume the position on June 21.

Hatim's history of leadership combines technology, retail, financial and mobile experience at the most senior levels, said lead independent director Matthew Paull, in a statement. Tyabji is chairman of Best Buy's audit committee.

The company said Dunn, who resigned in April, had an extremely close personal relation with a female employee that negatively impacted the work environment. Dunn gave the employee, who wasn't identified, tickets to sporting events and sent her hundreds of phone calls and text messages that appeared unrelated to work.

While the committee found that the relationship demonstrated extremely poor judgment and a lack of professionalism, it found no misuse of company resources or aircraft. Dunn will receive a severance package of around $6.6 million, including bonus and stock.

Director G. Mike Mikan is serving as Best Buy's interim CEO while the board seeks a permanent candidate, which may take up to nine months.

Best Buy has struggled to compete with competitors including Amazon.com Inc. (Nasdaq: AMZN), Target Corp. (NYSE:TGT) and Wal-Mart Stores Inc. (NYSE:WMT). In March, Best Buy said it was closing 50 stores.

Shares of Best Buy were up 35 cents, or 1.82 percent, to $19.63 in afternoon trading.

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