Best Buy founder Richard Schulze is the newest casualty of a sex scandal at Best Buy that led to his resignation today after an internal investigation revealed that he knew about a close personal relationship former CEO Brian Dunn had with a 29-year-old female employee, which is a violation of company policy.
The relationship led Dunn, 51, first to resign from the position of CEO in April, and on Monday the New York Times reported that Best Buy founder Richard Schulze is stepping down as chairman of the company as a result of his having had knowledge of Dunn's transgressions but failing to report it.
In December, when the conduct of our then-CEO was brought to my attention, I confronted him with the allegations (which he denied), told him his conduct was totally unacceptable and contrary to Best Buy's policies and everything I, and the company, stand for. I understand and accept the findings of the Audit Committee, Schulze said in a statement.
Dunn had a long, successful career at the retail giant, working there from its launch in 1966, and the blow of his dismissal will be softened by the fact that he will still receive a $6.6 million severance package on his way out the door, according to the Times.
And Schulze, a U.S. Air Force veteran who lives in Edina, Minn., will be left with some dignity, as he will not be entirely removed from connection with the company, as he is being granted the honorary position of chairman emeritus and will finish his term as director on June 13, the Times reports.
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In 2011, Schulze was ranked 212th richest person in the United States by Forbes, with an estimated worth of $2 billion.
Best Buy launched its investigation into Dunn in March, and the outside law firm the company hired found that his personal relationship demonstrated a lack of sound judgement on his part, the Times said, though it did not find any improper use of company resources or aircraft in connection with the relationship.
The audit committee reported that Dunn violated Company policy by engaging in an extremely close personal relationship with a female employee that negatively impacted the work environment.
Schulze will be replaced as chairman by Hatim Tyabji, chairman of the board's audit committee, the Times reports.
Best Buy, which has been publicly embarassed by the scandal's fallout, said it plans to review its policies in the wake of the investigation's findings and recommend changes to procedures to help the company avoid such situations in the future.
Dunn was named CEO of Best Buy in 2009, after 28 years with the company. Best Buy shares fell 27 cents, or 1.4 percent, to $19.55 during Monday morning trading, after recovering slightly from a three-year low of $19.02 per share earlier that day.