Monday, May 14, 2012

Best Buy (BBY) Chairman Richard Schulze Stepping Down

An outside law firm hired by Best Buy after its audit committee found the CEO at the time, Brian Dunn, had violated company policy by entering into a relationship with a female employee, has now resulted in founder and Chairman of the company, Richard Schulze, stepping down from his Chairman position.

The reason for the pressure on Schulze to step down comes from the fact he knew about the relationship and failed to report and deal with it per company policy by reporting it to the audit committee.

While Dunn was found to have an inappropriate relationship with the female employee based upon company policy, the law firm did say there wasn't any misuse of company funds or resources in connection to the relationship, as well as no use of aircraft for the purpose of facilitating the relationship.

Even so, Dunn still received a huge $6.6 million severance package.

Schulze said in a statement, "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 will remain on through June 13, with a new title of chairman emeritus. That is simply an honorary position given him until he finishes his term.

Hatim Tyabji will replace Schulze. Tyabji is the chairman of Best Buy's audit committee.

After dropping to 3-year lows, Best Buy has rebounded, trading at $19.61, up $0.33, or 1.71 percent, as of 12:00 PM EDT.

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