Best Buy (NYSE:BBY) announced a new CEO with a supposedly mid range pay package. Mid range that is for a company of Best Buy’s size. Brand new CEO Hubert Joly scored a pay package valued around $32 million over three years to entice him to the problematic consumer-electronics chain.
OK so Best buy is not hot and the opportunity to run it may not be the best piece of sugar out there. However, it does put to rest the lack of CEO quandary. More telling is Hubert Joly has a history of working with problematic companies. He has more recently been running Carlson a global hospitality company and or Carlson Travel. This puts him squarely into the Minneapolis Business milieu, which quite frankly is not that big.
So here is the inferred strategy from the board of directors by the numbers:
- The corporation has a problem
- We blow off the chief problem maker
- We hire a new guy with no retail experience
- But the new no retail guy is good at stabilizing companies
- Why do this?
- Unstable companies do not attract super-star candidates
- Unstable companies do not attract premium paying take over offers
- Board is still uncertain about what course to take in the future
- Board is still uncertain how the market cookie will crumble
- But in the meantime stability guy fixes what can be fixed.
- Also hire lots of consultants and investment bankers to get advice and unlock value.
- This is not the time to hire the retail equivalent of Marisa Meyer
- The retail equivalent of Marissa Meyer is probably Jeff Bezos.
- This means a take-over by Amazon (Nasdaq:AMZN) so we need to clean up the joint.
- In the mean time we need to sell some big-ass TV’s.
George Gutowski writes from a caveat emptor perspective.