Best Buy loses two board directors
Best Buy Co Inc said that two of its board directors had resigned, including one of its former chief executives, almost seven months after its founder, who is now mounting a bid for the struggling retailer, left the board. The departures will leave Best Buy with four vacancies on its 11-member board.
The company's fortunes have faltered as consumers increasingly use its big box stores as showrooms for products they end up buying online at Amazon.com Inc and othe
Best Buy said that G. Mike Mikan, who served as interim CEO between April and September 2012 after former chief Brian Dunn was found to have had an improper relationship with a female employee, had stepped down from the board effective immediately.
Mikan left to become president of Edward Lampert's hedge fund ESL Investments Inc. Billionaire Lampert is the chairman of another retailer, Sears Holdings Corp, which he controls and is embarked on a turnaround campaign. "Mike's background fits with our strategy and he will be a great asset to me and to ESL's portfolio companies," Lampert said in a statement. Mikan's main corporate stint was at UnitedHealth Group Inc, where he spent 14 years and served as executive vice president and chief financial officer, as well as CEO of its Optum subsidiary. He became a Best Buy. Mikan was at the helm of Best Buy when Richard Schulze, its former chairman and founder, lost his chairmanship after he was held responsible for failing to notify the board about allegations against his protégé Dunn. Schulze resigned as board member in June.
In August, Schulze informed the board that he was interested in teaming up with private equity partners to buy the company but he has yet to table a solid offer and now faces a February 28 bid deadline. Schulze remains Best Buy's largest shareholder with about one-fifth of the company's outstanding shares but the company is now led by turnaround expert Hubert Joly, who was tapped as CEO to come up with a new restructuring plan. The second departure announced was expected. Matthew Paull, who had served on the board since 2008, will retire from the board in April 2013. Paull stepped down as CFO of McDonald's Corp in 2008. Best Buy's rules dictate that a director must retire five years after he stops pursuing the primary career he or she was engaged in when appointed to the board. Neither Paull nor Mikan indicated that they were resigning due to any disagreements with Best Buy's management, the company said. The fourth vacancy on Best Buy's board dates back to June, when Rogelio Rebolledo left to also comply with the company's retirement policy.