When former Best Buy CEO Brian Dunn resigned after announcing a dramatic restructuring of the company’s retail operations, it looked like a reaction to the company’s recent financial woes.
The timing of Dunn’s resignation provided him with ample cover — his announcement coming just days after Best Buy posted disappointing earnings, and revealed plans to shutter 50 of their big-box locations.
Still, that didn’t stop the press from digging around, and it wasn’t long before Best Buy revealed that Dunn left just prior to the completion of an independent investigation of his “extremely close personal relationship” with a female employee. The results of that investigation were revealed today, and they have prompted company founder Richard Schulze to give up his role as company chairman.
The company’s internal investigation found that Schulze had acted inappropriately for not bringing the allegations of Dunn’s relationship to the board’s Audit Committee. For that, Schulze will be relinquishing his role as chairman on June 21, which will soon be filled by longstanding director (and Audit Committee head) Hatim Tyabji.
And what of Mr. Dunn?
Shortly after the news broke, the company was concerned that Dunn had misused Best Buy’s resources during the course of his extra-marital fling. WilmerHale, the law firm that conducted the investigation by poring though emails between Dunn and the female employee, expense reports, personnel records, and company phone records, could find no evidence that misuse of resources (including company aircraft) had taken place. Despite that, Dunn still violated company policy by engaging in said relationship, demonstrating “extremely poor judgment” in the process.
He still managed to walk away with quite a bit though — take a peek at his severance package:
Previously earned FY2012 bonus: $1,140,000
Previously awarded and reported restricted stock grants of 131,876 shares, valued at close of business on Friday, May 11, 2012, ($19.28 per share), totaling $2,542,569
Severance payment of $2,850,000
Compensation for unused vacation: $106,742
Using the May 11, 2012, stock price for calculation, the estimated total value of the severance package is $6,639,311.
It’s not quite as much as the $10 million he earned in 2010, but methinks he won’t be hurting too much for the time being.