In the aftermath of the sudden resignation of CEO Brian Dunn, Best Buy Co. founder Richard Schulze, 71, is taking a larger role in the company,
the
Wall Street Journal
reported.
According to
the
Minneapolis Star Tribune,
Best Buy’s board is investigating allegations that Dunn used company resources to carry on an affair with a company staffer.
The
Journal
report said that since Best Buy was founded 46 years ago by Schulze under the name Sound of Music, the company “has been run like a family business.” The article said that Schulze, who is chairman and owns nearly 18% of the shares outstanding, is further connected to the company “through a web of business deals and a foundation that also involve his brother and daughter.”
The
Journal
article said Schulze “handpicked the two CEOs who followed him, opting both times for company lifers.” According to the report, “The board has been making efforts in recent years to become more independent and Mr. Schulze’s grip had started to loosen a bit.” But in the wake of the scandal, Schulze is becoming more active.
Leadership consultant Jeffrey Cohn told the
Journal
that Schulze “can make the life of the headhunter a lot easier by giving up the chairmanship,” though he doubts that would happen because Schulze has “too much skin in the game.”
The publicly traded company lost $1.7 billion in the last quarter, the
Journal
report noted.
The
Journal
article said Best Buy has leased two stores from Schulze since 1990 and paid him $1 million under the leases in the fiscal year ended Feb. 26, 2011. The report said Best Buy paid $854,000 for the use of airplanes from a charter service Schulze controls.
Also, according to the
Journal
report, Best Buy bought $9.7 million in store equipment and furniture from Phoenix Fixtures Inc., which is owned by Schulze’s brother. The company also paid $298,599 to Schulze’s daughter, Susan Hoff, for her work as chair of the Best Buy Children’s Foundation. (Sources:
Wall Street Journal,
April 18, 2012;
Minneapolis Star Tribune,
April 12, 2012.)
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