In the last six months, Best Buy’s CEO has resigned under a dark cloud, its founder has stepped down and thousands of employees face “intensive induction training.” But while the retailer is making all sorts of public to-do about accountability and change, it’s reportedly handing out bonuses to senior employees that have nothing to do with performance.
This is why, according to Bloomberg, a consultant who was worked with Best Buy for seven years on matters of compensation, resigned earlier this month.
Among the execs awarded retention bonuses — in the form of lump-sum $500,000 payments — with no regard to performance were Best Buy’s Chief Financial Officer, the head of the retailer’s U.S. division, the company’s International President, and the head of its human resources department.
A former member of the compensation committee tells Bloomberg that, even in times of turmoil, it is “”sort of unusual” to offer retention bonuses that are not tied to any measure of performance: “You always try to tie it or at least couple it with some other offer that is performance related so it’s not just a matter of sticking around.”
Best Buy defends the bonuses:
We’re confident that the compensation paid by Best Buy is fair, reflects market realities and is based on responsible practices that reflect the transformation of the organization… As part of our long-term plan, and to ensure a strong and stable future for the company, Best Buy’s board of directors has taken action to retain key senior leaders during the current period of transition.