Best Buy loses two board directors

Mon Dec 31, 2012 9:32pm EST

A Best Buy logo is seen during Thanksgiving Day in San Francisco, California, November 22, 2012. REUTERS/Stephen Lam

A Best Buy logo is seen during Thanksgiving Day in San Francisco, California, November 22, 2012.

Credit: Reuters/Stephen Lam

(Reuters) - Best Buy Co Inc said on Monday 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 Inc and other websites.

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 on Monday.

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 director in 2008.

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 on Monday 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.

(Reporting by Greg Roumeliotis; Editing by Kim Coghill)

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Comments (4)
Iseethefuture wrote:
If Best Buy can’t get over it’s arrogant staff in their stores- I say good riddance. Low quality control on who they hire – not people oriented. Rude and obnoxious is the norm for a worker at Best Buy.

It is time Best Buy goes belly up. Amazon is the future.

Jan 01, 2013 9:47am EST  --  Report as abuse
lawgone wrote:
I agree with Iseethefuture, going to Best Buy is a horrible shopping experience and the prices are higher than most other retailers. I haven’t stepped into a Best Buy in close to 10 years. They are simply prolonging the inevitable, its long past time for them to packed it in, I’m amazed that they lasted this long.

Jan 01, 2013 11:07am EST  --  Report as abuse
ladlad wrote:
Best Buy employees are not rude or arrogant where I live. But I agree that they need to change. Maybe Amazon will buy Best Buy and use the stores as physcial stores and same day delivery starting points in various communities. That would be good for both companies.

Jan 01, 2013 2:37pm EST  --  Report as abuse
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