While many did not think he was worth the price Best Buy paid for him, new CEO Hubert Joly stood out at his first annual meeting with investors. According to the Star Tribune, Joly’s short, succinct, and direct answers were met with positive reactions from investors.
From the article:
His back-to-basics approach has ultimately won over shareholders, as they voted to approve his compensation in a nonbinding “Say on Pay.” The retailer said Thursday that a preliminary count of ballots showed that 83 percent of shareholders said “yes” on Joly’s compensation.
The approval comes despite the objection of Institutional Shareholders Services (ISS). The prominent firm, which advises shareholders on proxy matters, recommended a “no” vote, partly due to its argument that Joly’s $20 million in stock and cash wasn’t linked to any future performance goals. Best Buy officials, however, say they needed to pay Joly the package to compensate him for the money he lost when he left Carlson to join the retailer.
Joly’s appeal has been his Renew Blue strategy: Best Buy doesn’t necessarily need to re-invent the wheel so much as it needs the wheel to roll more smoothly. The retailer needs to devote more space in stores to higher-growth products and its website needs to convert more visitors to paying customers. The company’s distribution centers need to supply merchandise to both stores and online customers.
“It sounds like common sense, but is meaningful,” Joly said.
So far, so good: Sales have stabilized, expenses are down, and the stock price has more than doubled since last December.
“Joly deserves a lot of credit for the plan they have put into place,” said Brian Yarbrough, a retail analyst with Edward Jones Investment in St. Louis. “He has done a good job training the employees and trying to understand the customer better. He has been open to shareholders, doing a good job at communicating with them.”