Best Buy, US-based electronics retailer, saw its stock price fall to a nine-year low on Tuesday, leading the company to suspend profit forecasts and share buybacks for the rest of the year, in order to give time to its newly appointed chief executive Hubert Joly to plan the course of a revival.
The world’s largest consumer electronics retailer’s shares closed down 1.4% at $17.91 (£11.35) on Tuesday after sinking to a nine-year low of $16.25 (£10.29) earlier in the session, extending losses made on Monday following the announcement of new CEO Joly. Prior to joining Best Buy, Joly was heading hospitality and travel company Carlson but does not have retail experience.
Yesterday, Best Buy said Joly will receive a base salary of $1.175 million (£0.7447 million). He will also be eligible to receive a yearly cash bonus with a target rate of twice his base salary and significant stock awards. Joly will also receive cash, stock and options worth up to $20 million (£12.67 million) over a three year period as compensation for benefits he left behind at Carlson.
Best Buy posted weaker-than-expected quarterly earnings, owing to a weak demand in key markets like China. The company plans to improve its online business and wants to reduce retail square footage further than the March plan to close 50 of its 1,100 large US stores.
The sudden exit of CEO Brian Dunn raised ethical queries and added to BestBuy’s woes. The company is also trying to avoid takeover interest from founder and largest shareholder Richard Schulze, who was terminated as chairman after an internal inquiry found he did not inform the board of allegations that Dunn was having an inappropriate relationship with a female employee.