At our 2021 Regular Meeting of Shareholders,
(the "Meeting") to be held on Tuesday, June 14, 2016, at 9:00 a.m., Central Time, at the Best Buy Corporate Campus — Convention Center, 7601 Penn Avenue South, Richfield, Minnesota, 55423 or at any postponement or adjournment of the Meeting. The proxy materials, including the proxy statement, our Annual Report and form of proxy or the Notice of Internet Availability, were mailed to you beginning on or about May 3, 2016.
Background
What is the purpose of the Meeting?
At the Meeting,we are asking shareholders will vote on the items of business outlined in the Notice of 2016 Regular Meeting of Shareholders ("Meeting Notice") included as the cover page to this proxy statement. In addition, management will report on our business and respond to questions from shareholders.
Why did I receive this proxy statement and a proxy card or the Notice of Internet Availability?
You received this proxy statement and a proxy card or the Notice of Internet Availability because you owned shares of Best Buy common stock as of April 18, 2016, the record date for the Meeting, and are entitled to vote on the items of business at the Meeting.four key items. This proxy statement describes the items of business that will be voted on at the Meeting and provides information on these items so that you can make an informed decision.
How can I attend the Meeting?
You will need a form of personal identification (such as a driver's license) along with either your Notice of Internet Availability, proxy card or proof of stock ownership to enter the Meeting. If your shares are held beneficially in the name of a bank, broker or other holder of record and you wish to be admitted to the Meeting, you must present proof of your ownership of Best Buy stock, such as a bank or brokerage account statement. Please note that no cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the Meeting.
Who may vote?
In order to vote at the Meeting, you must have been a shareholder of record of Best Buy as of April 18, 2016, which is the record date for the Meeting. If your shares are held in "street name" (that is, through a bank, broker or other nominee), you will receive instructions from the bank, broker or nominee that you must follow in order for your shares to be voted as you choose.
When is the record date?
The Board has established April 18, 2016, as the record date for the Meeting.
How many shares of Best Buy common stock are outstanding?
As of the record date, there were 324,078,217 shares of Best Buy common stock outstanding. There are no other classes of capital stock outstanding.
Voting Procedures
On what items of business am I voting?
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1. | The election of the ten directors listed herein for a term of one year expiring in 2017; |
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2. | The ratification of the appointment of Deloitte & Touche, LLP as our independent registered public accounting firm for the fiscal year ending January 28, 2017; |
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3. | The non-binding advisory vote to approve our named executive officer compensation; and |
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4. | Such other business as may properly come before the Meeting. |
How does the Board recommend that I vote?
Our Board recommends that you vote your shares:
“FOR” the election of directors as set forth in this proxy statement;
“FOR” the ratification of the appointment of Deloitte & Touche, LLP as our independent registered public accounting firm for the fiscal year ending January 28, 2017; and
“FOR” the non-binding advisory vote to approve our named executive officer compensation.
If you are a record holder and you sign and submit your proxy card without indicating your voting instructions, your shares will be voted as indicated above.
How do I vote?
If you are a shareholder of record (that is, if your shares are owned in your name and not in "street name"), you may vote:
: Via the internet at www.proxyvote.com;
) By telephone (within the U.S. or Canada) toll-free at 1-800-690-6903;
. By mail, by signing and returning the enclosed proxy card if you have received paper materials; or
? By attending the Meeting and voting in person.
If your shares are held in a brokerage account by a broker, bank or other nominee, you should follow the voting instructions provided by your broker, bank or other nominee.
If you wish to vote by telephone or via the internet, you must do so before 11:59 p.m., Eastern Time, on Monday, June 13, 2016. After that time, telephone and internet voting will not be permitted, and any shareholder of record wishing to vote thereafter must submit a signed proxy card or vote in person during the Meeting. Shareholders of record will be on a list held by the inspector of elections. "Street name" shareholders, also known as beneficial owners, must obtain a proxy from the institution that holds their shares, whether it is their brokerage firm, a bank or other nominee, and present it to the inspector of elections with their ballot in order to vote at the Meeting. Voting in person by a shareholder at the Meeting will replace any previous votes submitted by proxy.
In accordance with the SEC rules, we are making available to all shareholders who have not affirmatively opted to receive paper materials, all of their proxy materials via the internet. However, you may opt to receive paper copies of proxy materials, at no cost to you, by following the instructions contained in the Notice of Internet Availability that we have mailed to most shareholders. We encourage you to take advantage of the option to vote your shares electronically through the internet or by telephone. Doing so will result in cost savings for the Company.
How are my voting instructions carried out?
When you vote via proxy, you appoint the Chairman of the Board, Hubert Joly, and the Secretary of the Company, Keith J. Nelsen (collectively, the "Proxy Agents"), as your representatives to vote at the Meeting. The Proxy Agents will vote your shares at the Meeting, or at any postponement or adjournment of the Meeting, as you have instructed them on the proxy card. If you return a properly executed proxy card without specific voting instructions, the Proxy Agents will vote your shares in accordance with the Board's recommendations as disclosed in this proxy statement. If you submit a proxy, your shares will be voted regardless of whether you attend the Meeting. Even if you plan to attend the Meeting, it is advisable to vote your shares via proxy in advance of the Meeting in case your plans change.
If an item properly comes up for vote at the Meeting, or at any postponement or adjournment of the Meeting, that is not described in the Meeting Notice, including adjournment of the Meeting and any other matters incident to the conduct of the Meeting, the Proxy Agents will vote the shares subject to your proxy in their discretion. Discretionary authority for them to do so is contained in the proxy.
How many votes do I have?
You have one vote for each share you own, and you can vote those shares for each item of business to be addressed at the Meeting.
How many shares must be present to hold a valid Meeting?
For us to hold a valid Meeting, we must have a quorum. In order to have a quorum, a majority of the outstanding shares of our common stock that are entitled to vote need to be present or represented by proxy at the Meeting. Your shares will be counted as present at the Meeting if you:
vote via the internet or by telephone;
properly submit a proxy card (even if you do not provide voting instructions); or
attend the Meeting in person.
Broker non-votes, as defined below, will be included in determining the presence of a quorum at the Meeting so long as there is at least one routine matter which the broker, bank or other nominee can vote on, as is the case with the Meeting. In addition, abstentions on any matter are included in determining the presence of a quorum.
How many votes are required to approve an item of business and what are the effects of abstentions and broker non-votes on the voting results?
Pursuant to our Amended and Restated Articles of Incorporation ("Articles") and our Amended and Restated By-laws ("By-laws"), each item of business to be voted on by the shareholders at the Meeting, with the exception of Item 1, requires the affirmative vote of the holders of a majority of the voting power of the shares of Best Buy common stock present at a meeting and entitled to vote. Item 1, the election of directors, requires the affirmative vote of a majority of votes cast with respect to the director.
Under the rules of the New York Stock Exchange (“NYSE”), if you are a beneficial owner of shares and you do not provide voting instructions to your broker, bank or nominee, that firm has discretion to vote your shares for certain routine matters. Item 2, the ratification of the appointment of Deloitte & Touche, LLP as our independent registered public accounting firm, is considered a routine matter under NYSE rules. However, your broker, bank or nominee does not have discretion to vote your shares for non-routine matters. Items 1 and 3, the election of directors and the advisory vote related to executive compensation, respectively, are not considered routine matters under NYSE rules.
When a broker, bank or nominee votes a beneficial owner's shares on certain but not all of the proposals, because it is unable to vote due to the beneficial owner's failure to provide voting instructions on a matter as to which the broker, bank or nominee has no discretion to vote otherwise, the missing votes are referred to as “broker non-votes.”
Abstentions will have the same effect as votes against Items 2 and 3 described in this proxy statement, but will have no effect on Item 1. Broker non-votes will have no effect on Items 1 and 3.
What if I change my mind after I vote via proxy?
If you are a shareholder of record, you may revoke your proxy at any time before your shares are voted by:
Submitting a later-dated proxy prior to the Meeting (by mail, internet or telephone);
Voting in person at the Meeting (attendance will not, by itself, revoke a proxy); or
Providing written notice of revocation to Best Buy's Secretary at our principal office at any time before your shares are voted.
If your shares are held in a brokerage account by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or other nominee.
Who will count the vote?
Representatives of Broadridge will tabulate the vote and act as the inspector of elections.
Where can I find the voting results of the Meeting?
We plan to publish the final voting results in a Current Report on Form 8-K ("Form 8-K") filed within four business days of the Meeting. If final voting results are not available within the four business day timeframe, we plan to file a Form 8-K disclosing preliminary voting results within the required four business days, to be followed as soon as practicable by an amendment to the Form 8-K containing final voting results.
Proxy Solicitation
How are proxies solicited?
We expect to solicit proxies primarily by internet and mail, but our directors, officers, other employees and agents may also solicit proxies in person, by telephone, through electronic communication and by facsimile transmission. We will request that brokerage firms, banks, other custodians, nominees, fiduciaries and other representatives of shareholders forward the Notice of Internet Availability and, as applicable, the proxy materials and Annual Reports themselves, to the beneficial owners of our common stock. Our directors and employees do not receive additional compensation for soliciting shareholder proxies.
Who will pay for the cost of soliciting proxies?
We pay all of the costs of preparing, printing and distributing our proxy materials. We will reimburse brokerage firms, banks and other representatives of shareholders for reasonable expenses incurred as defined in the NYSE schedule of charges in connection with proxy solicitations.
How can multiple shareholders sharing the same address request to receive only one set of proxy materials and other investor communications?
You may elect to receive future proxy materials, as well as other investor communications, in a single package per address. This practice, known as "householding," is designed to reduce our paper use and printing and postage costs. To make the election, please indicate on your proxy card under "Householding Election" your consent to receive such communications in a single package per address. Once we receive your consent, we will send a single package per household until you revoke your consent or request separate copies of our proxy materials by notifying our Investor Relations Department in writing at 7601 Penn Avenue South, Richfield, MN, 55423, or by telephone at 612-291-6147. We will start sending you individual copies of proxy materials and other investor communications following receipt of your revocation.
Can I receive the proxy materials electronically?
Yes. All shareholders may access our proxy materials electronically via the internet. We encourage our shareholders to access our proxy materials via the internet because it reduces the expenses for, and the environmental impact of, our shareholder meetings. You may opt to receive paper copies of proxy materials, including our Annual Report, proxy statement and proxy card at no cost to you, by following the instructions on your Notice of Internet Availability.
An electronic version of this proxy statement is posted on our website at www.investors.bestbuy.com.
Additional Information
Where can I find additional information about Best Buy?
Our reports on Forms 10-K, 10-Q and 8-K, and other publicly available information should be consulted for other important information about Best Buy. You can find these reports and additional information about us on our website at www.investors.bestbuy.com.
PROXY SUMMARY
This summarysection highlights information contained elsewhere in other parts of this proxy statement. We encourage you to review the entire proxy statement for more detail on these items, as well as our Annual Report and our Chairman and CEO'sCEO’s Letter to Shareholders posted on our website at www.investors.bestbuy.com for more information regarding our Company, business and performance over the past year.www.investors.bestbuy.com.
Items of Business Update
In this past fiscal year, we made progress against the two problems identifiedfor Vote at the outset of this journey: declining comparable sales and declining margins. In fact, fiscal 2016 marked the second year in a row that we increasedour domestic revenue and expanded our operating margin.
This progress was made possible through our unrelenting focus on the Five Pillars of our Renew Blue transformation.
We begin where all successful retailers start, with the customer experience. Last year we saw continued improvement in customer satisfaction, having increased our Net Promoter Score by more than 300 basis points.
In the spirit of striving to serve customers wherever and however they prefer, we grew online domestic revenue 13% to more than $4 billion, or 11% of total domestic revenue. This growth was fueled, in part, by a meaningfully improved website and the launch of the enhanced Best Buy app that has consistently earned higher customer reviews than most, if not all, of our competitors.
We have also meaningfully enhanced the customer experience in our stores and around the services we provide to our customers, from consultation to installation, setup, support and repair.
All of this progress has allowed us to gain market share in nearly all of our traditional consumer electronics ("CE") categories, as well as appliances.
None of this would have been possible without the talent and engagement of our leaders and employees. We are proud of what they do everyday and thank each individual member of our team for what they have done to bring us here.
Engagement scores have drastically improved since the outset of our transformation. This year, we also saw a decrease in employee turnover in our stores, allowing us to better serve our customers. We have invested in the training and daily coaching of our front-line employees to be able to deliver enhanced levels of proficiency. We have also enhanced our capabilities in several areas that are critical to our future, including digital and mobile.
We have continued to strengthen our collaboration with key vendor partners. For instance, we now have 630 Samsung and 380 Sony home theater stores-within-a-store; 225 Samsung Open House appliance experiences; 814 Windows stores; and 249 AT&T and Verizon mobile shops within our big box stores. This collaboration with key vendors is one of the ways we showcase for our customers the latest and greatest technology in a tangible fashion. A great example of this is the work we have done with key vendors to introduce 4K TV technology to a broad consumer base, increasing adoption at a strong rate.
From an economic standpoint, in fiscal 2016 we were able to deliver $150 million against our $400 million cost reduction and gross profit optimization goal. This was in addition to the $1 billion in costs we removed from our business in the past few years.
We were also able to successfully consolidate our two Canadian brands and embark on a significant transformation in Canada. Customer retention in Canada is better than expected, and it is clear that we made the correct decision in moving to a single brand, Best Buy.
In aggregate, our decision to focus on North America and the improvements we've made in our business have resulted in a significant increase in our non-GAAP return on invested capital ("ROIC") from 9.2% in fiscal 2012 to 13.6% in fiscal 2016.*
Finally, throughout fiscal 2016 we continued to seek to positively impact the world. Our recycling efforts have collected more than 1 billion pounds of e-waste, and our pledge to reduce our carbon footprint by 20% was met in fiscal 2016. We subsequently increased our target to a 40% reduction by calendar year 2020 from a 2009 baseline. Our Best Buy Foundation continued its work to provide underserved teenagers across the U.S. with access to technology. We increased the number of our Teen Tech Centers and Geek Squad Academies, all in an effort to expose underprivileged teens to the career opportunities that technology offers.
Returning Capital to Shareholders
In fiscal 2016, we returned $1.5 billion to our shareholders. This number included $1 billion in share repurchases, originally planned to be completed over three years. We also increased our dividend and gave shareholders a one-time dividend payment associated with a favorable legal settlement.
As we laid out in our fourth quarter fiscal 2016 earnings call, our long-term capital allocation strategy is first to fund operations and investments in growth, including potential acquisitions, and then to return excess free cash flow over time to shareholders through dividends and share repurchases. Our intent is to be a premium dividend payer and to regularly repurchase shares every year that, at a minimum, offset dilution from equity-based awards. We intend to do this all while maintaining investment-grade credit metrics.
In line with this strategy, our fiscal 2017 return-of-capital plan includes: 1) a 22% increase in the regular quarterly dividend to $0.28 per share; 2) a two-year, $1 billion share repurchase program; and 3) a special dividend of $0.45 per share.
A Look Ahead at Our Growth Strategy and Fiscal 2017 Priorities
As pleased as we are with our performance, we are even more excited about what lies ahead. We have entered the next phase of our transformation, and our purpose is clear: help customers learn about and enjoy the latest technology as they pursue their passions or take care of what is important to them in their life, whether it is the desire to be entertained, communicate easily, work efficiently, prepare food, or clean, protect, monitor, or automate their home.
With this purpose in mind, we are on a mission to constantly innovate to improve the experience of our customers and determined to find ways to accelerate the growth of our business.
In this context, we are pursuing the following priorities in fiscal 2017:
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1) | Build on our strong industry position and multi-channel capabilities to move the existing business forward; |
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2) | Create greater efficiency and reduce waste throughout the business; and |
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3) | Advance key growth initiatives. |
In pursuing our first priority - continuing to move the existing business forward - we are implementing a number of initiatives across merchandising, marketing, digital, stores, services and supply chain.
For example, in our appliances business, we look to extend our 21-quarter growth streak in this category. To that end, we plan to build 27 more Pacific Kitchen & Home stores-within-a-store, bringing our total to 203 at year-end. We also expect to see growth from the work we have done to improve our delivery and installation services, both of which are key to the increases we have seen in customer satisfaction.
One of the emerging categories in which we see an opportunity to create and foster a wave of innovation and consumer enthusiasm is the “Connected Home.” In this category, we are increasing our assortment in several areas, including home security, lighting and video monitoring, and using our leading position in routers and networking equipment, which form the backbone of the Connected Home, as a way of gaining customer interest and trust.
Regarding our online business, we are prioritizing the customer shopping experience on smartphone and tablet devices, two consumer shopping channels where we are seeing material growth. Our Seattle Technology Development Center, which opened last year, has focused on this part of our customer experience. A recent, well-received example of their work is “BlueAssist,” an in-app feature allowing customers to simply shake their device to get live help with products and orders through chat, call and e-mail.
Finally, we are continuing to invest in the talent, proficiency and performance of our front-line employees.
Our second priority for fiscal 2017 is to reduce cost and create efficiencies throughout the business. Reducing costs is essential for us to be able to fund our investments, build resilience to product cycles and, ultimately, increase our profitability over time.
One example of this cost reduction and efficiency work is our project to reduce the number of open-box appliances we take back into our stores. This effort has the potential to improve the customer experience by changing the way we sell so that fewer customers are compelled to return their appliance purchases. It also can create material savings through fewer price markdowns, reduced transportation costs and the better use of labor in our stores and distribution centers.
Broadly said, we aspire to deliver world-class operational performance, defined in terms of quality, service and cost. This focus has to be — and is becoming — a way of life, especially given our margin structure and product cycles.
These savings will allow us to invest in our future. Such investments include additional costs to ensure we have the most expert sales and services associates; a continued effort to make certain our services pricing remains competitive; and initiatives in the key growth areas. We are determined to invest to grow and equally determined to fund our investments by finding and exploiting areas of cost reduction and efficiency.
Our third priority is to advance key growth initiatives that will more deeply transform Best Buy, creating differentiation and growth. We believe we operate in an opportunity-rich environment. Specifically, the advent of the “Internet of Things” is creating a new technology wave that makes Best Buy’s operating model increasingly relevant. We know from our customer research and day-to-day customer interactions that consumers are generally:
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1) | Fairly skeptical that the latest products will actually do what is promised; |
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2) | Finding it difficult to pinpoint solutions available to best meet their needs; |
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3) | Frequently unaware of, or frustrated by, how to get the most out of their technology; and |
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4) | Struggling to make their technology work and find effective help when they need it. |
These unmet needs continue to create opportunities for us. We are committed to finding ways to help customers in these areas and to make shopping for and using technology a much better experience.
We will explore a number of initiatives in fiscal 2017, including developing more consultative selling approaches and providing a richer set of services to our customers. We will also pursue growth opportunities around key, growing product categories.
A critical component of our growth efforts is our services capabilities, including the Geek Squad. While it may not yet be visible in our quarterly financial results, we are making progress in this area. To do so, we had to spend time over the last two years fixing many aspects of our traditional warranty and repair businesses, including our pricing. We are seeing the results of our efforts through substantially higher Net Promoter Scores, an increased number of total customer interactions and improved attach rates.
Board & Corporate Governance Highlights
Over the past year, our Board of Directors has continued to evolve to meet the needs of the Company and the dynamic and competitive industry in which it operates. Our approach to corporate governance is to develop and implement practices that: 1) support the success of the Company’s strategy and business objectives, 2) are rooted in a robust ongoing dialogue with our shareholders, and 3) are inspired by best practices. Consistent with these objectives, we note the following highlights from the past year:
We continued to strengthen our Board composition in line with the needs of our business. In September 2015, we appointed Karen A. McLoughlin, chief financial officer of Cogizant Technology Solutions Corp., with a strong background in finance and information technology ("I.T.") services, to our Board. We also appointed Claudia F. Munce to serve as a director in March 2016. Ms. Munce spent over 30 years at IBM in their venture capital group and recently joined New Enterprise Associates as a venture advisor. The addition of Ms. McLoughlin and Ms. Munce not only
brings additional diversity to the Board, but adds new skills in the areas of technology, venture capital and I.T. services. These additions complement the prior additions of David Kenny, Russ Fradin, Tommy Millner and Patrick Doyle, who brought chief executive officer experiences in retail, consumer services, multichannel and enterprise transformation.
Our Board continued to play a critical role in our strategic planning process. The Board placed a priority on guiding the development of the Company’s strategic direction as it enters the next phase of our transformation. In fiscal 2016, this review process included a budget and capital plan review at the beginning of the fiscal year and an extended strategic offsite mid-year to review and discuss management’s long-term plan for growing the Company and creating shareholder value. The Board’s strong mix of skills, experiences and perspectives relevant to our business has ensured a rigorous and active dialogue between the Board and management regarding the Company’s strategic plan and growth agenda.
We successfully transitioned our Board leadership structure in order to support the strategic needs of our transformation. As announced last year, after 17 highly distinguished years on our Board (three of which he served as Chairman), Hatim Tyabji retired from our Board following the 2015 Regular Meeting of Shareholders (the "2015 Meeting"). Our CEO, Hubert Joly, assumed the role of Chairman, and Mr. Fradin (who joined our Board in 2013) began serving as our Lead Independent Director. To ensure the effectiveness of this structure, we employ corporate governance best practices, including Board meeting agendas proposed by the Chairman and reviewed by the Lead Independent Director, and executive sessions of the independent directors led by the Lead Independent Director at each regular Board meeting. We believe this leadership structure is ideally suited to this stage of our growth transformation.
In addition to these developments, we continue to employ a strong framework of corporate governance practices. More information on our Corporate Governance policies and practices can be found in the Corporate Governance section of this proxy statement.
In March 2016, Brad Anderson informed the Board that he would be retiring from the Board and would not seek re-election at the Meeting. Mr. Anderson was a long-time executive and Board member who started working at Best Buy in 1973 when we had just a handful of stores. He served alongside our Founder and Chairman Emeritus, Richard M. Schulze, and ultimately became his successor as CEO. During his service, he has made countless contributions that have helped shape us into the leading consumer electronics retailerThis year, we are today.
Fiscal 2016 Shareholder Engagement
Our robust shareholder engagement program continued to be a priority in fiscal 2016. We reached out to all of our top 20 shareholders, representing approximately 70% ofrequesting your support for the outstanding shares, as well as several other of our top 50 shareholders. We met personally with several of our top shareholders and generally received positive feedback about our performance, corporate governance and compensation practices. This support was evident at our 2015 Meeting, when allfollowing Items of Business received over 95% support from shareholders.Business:
Our typical engagement follows a seasonal cycle, as outlined below. Additional information can be found in the Corporate Governance — Shareholder Engagement section of this proxy statement.
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| Spring | è | Summer |
| Follow-up engagement with proxy advisory firms and our largest shareholders to address important issues within our proxy statement in advance of the annual meeting. | Review of feedback received from shareholders at our annual meeting and current trends in governance. |
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| Winter | | Fall |
| Review shareholder feedback from fall engagement with the Board and integration of feedback in governance practices and proxy disclosure. | | | | Primary engagement season with focus on our top 20 shareholders and proxy advisory firms through both in-person and telephonic conversations. Company participants include representatives from Legal, Investor Relations and Human Resources - Rewards. |
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Overview of Director Nominees
The following individuals are standing for election to our Board. All of our director nominees have relevant skills, proven leadership, sound judgment and integrity. They also bring a wide range of backgrounds, experience and expertise necessary to our transformation. Additional information about our nominees can be found in Item of Business No. 1 — Election of Directors.
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Name | Age | Director Since | Position/Company | Independence | Current Committees | Other For-Profit Directorships (*Public Company) |
Lisa M. Caputo | 52 | 2009 | Executive Vice President, Marketing & Communications The Travelers Companies, Inc. | ü | Nominating, Corporate Governance & Public Policy Compensation & Human Resources | — |
J. Patrick Doyle | 52 | 2014 | President & CEO Domino’s Pizza, Inc. | ü | Audit Finance & Investment Policy | Domino’s Pizza, Inc.* |
Russell P. Fradin | 60 | 2013 | Operating Partner Clayton, Dubilier & Rice | ü | Compensation & Human Resources (Chair) | — |
Kathy J. Higgins Victor | 59 | 1999 | President & Founder Centera Corporation | ü | Compensation & Human Resources Nominating, Corporate Governance & Public Policy (Chair) | — |
Hubert Joly | 56 | 2012 | Chairman & CEO Best Buy Co., Inc. | — | None | Ralph Lauren Corporation* |
David W. Kenny | 54 | 2013 | General Manager IBM Watson, IBM | ü | Audit (Chair) Compensation & Human Resources | SessionM |
Karen A. McLoughlin | 51 | 2015 | Chief Financial Officer Cognizant Technology Solutions Corp. | ü | Audit Finance & Investment Policy | — |
Thomas L. Millner | 62 | 2014 | President & CEO Cabela’s Inc. | ü | Audit Nominating, Corporate Governance & Public Policy | Cabela’s Inc.* Total Wine & More |
Claudia F. Munce | 56 | 2016 | Venture Advisor New Enterprise Associates | ü | Audit Finance & Investment Policy | Bank of the West |
Gérard R. Vittecoq | 67 | 2008 | Group President & Executive Office Member (Retired) Caterpillar, Inc. | ü | Audit Finance & Investment Policy (Chair) | Ariel Compressors Vanguard Logistics Services Mantrac Group |
As a whole, these director nominees represent the following composition characteristics and key qualifications, among others:
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Independence | | Average Tenure | | Average Age | | Gender Diversity |
90% | | 4.7 years | | 57 years | | 40% |
Executive Compensation Highlights
Fiscal 2016 was the third full year of our Renew Blue transformation strategy and our emphasis on stable compensation practices with a strong focus on performance outcomes.
Key Executive Compensation Program Elements
The compensation of our Named Executive Officers ("NEOs") in fiscal 2016 included the following ongoing elements (for additional details, see the Executive and Director Compensation — Compensation Discussion and Analysis and the Compensation of Executive Officers — Summary Compensation Table sections of this proxy statement):
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| Base Salary | Bonus | Performance Share Awards | Time-Based Shares | Stock Options |
Incentive Focus | Short-Term | Short-Term | Long-Term | Long-Term | Long-Term |
Performance Period | Ongoing | Annual | 3 years | Vest over 3 years | Vest over 3 years, with a 10-year term |
Performance / Value Metrics | N/A | Compensable Enterprise Operating Income, Enterprise Comparable Sales, Renew Blue Priorities | Total Shareholder Return ("TSR") | Stock price appreciation | Stock price appreciation |
Fiscal 2016 Summary Compensation Overview
The table below summarizes the total compensation earned by our NEOs during fiscal 2016. See the Executive and Director Compensation — Compensation Discussion and Analysis and the Compensation of Executive Officers — Summary Compensation Table sections of this proxy statement for more information.
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| Name and Principal Position | |
Salary | | Stock Awards(1) | | Option Awards(1) | | Short-Term Incentive Plan Payout | | All Other Compensation | | Total |
| Hubert Joly Chairman and Chief Executive Officer | | $ | 1,175,000 |
| | $ | 8,011,688 |
| | $ | 1,842,715 |
| | $ | 3,814,050 |
| | $ | 29,028 |
| | $ | 14,872,481 |
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| Sharon L. McCollam Chief Administrative and Chief Financial Officer | | $ | 925,000 |
| | $ | 3,039,724 |
| | $ | 1,397,391 |
| | $ | 2,251,913 |
| | $ | 9,669 |
| | $ | 7,623,697 |
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| Shari L. Ballard President, U.S. Retail | | $ | 790,385 |
| | $ | 2,672,270 |
| | $ | 1,228,476 |
| | $ | 1,927,311 |
| | $ | 24,641 |
| | $ | 6,643,083 |
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| R. Michael Mohan Chief Merchandising Officer | | $ | 790,385 |
| | $ | 1,336,135 |
| | $ | 614,238 |
| | $ | 1,927,311 |
| | $ | 10,323 |
| | $ | 4,678,392 |
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| Keith Nelsen General Counsel and Secretary | | $ | 640,385 |
| | $ | 1,102,314 |
| | $ | 506,742 |
| | $ | 1,027,899 |
| | $ | 10,482 |
| | $ | 3,287,822 |
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(1) | The grant date fair value of an award is measured in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation - Stock Compensation ("ASC Topic 718"). The amounts reported have not been adjusted to eliminate service-based forfeiture assumptions. The other assumptions used in calculating these amounts are set forth in Note 7, Shareholders' Equity, to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2016.The grant date fair value for any performance share award is the value at the grant date of the probable outcome of the award.1
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Advisory Vote to Approve Named Executive Officer Compensation
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| For the past five years, our shareholders have had an opportunity to share with us their opinion of our compensation practices through a non-binding advisory "Say on Pay" vote. These past five years have also been a time of significant transformation for the Company. After experiencing significant leadership transitions and challenges in fiscal 2012, we returned to our tradition of stable compensation practices, with a strong focus on performance outcomes. We believe that the shareholder voting results in the past three years reflect the Compensation & Human Resources Committee's approach to our compensation strategy, as well as the changes we made in consideration of shareholder feedback. This year, we again ask for our shareholders' support of our executive compensation practices and look forward to receiving feedback on our program and practices. For more information, see Item No. 3 — Advisory Vote to Approve Named Executive Officer Compensation in this proxy statement.
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Items of Business
As the Company continues our efforts to advance our transformation and create value for our shareholders, we ask shareholders to consider and vote on the following items at this Meeting:
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Item Number | Item Description | Board Recommendation |
1 | Election of Directors | For | | FOR Each
Nominee | |
| | | | We have teneleven director nominees standing for election this year. You will find moreMore information about our nominees'nominees’ qualifications and experience can be found starting on page 2524. | | | | |
2 | 2 | | | Ratification of Appointment of our Independent Registered Public Accounting Firm | For | | FOR | |
| | | | We are asking our shareholders to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2017.2022, as described on page 44. | | | | |
3 | 3 | | | Advisory Vote to Approve our Named Executive Officer Compensation | For | | FOR | |
| For the sixth year, we
| | | We are seeking, in an advisory capacity, approval by our shareholders of our named executive officer compensation, program, the "Say“Say on Pay"Pay” vote. In evaluating this proposal, please review ourOur Compensation Discussion & Analysis ("(“CD &A"&A”), which begins on page 4046, describes our executive compensation programs and describes how we have engaged with shareholders and the compensation decisions of our Compensation and Human Resources Committee.for fiscal 2021. | | | | |
| 4 | | | Shareholder Proposal – Right to Act by Written Consent, if properly presented | | | AGAINST | |
| | | | We are seeking your support in opposition to the shareholder proposal requesting that our Board take steps necessary to permit written consent by shareholders. The proposal and our opposition statement can be found starting on page 80. | | | | |
Attending the Meeting
How will the Meeting be conducted?
The Meeting will be conducted online, in a fashion similar to an in-person meeting. All of our board members and executive officers will attend the Meeting and be available for questions. You may attend the Meeting online, vote your shares electronically, and submit your questions during the Meeting by visiting our virtual shareholder forum at: www.virtualshareholdermeeting.com/BBY2021 and following the instructions on your proxy card.
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* For "Revenue - As Reported to Revenue - As Adjusted," "GAAP to non-GAAP" and "Return on Invested Capital" definitions and reconciliations, please refer to the schedules beginning on page 72 of this proxy statement. | | | | | | 1 | | | | | | 2021 Proxy Statement |
TABLE OF CONTENTS
How can I ask questions during the Meeting?
CORPORATE GOVERNANCE AT BEST BUY
Our Board is elected byQuestions may be submitted prior to the Meeting or you may submit questions in real time during the Meeting through our shareholdersvirtual shareholder forum. We are committed to oversee our business and affairs. In addition, the Board counsels, advises and oversees managementacknowledging each question we receive in the long-term intereststime allotted. We will allot approximately 15 minutes for questions during the Meeting and submitted questions should follow our Rules of Conduct in order to be addressed during the Meeting. If we are unable to answer your question during the Meeting due to time constraints, you are encouraged to contact the Best Buy Investor Relations department at investorrelations@bestbuy.com. Our Rules of Conduct are posted on the forum.
What can I do if I need technical assistance during the Meeting?
If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting log-in page.
If I can’t attend the Meeting, can I vote or listen to it later?
You do not need to attend the online Meeting to vote if you submitted your vote via proxy in advance of the Company, our shareholders and other stakeholders regarding a broad range of subjects, including:
Selecting and evaluating the performance of our CEO (this duty is performed by the independent directors, with the Chairman and CEO abstaining from all discussions);
Reviewing and approving major financial, strategic and operating decisions, and other significant actions;
Overseeing the conduct of our business and the assessment of our business risks to evaluate whether our business is being properly managed;
Overseeing the processes for maintaining the integrity of our financial statements and other public disclosures and complying with legal and ethical standards; and
Planning for CEO succession and monitoring management's succession planning for other senior executives.
Membersmeeting. A replay of the Board monitorMeeting, including the questions answered during the meeting, will be available on www.investors.bestbuy.com.
Additional information about how to vote your shares and evaluateattend our business performance through regular communication with our Chairman and CEO and by attending Board and committee meetings.
Board and Corporate Governance Highlights
Our Board is committed to having a sound governance structure that promotes the best interests of our shareholders. To that end, our Board has evaluated and actively continues to examine emerging corporate governance trends and best practices. Shareholder perspectives play an important role in that process. Some key points regarding our Board and governance structure and practices are as follows:
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• | Corporate Governance Principles. Our Board has adopted Corporate Governance Principles as part of its commitment to good governance practices. These principles are available on our website at www.investors.bestbuy.com.
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• | Annual Elections for Directors. Each year, all directors stand for election by shareholders to serve for a one-year term.
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• | Majority Vote for Directors. We have employed majority voting since our incorporation in 1966.
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• | Predominantly Independent. All of our directors, other than the CEO, are independent.
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• | Lead Independent Director. Our Corporate Governance Principles require us to have a Lead Independent Director with specific responsibilities to ensure independent oversight of management whenever our Chairman is not independent.
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• | Independent Committees. Our Audit, Compensation & Human Resources and Nominating, Corporate Governance & Public Policy Committees are comprised exclusively of independent directors.
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• | Director Retirement Policy. Our directors are required to retire at the expiration of their term upon reaching the age of 75 and must tender their resignation for consideration when their principal employment or affiliation changes.
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• | Outside Board Membership. None of our director nominees serves on more than two public company boards.
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• | Anti-Hedging and Anti-Pledging Policies. We prohibit both hedging and pledging of Company securities by directors and executive officers.
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• | Stock Ownership Guidelines. Our directors and executive officers are required to comply with stock ownership guidelines.
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• | Shareholder Voting Rights. We have no cumulative voting rights and our only class of voting shares is our common stock.
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• | Right to Call a Special Meeting. A shareholder(s) must own 10% of the voting shares of our stock to call a special meeting, or 25% if the special meeting relates to a business combination or change in our Board composition.
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• | No Shareholder Rights Plan (commonly known as a "Poison Pill"). |
• | Shareholder Support for Directors. In 2015, all directors standing for re-election received over 97% support from shareholders.
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• | Board Attendance. On average, our directors attended over 98% of fiscal 2016 Board and Board committee meetings.
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• | Related Party Transactions. None of our directors are involved in a material related party transaction.
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• | Financial Experts. All directors who served on our Audit Committee during fiscal 2016 qualify as financial experts.
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• | Board Diversity. Our Board places an emphasis on diverse representation among its members. Four of our ten director nominees are women.
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Board Leadership
Following our 2015 Meeting Mr. Joly assumed the combined role of Chairman and CEO upon the retirement of Mr. Tyabji, our former Chairman. The Board determined Mr. Joly was the ideal leader to serve as Chairman, in large part due to his ability to build our strategy with the Board and carry it out with management. As Chairman, Mr. Joly consults with the Lead Independent Director to set the agenda for, and he presides over, meetings of the full Board. He is responsible for Board oversight responsibilities, risk management and strategic planning. Consistent with our Corporate Governance Principles, since Mr. Joly is not an independent Chairman, Mr. Fradin was appointed by the Board to serve as our Lead Independent Director, fulfilling the responsibilities discussedcan be found in the General InformationLead Independent Director section of this proxy statement. Additional leadership roles
Corporate Governance
Our long-standing approach to corporate governance is to develop and implement principles that: (1) enable the success of our strategy and business objectives; (2) are rooted in a robust ongoing dialogue with our shareholders; and (3) are inspired by best practices. Consistent with this approach, we continue to be filled by other directors, allbuild upon a strong framework of whom are independentcorporate governance policies and continue to play an active role in our strategic planning, risk oversight and governance ofpractices, including the Company.following:
Lead Independent Director
Our Lead Independent Director role was established in January 2010 in order to provide independent leadership on the Board during times when our Chairman is not independent. The Lead Independent Director (i) presides at all Board meetings at which the Chairman is not present, (ii) presides at executive sessions of independent directors (which take place at each regular Board meeting), (iii) calls additional meetings of the independent directors as appropriate, (iv) serves as a stakeholder liaison on behalf of the independent directors by making himself or herself available for direct consultation and communication with interested parties, as appropriate, and (v) performs such other duties as may be requested from time to time by the Board as a whole, the independent directors, and the Chairman of the Board. He also partners with the Chairman to set the Board meeting agenda and otherwise provides ongoing counsel to the Chairman regarding key items of business and overall Board functions.
Our Lead Independent Director is nominated by the Nominating, Corporate Governance and Public Policy Committee, and final selection is subject to ratification by the vote of a majority of the independent directors on the Board. The Lead Independent Director serves for an annual term beginning at the Board meeting following the first Regular Meeting of Shareholders at which directors are elected.
Board Composition
The Board seeks a wide range of relevant experience and expertise in its directors. In addition, the Board emphasizes independent voices and adding new perspectives to its membership. Currently 90% of our directors are independent, with an average tenure of 4.7 years. In addition, the Board carefully assesses and plans for the director skill sets required in the future, and for an orderly succession and transition of directors, as evidenced by the composition changes over the past four years.
Pursuant to an agreement entered into between the Company and Richard M. Schulze, our founder and beneficial owner of approximately 13.6% of the Company as of the date of this proxy statement, Mr. Schulze was entitled to nominate two directors for appointment to our Board until he reached the age of 75 (which occurred in January 2016). Pursuant to these agreements, Mr. Schulze appointed Mr. Anderson and Mr. Lenzmeier to the Board in 2013. In June 2015, Mr. Lenzmeier retired from the Board, and in March 2016, Mr. Anderson informed the Board that he would not seek re-election and would retire from the Board effective at the Meeting.
For more information regarding our agreements with Mr. Schulze, please see the Certain Relationships and Related Party Transactions section of this proxy statement, as well as the Current Reports on Form 8-K filed by the Company on August 26, 2012, December 14, 2012, March 25, 2013, April 13, 2015 and March 15, 2016.
Director Independence
Pursuant to our Corporate Governance Principles, the Board has established independence standards consistent with the requirements of the SEC and NYSE. To be considered independent under the NYSE rules, the Board must affirmatively determine that a director or director nominee does not have a material relationship with us (directly, or as a partner, shareholder or officer of an organization that has a relationship with us). In addition, each member of the Compensation and Human Resources Committee must meet a standard of “enhanced independence” such that the Board must consider the source of compensation of the director and whether the director is affiliated with us or one of our subsidiaries to determine whether there are any factors that would materially affect a director's ability to be independent, specifically in regards to their duties as a compensation committee member.
NYSE rules generally provide that no director or director nominee may be deemed independent if the director or director nominee:
— has in the past three years:
received (or whose immediate family member has received as a result of service as an executive officer) more than $120,000 during any 12-month period in direct compensation from Best Buy, other than director and committee fees and certain pension payments and other deferred compensation;
been an employee of Best Buy;
had an immediate family member who was an executive officer of Best Buy;
personally worked on (or whose immediate family member has personally worked on) our audit as a partner or an employee of our internal or external auditors or independent registered public accounting firm; or
been (or whose immediate family member has been) employed as an executive officer of another company whose compensation committee at that time included a present executive officer of Best Buy; or
— is:
a partner or employee of our independent registered public accounting firm, or a director whose immediate family member is a partner of such firm or is employed by such firm and personally works on our audit; or
an employee (or has an immediate family member who is an executive officer) of another company that has made payments to Best Buy, or received payments from Best Buy, for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other company's consolidated gross revenues.
Under our director independence standards described above, the Board has determined that each director who served during any part of fiscal 2016 and each director nominee is independent, with the exception of Mr. Joly, our Chairman and CEO. The Board based these determinations primarily on a review of the responses of the directors to questions regarding employment and compensation history, affiliations, family and other relationships, and on discussions with our directors. As part of its determination of Mr. Anderson's independence, the Board considered his past employment relationship with us and determined that Mr. Anderson could be deemed independent as of November 2013, three years after the termination of his employment arrangement with the Company. Notwithstanding his independence under NYSE rules, in light of his past affiliation with the Company, the Board determined not to place Mr. Anderson on the Audit Committee, the Compensation and Human Resources Committee, or the Nominating, Corporate Governance and Public Policy Committee of the Board. Mr. Anderson informed the Board in March 2016 that he would not seek re-election and would retire from the Board effective at the Meeting.
The Board also reviewed our relationships with companies with which our directors are affiliated, including our relationship with IBM Corp., a company affiliated with Mr. Kenny. Mr. Kenny, a director since September 2013, was appointed to serve as General Manager of IBM Watson, a division of IBM Corp., in January 2016. Since 2000, IBM Corp. has provided I.T. services to us. The amounts we have paid to IBM Corp. were less than 2% of the annual consolidated revenue of each of Best Buy and IBM for each of the past three fiscal years. In addition, Mr. Kenny did not influence or participate in negotiating our agreements with IBM. The Board determined that the Company's relationship with IBM Corp. was not material and did not impair Mr. Kenny's independence.
Board Meetings and Attendance
During fiscal 2016, the Board held four regular meetings and three special meetings. Each incumbent director attended, in person or by telephone, at least 90% of the meetings of both the Board and committees on which he or she served. Directors are required to attend our Regular Meetings of Shareholders, and all of the then-serving directors attended the 2015 Meeting.
Executive Sessions of Independent Directors
In order to promote open discussion among independent directors, the Board has a policy of conducting executive sessions of independent directors during each regularly scheduled Board meeting. During fiscal 2016, our Lead Independent Director, Mr. Fradin, chaired the executive sessions of independent directors in accordance with our Corporate Governance Principles and consistent with NYSE rules regarding executive sessions.
Committees of the Board
The Board has the following four committees: the Audit Committee, the Compensation and Human Resources Committee (the "Compensation Committee"); the Finance and Investment Policy Committee; and the Nominating, Corporate Governance and Public Policy Committee (the "Nominating Committee"). The charters for each committee are posted on our website at www.investors.bestbuy.com. The charters include information regarding each committee's composition, purpose and responsibilities.
The Board has determined that all members of the Audit Committee, Compensation Committee and Nominating Committee are independent directors as defined under the SEC and NYSE rules, and all members of the Compensation Committee are "outside directors" for purposes of Internal Revenue Code section 162(m). The Board has also determined that all of the members of the Audit Committee during fiscal 2016 qualified as audit committee financial experts under SEC rules.
The key responsibilities, fiscal 2016 membership and number meetings for each committee are set forth below:
| Board Structure | | | | | | | |
| • | | | Independent Chairman | | | • | | | All Independent Committees | |
Committee | Key Responsibilities• | Fiscal 2016 Members | Number of Meetings held in Fiscal 2016 | Annual Director Elections | | | • | | | No Director Related Party Transactions | |
Audit | • | Assists the | | Robust Annual Board in its oversight of:Evaluation Process | David W. Kenny*† | 8 | • | | | Director Overboarding Policy | |
Ÿ | the integrity of our financial statements and financial reporting processes;• | J. Patrick Doyle† | | Majority Vote for Directors | | | • | | | Director Retirement Policy | |
Ÿ | our internal accounting systems and financial and operational controls;
| Karen A. McLoughlin† | | | | | | | | | |
Ÿ | the qualifications and independence of our independent registered public accounting firm;Shareholder Rights | Tommy Millner† | | Compensation | |
Ÿ | the performance of our internal audit function and our independent registered public accounting firm;• | Gerard R. Vittecoq† | | No Cumulative Voting Rights | | | • | | | Pay for Performance Compensation Programs | |
Ÿ | the preparation of a report as required by the SEC to be included in this proxy statement;• | | | No Poison Pill | | | • | | | Annual Say-on-Pay Vote | |
Ÿ | our legal compliance and ethics programs, our legal, regulatory and risk oversight requirements, including the major risks facing the Company (including risks related to finance, operations and cyber-security), and our Code of Business Ethics.• | |
Compensation & Human Resources | Ÿ | Responsible for executive officer and director compensation, including the establishment of our executive officer and director compensation philosophies, evaluating the performance of our CEO, approving CEO and executive officer compensation, and preparation of a report as required by the SEC to be included in this proxy statement.Proxy Access By-Laws | Russell P. Fradin* | 5 |
| Lisa M. Caputo |
Ÿ• | Responsible for succession planning and compensation-related risk oversight. | Kathy J. Higgins Victor |
Ÿ | Approves and oversees the development and evaluation of equity-based and other incentive compensation and certain other employee benefit plans. | David W. Kenny |
Finance & Investment Policy | Ÿ | Provides oversight of, and advises the Board regarding, our financial policies and financial condition to help enable us to achieve our long-range goals. | Gerard R. Vittecoq* | 8 |
Ÿ | Evaluates and monitors the: (i) protection and safety of our cash and investments; (ii) achievement of reasonable returns on financial assets within acceptable risk tolerance; (iii) maintenance of adequate liquidity to support our activities; (iv) assessment of the cost and availability of capital; and (v) alignment of our strategic goals and financial resources. | Bradbury H. Anderson** |
| J. Patrick Doyle |
Ÿ | Responsible for ensuring we have adequate liquidity and approving certain significant contractual obligations. | Karen A. McLoughlin |
Nominating, Corporate Governance, & Public Policy | Ÿ | Reviews and recommends corporate governance principles to the Board, screens and presents qualified individuals for election to the Board, and oversees the evaluation of the performance of the Board and its committees. | Kathy J. Higgins Victor* | 5 |
Ÿ | Assists the Board with general corporate governance, including Board organization, membership, training and evaluation. | Lisa M. Caputo |
Ÿ | Oversees matters of public policy and corporate responsibility and sustainability that affect us domestically and internationally. | Tommy Millner |
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† | Designated as an "audit committee financial expert" |
** Mr. Anderson informed the Board in March 2016 that he would not seek re-election and would retire from the Board effective at the Meeting.
In March 2016, the Board appointed Claudia F. Munce to the Audit Committee and Finance and Investment Policy Committee, effective March 15, 2016.
Board Risk Oversight
Our Board is responsible for oversight of enterprise risk. The Board considers enterprise risk factors as critical in its review of business strategy and performance and ensures that there is an appropriate balance of risk and opportunity.
The Board approaches its risk oversight responsibilities by reviewing management’s assessment of enterprise risks based on internal and external factors and ensuring appropriate Board oversight of ongoing management efforts to address those risks. Management is responsible for the day-to-day risk management processes, including assessing and taking actions necessary to manage risk incurred in connection with the operation of our business. Management then reviews significant enterprise risks and our general risk management strategy with the Board as follows:
Key strategic risk factors, such as the competitive environment, strategic prioritization, and global brand issues, are considered by the full Board as part of the Board’s overall review of the Company’s strategy and strategic plans.
Risks associated with our financial reporting processes, legal and regulatory compliance, data privacy and security (including cyber-security) and other operational matters are reviewed by our Audit Committee.
Risks associated with our compensation plans, benefits and management succession are reviewed by our Compensation Committee.
Risks associated with our investment portfolio, capital markets and liquidity are reviewed by our Finance and Investment Policy Committee.
Risks associated with our Board processes, corporate governance, public policy and social responsibility are reviewed by our Nominating Committee.
Risk items reviewed in Board committees are then escalated to the full Board as necessary.
The Audit Committee also oversees management's processes to identify and quantify the material risks that we face. In connection with its risk oversight role, the Audit Committee meets privately with representatives of our independent registered public accounting firm, our internal audit staff and our legal staff. Our internal audit staff, who report directly to the Audit Committee at least quarterly, assist management in identifying, evaluating and implementing risk management controls and procedures to address identified risks.
Compensation Risk Assessment
In connection with their oversight of compensation-related risks, Compensation Committee members annually review the most important enterprise risks to ensure that compensation programs do not encourage risk-taking that is reasonably likely to have a material adverse effect on us. As in past years, the review process in fiscal 2016 identified our existing risk management framework and the key business risks that may materially affect us, reviewed all compensation plans and identified those plans that are most likely to impact these risks or introduce new risks, and balanced these risks against our existing processes and compensation program safeguards. The review process also took into account mitigating features contained within our compensation plan design, which includes elements such as:
metric-based pay;
time matching performance periods;
payment for outputs;
goal diversification;
stock ownership guidelines;
payment caps; and
clawbacks.
The Compensation Committee also considered additional controls outside of compensation plan design which contribute to risk mitigation, including the independence of our performance measurement teams and our internal control environment.
Based upon the process we employed, the Compensation Committee determined that our compensation programs do not encourage risk-taking that is reasonably likely to result in a material adverse effect.
Board Evaluation Process
Our Nominating Committee oversees the evaluation of the performance of the Board, its committees and individual directors. On an annual basis, members of the Board complete a questionnaire evaluating the performance of the Board as a whole, each member’s respective committee, and the performance of the Chairman and Lead Independent Director. The questionnaire reflects responsibilities and roles as outlined within the Corporate Governance Principles and each committee’s respective charter, as well as more general performance-related questions. The Nominating Committee reviews the results of these questionnaires and determines whether the results warrant any action. The results and any proposed action are then shared with the full Board for further discussion and approval of final action plans.
In addition, the Chair of our Nominating Committee, the Board Chairman, and the Lead Independent Director conduct individual director assessments to review each director’s contributions to the Board during the past year and his or her performance against the director qualification standards and Board needs. As part of this process, the Nominating Committee Chair conducts confidential interviews with each director on an annual basis. The Nominating Committee also annually reviews the skills and qualifications of the Board members and the strategic goals of the Company to determine whether the skills on the Board continue to align with the Company’s strategy. The interviews, board composition analysis and individual assessments are utilized by the Nominating Committee to assess whether a director should continue to serve on the Board and stand for re-election at the next Regular Meeting of Shareholders and to otherwise address Board composition needs.
As part of the its annual review of the board evaluation process, the Nominating Committee decided to add a third-party evaluator component to the process on a periodic basis. In fiscal 2017, in addition to the process described above, the Nominating Committee has engaged an independent third-party consultant to conduct individual interviews with each director and perform a comprehensive analysis of the Board's evaluation process and overall effectiveness. The Committee anticipates utilizing this approach periodically to obtain independent assessments of its performance.
CEO Evaluation Process
Our Compensation Committee conducts a robust annual CEO evaluation process, consisting of both a performance review and a compensation analysis. The performance evaluation component includes an assessment of the Company's performance in light of set objectives, personal interviews with the individual Board members and the CEO's direct reports, 360 feedback evaluations provided by over 30 individuals who interact with the CEO, and a detailed CEO self-assessment. Separately, the Company's Human Resources consultant conducts extensive market research. CEO compensation market data is collected from Fortune 100 companies, the retail industry generally, and our peer group to ensure both market competitiveness and appropriateness of our CEO's compensation relative to his peers. The Compensation Committee's independent consultant reviews the market data and provides its recommendations to the Compensation Committee. Once all of the relevant performance and compensation data has been collected, the Compensation Committee meets in executive session to discuss the CEO's performance and compensation in order to finalize its recommendation to the Board. The Board then meets privately to discuss the Compensation Committee's findings and recommendations and makes the final decision on CEO performance and compensation. Our Chairman and CEO abstains from participating in all related discussions of the Compensation Committee and Board prior to delivery of the final assessment.
Director Orientation and Continuing Education
Our Nominating Committee oversees the orientation and continuing education of our directors. Director orientation familiarizes directors with our strategic plans, significant financial, accounting and risk management issues, compliance programs, policies, principal officers, internal auditors and our independent registered public accounting firm. The orientation also addresses Board procedures, director responsibilities, our Corporate Governance Principles and our Board committee charters.
We also offer continuing education programs and provide opportunities to attend commercial director education seminars outside of the Company to assist our directors in maintaining their expertise in areas related to the work of the Board and the directors' committee assignments.
In fiscal 2016, the Board provided director orientation to Ms. McLoughlin, offered refreshment orientation to the other Board members and scheduled its annual continuing education seminar for the full Board on the topics of cybersecurity and privacy to be held in June 2016.
Anti-Hedging and Anti-Pledging Policies
| | • | | | No Exclusive Forum/Venue or Fee-Shifting Provisions | | | • | | | Clawback Policy for both Cash and Equity
Our executive officersAwards
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| • | | | No Supermajority Voting Provisions in our Articles of Incorporation (“Articles”) | | | • | | | Stock Ownership Guidelines for Directors and Board members are prohibited from pledging Company securities as collateral for a loan or from holding Company securities in a margin account. The Board recently strengthened the policy by removing the ability for the Compensation Committee to approve exceptions in advance. In addition, all employees and Board members are prohibited from hedging Company securities, including by way of forward contracts, equity swaps, collars, exchange funds or otherwise.Executives | |
Additional information on our Corporate Governance policies and practices can be found in the Corporate Governance at Best Buy section of this proxy statement.
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TABLE OF CONTENTS
Environment, Social & Governance
Our Board, with oversight by the Nominating, Corporate Governance and Public Policy Committee, is integrally involved in the Company’s environmental, social and governance (“ESG”) initiatives. We are an organization built upon values-driven leadership and we are focused on our purpose to enrich lives through technology. We continue to focus on issues in which we have the most significant impact, such as climate change, e-waste and the technology education gap. We are honored to be recognized for the progress we have made in building a better world with all of our stakeholders. Please see our annual ESG Report, available at www.Corporate.BestBuy.com/Sustainability for more details. Our Fiscal Year 2021 report, to be published in June 2021, will include disclosures aligned with the Sustainability Accounting Standards Board (SASB), as well as a summary of our 2020 Employer Information EEO-1 Report.
Additional information regarding our purpose and programs relating to our ESG efforts can be found in the Corporate Governance at Best Buy — Environment, Social & Governance section of this proxy statement.
Item No. 1: Election of Directors
The following individuals are standing for election to our Board. The Board recommends a vote FOR each of the nominees. All nominees are current members of the Board.
| Corie S. Barry | | | 2019 | | | CEO,
Our stock ownership guidelines for executive officers are discussed in the Executive and Director Compensation —Compensation Discussion and Analysis — Executive Compensation Elements — Other Compensation section.
Shareholder Engagement
We regularly engage with our shareholders on a variety of topics throughout the year to ensure we are addressing their questions and concerns, to seek input and to provide perspective on Company policies and practices. We have taken several actions in recent years in consideration of shareholder feedback elicited during this process, including: declassification of our Board, the determination to hold the advisory vote on our executive compensation on an annual basis, adjustments to the director appointments on our Board committees, and the development of our corporate social responsibility program and reporting. We also continue to facilitate direct shareholder communication with management and members of our Board and the ability to easily access and obtain information regarding our Company on our website at www.investors.bestbuy.com. Please see Executive and Director Compensation — Introduction for more information regarding actions taken as a result of shareholder feedback received on our prior year's executive compensation decisions.
Public Policy
As a leading global retailer and corporate citizen, we believe that it is important to work with policymakers on issues impacting our customers, employees, businesses, shareholders and communities. We know that collaboration helps bring about change that better serves our communities where we live and work. Our public policy work directly aligns with our aspiration to be environmentally and socially accountable for our brands and business operations worldwide. In fiscal 2016, our public policy priorities included: marketplace fairness, privacy, connectivity, financial services, energy, environment and supply chain. More information about these priorities, as well as our annual political activity reports and related policies can be found at https://corporate.bestbuy.com under "Government Affairs."
Communications with the Board
Shareholders and interested parties who wish to contact the Board, any individual director, or the independent directors as a group, are welcome to do so in writing, addressed to such person(s) in care of:
Mr. Keith J. Nelsen
General Counsel and Secretary
Best Buy Co., Inc. | | | 7601 Penn Avenue SouthNo
| | | Richfield, Minnesota 55423
| | | | | | | | | | |
| Lisa M. Caputo | | | 2009 | | | Executive Vice President, Chief
Mr. Nelsen will forward all written shareholder correspondence to the appropriate director(s), except for spam, junk mail, mass mailings, customer complaints or inquiries, job inquiries, surveys, business solicitations or advertisements, or patently offensive or otherwise inappropriate material. Mr. Nelsen may, at his discretion, forward certain correspondence, such as customer-related inquiries, elsewhere within the Company for review and possible response. Comments or questions regarding our accounting, internal controls or auditing matters will be referred to the Audit Committee. Comments or questions regarding
Marketing, Communications & Customer Experience Officer,
The Travelers Companies, Inc. | | | Yes | | | | | | √ | | | | | | C | |
| J. Patrick Doyle(1) | | | 2014 | | | Executive Partner,
23The Carlyle Group
| | | Yes
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TABLE OF CONTENTS
| David W. Kenny | | | 2013 | | | CEO,
Nielsen | | | Yes | | | | | | C | | | | | | √ | |
| Mario J. Marte | | | 2021 | | | Chief Financial Officer,
Chewy, Inc. | | | Yes | | | √ | | | | | | | | | √ | |
| Karen A. McLoughlin | | | 2015 | | | Chief Financial Officer (Former),
Cognizant Technology Solutions Corp. | | | Yes | | | √ | | | | | | C | | | | |
| Thomas L. Millner | | | 2014 | | | CEO (Former),
Cabela’s Inc. | | | Yes | | | C | | | | | | | | | √ | |
| Claudia F. Munce | | | 2016 | | | Venture Advisor,
New Enterprise Associates | | | Yes | | | √ | | | | | | √ | | | | |
| Richelle P. Parham | | | 2018 | | | Partner & Managing Director,
WestRiver Group | | | Yes | | | | | | √ | | | | | | √ | |
| Steven E. Rendle | | | 2021 | | | Chairman, President & CEO,
VF Corp. | | | Yes | | | √ | | | | | | √ | | | | |
| Eugene A. Woods | | | 2018 | | | CEO,
Atrium Health | | | Yes | | | | | | √ | | | √ | | | | |
(1)
| Mr. Doyle serves as Chairman. |
Key: AC = Audit Committee; CC = Compensation & Human Resources Committee; FC = Finance & Investment Policy Committee; NC = Nominating, Corporate Governance & Public Policy Committee √ = Member; C = Chair
The Board seeks a wide range of experience and expertise from a variety of industries and professional disciplines in its directors and carefully assesses and plans for the director skill sets, qualifications and diverse perspectives required to support the Company’s long-term strategic goals. Our slate of director nominees reflects the strong results of these efforts.
Additional information about each of our nominees and director qualification and nomination process can be found in Item of Business No. 1 — Election of Directors.
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Item No. 2: Appointment of Independent Registered Public Accounting Firm
The Board recommends a vote FOR ratification of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending January 29, 2022.
Deloitte & Touche LLP (“D&T”) served as our auditors for fiscal 2021. Our Audit Committee has selected D&T to audit our financial statements for fiscal 2022 and is submitting its selection of our independent registered public accounting firm for ratification by the shareholders in order to ascertain the view of our shareholders on this selection. The following table summarizes the aggregate fees incurred for services rendered by D&T during fiscal 2021 and fiscal 2020. Additional information can be found in Item of Business No. 2 — Ratification of Appointment of our Independent Registered Public Accounting Firm.
| Audit Fees | | | $2,973,000 | | | $2,873,000 | |
| Audit-Related Fees | | | 368,000 | | | 380,000 | |
| Tax Fees | | | — | | | — | |
| Total Fees | | | $3,341,000 | | | $3,253,000 | |
Item No. 3: Say-on-Pay: Advisory Vote to Approve Named Executive Officer
Compensation
The Board recommends a vote FOR approval of our named executive officer (“NEO”) compensation.
Our shareholders have consistently strongly supported our executive compensation program. For the last five years, our average Say-on-Pay vote has been 95.7%. We believe this support reflects our strong pay-for-performance philosophy, our commitment to sound compensation policies, and our active engagement and open dialogue with our shareholders. The Compensation Committee regularly takes feedback received from shareholders into consideration when making decisions regarding our executive compensation program.
Our executive compensation program contains the following elements:
| Base Salary | | | Cash | | | Provide competitive, fixed compensation to attract and retain executive talent. | |
| Short-Term Incentive | | | Cash award paid based on achievement of directorsvarious performance metrics | | | Create a strong financial incentive for achieving or exceeding Company performance goals. | |
| Long-Term Incentive | | | Stock options, performance-conditioned time-based restricted shares, time-based restricted shares and other corporate governance matters will be referred to the Nominating Committee. Comments or questions regarding executive compensation will be referred to the Compensation Committee.performance share awards | | | Create a strong financial incentive for increasing shareholder value, encourage ownership stake, and promote retention. | |
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Pay is tied to performance. The majority of target executive compensation is not guaranteed and is based on performance metrics designed to drive shareholder value, as summarized below for the CEO and other NEOs (excluding the CEO).
Additional information can be found in Item of Business No. 3 — Advisory Vote to Approve Named Executive Officer Compensation and the Compensation Discussion and Analysis sections of this proxy statement.
Item No. 4: Shareholder Proposal Right to Act by Written Consent
The Board recommends a vote AGAINST the shareholder proposal requesting that our Board take the steps necessary to permit written consent by shareholders.
Additional information can be found in Item of Business No. 4 — Shareholder Proposal – Right to Act by Written Consent section of this proxy statement.
Corporate Governance Website | | | | | | | | | | | | |
If you would like additional information about our corporate governance practices, you may view the following documents at www.investors.bestbuy.com in the Corporate Governance section.
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BEST BUY CO., INC.
7601 Penn Avenue South
Richfield, Minnesota 55423
PROXY STATEMENT
REGULAR MEETING OF SHAREHOLDERS — JUNE 16, 2021
This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (“Board”) of Best Buy Co., Inc. (“Best Buy,” “we,” “us,” “our” or the “Company”) to be voted at our 2021 Regular Meeting of Shareholders (the “Meeting”) to be held virtually on Wednesday, June 16, 2021, at 9:00 a.m., Central Time, at www.virtualshareholdermeeting.com/BBY2021 or at any postponement or adjournment of the Meeting. On or about May 5, 2021, we mailed or made available our proxy materials, including the proxy statement, our Annual Report and form of proxy or the Notice of Internet Availability.
What is the purpose of the Meeting?
At the Meeting, shareholders will vote on the items of business outlined in the Notice of 2021 Regular Meeting of Shareholders (“Meeting Notice”) included as the cover page to this proxy statement. In addition, management will provide a brief update on our business and respond to questions from shareholders.
Why did I receive this proxy statement and a proxy card or the Notice of Internet Availability?
You received this proxy statement and a proxy card or the Notice of Internet Availability because you owned shares of Best Buy common stock as of April 19, 2021, the record date for the Meeting and are entitled to vote on the items of business at the Meeting. This proxy statement describes the items of business that will be voted on at the Meeting and provides information on these items so that you can make an informed decision.
How can I attend the Meeting?
You can attend the meeting online by logging on to www.virtualshareholdermeeting.com/BBY2021 and following the instructions provided on your proxy or notice card.
How will the Meeting be conducted?
The Meeting will be conducted online, in a fashion similar to an in-person meeting. All of our board members and executive officers will attend the Meeting and be available for questions. You will be able to attend the Meeting online, vote your shares electronically, and submit your questions during the Meeting by visiting our virtual shareholder forum at: www.virtualshareholdermeeting.com/BBY2021 and following the instructions on your proxy card.
How can I ask questions during the Meeting?
Questions may be submitted prior to the Meeting through our virtual shareholder forum at www.virtualshareholdermeeting.com/BBY2021, or you may submit questions in real time during the meeting through the forum. We are committed to acknowledging each question we receive in the time allotted. We will allot approximately 15 minutes for questions during the Meeting and submitted questions should follow our Rules of Conduct for the meeting in order to be addressed during the Meeting. If we are unable to answer your question during the Meeting due to time constraints, you are encouraged to contact the Best Buy Investor Relations department at investorrelations@bestbuy.com. Our Rules of Conduct are posted on the forum.
What can I do if I need technical assistance during the Meeting?
If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual shareholder meeting log-in page.
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If I can’t attend the Meeting, can I vote or listen to it later?
You do not need to attend the online Meeting to vote if you submitted your vote via proxy in advance of the meeting. A replay of the Meeting, including the questions answered during the meeting, will be available on www.investors.bestbuy.com.
Who may vote?
In order to vote at the Meeting, you must have been a shareholder of record of Best Buy as of April 19, 2021, which is the record date for the Meeting. If your shares are held in “street name” (that is, through a bank, broker or other nominee), you will receive instructions from the bank, broker or nominee that you must follow in order for your shares to be voted as you choose.
When is the record date?
The Board has established April 19, 2021, as the record date for the Meeting.
How many shares of Best Buy common stock are outstanding?
As of the record date, there were 250,398,562 shares of Best Buy common stock outstanding. There are no other classes of capital stock outstanding.
What am I voting on, how many votes are required to approve each item, how are votes counted and how does the Board recommend I vote:
| Corporate Governance Principles
Audit Committee Charter
Compensation and Human Resources Committee Charter
Finance and Investment Policy Committee Charter
Nominating, Corporate Governance and Public Policy Committee Charter
Code of Business Ethics
Best Buy Co., Inc. 2014 Omnibus Incentive Plan
Policy for Shareholder Nomination of Candidates to Become DirectorsItem 1 - The election of the Company11 director nominees listed in this proxy statement
| | | Process for Communication with the Board
ITEM OF BUSINESS NO. 1 — ELECTION OF DIRECTORS
General Information
Our By-laws provide that our Board consist of one or more directors and that the number of directors may be increased or decreased from time to time by theThe affirmative vote of a majority of votes cast with respect to the directors serving at the time that the action is taken.director.
| | | “FOR”
“AGAINST”
“ABSTAIN” | | | FOR | | | No | | | None | |
| Item 2 – The number of directors on our Board is reviewed and set by our Board no less often than annually. In March 2016, the Board set the number of directors at eleven, based on the number of directors currently serving. After Mr. Anderson's retirement at the Meeting, the Board intends to reduce the number of directors to ten. The Board will continue to evaluate the sizeratification of the Board and make adjustmentsappointment of Deloitte & Touche LLP as needed to meet the current and future needs of the Company.
Director Qualification Standards
In seeking new board members, we focus on adding new skills and experiences necessary to oversee the Company's business strategy and fulfill the Board's risk oversight obligations. Our objective is to identify and retain directors that can effectively develop the Company's strategy and oversee management's execution of that strategy. We only consider director candidates who embody the highest standards of personal and professional integrity and ethics and are committed to a culture of transparency and open communication at the Board level and throughout the Company. Successful candidates are dedicated to accountability and continuous improvement with a belief in innovation as a key business success factor. They are also actively engaged and have an innate intellectual curiosity and entrepreneurial spirit.
As part of its annual evaluation process for director nominees, the Nominating Committee considers other criteria, including the candidate's history of achievement and superior standards, ability to think strategically, willingness to share examples based upon experience, policy-making experience, and ability to articulate a point-of-view, take tough positions and constructively challenge management. Directors must also be committed to actively engaging in their Board roles, with sufficient time to carry out the duties of Board and Board committee membership. Finally, one or more of our directors must possess the education or experience required to qualify as an "audit committee financial expert" pursuant to SEC rules.
Our Corporate Governance Principles establish our policy of considering diversity in the director identification and nomination process. When considering Board candidates, the Nominating Committee seeks nominees with a broad range of experience from a variety of industries and professional disciplines, such as finance, academia, law and government, along with a diversity of gender, ethnicity, age and geographic location. The Nominating Committee does not assign specific weights to particular criteria, and no particular criterion is necessarily applied to all prospective nominees. When the Nominating Committee identifies an area of which the Board may benefit from greater representation, it may focus its candidate search on particular experience, background or diversity characteristics, including gender, ethnic and geographical attributes. The Board believes that diversity in the backgrounds and qualifications of Board members ensures the mix of experience, knowledge and abilities necessaryindependent registered public accounting firm for the Board to fulfill its responsibilities and leads to a more effective oversight and decision-making process.fiscal year ending January 29, 2022
The grid below summarizes the key qualifications, skills and attributes each of our directors possess that were most relevant to the decision to nominate him or her to serve on the Board. The lack of a mark does not mean the director does not possess that qualification or skill; rather a mark indicates a specific area of focus or expertise on which the Board relies most heavily. Each director’s biography describes these qualifications and relevant experience in more detail.
| | | | | | | | | | | | | | Caputo | Doyle | Fradin | Higgins Victor | Joly | Kenny | McLoughlin | Millner | Munce | Vittecoq | Academia / Education | ü | | | ü | | | | | | | Significant experience in roles at one or more academic institutions; helpful in bringing thought leadership to the development of our business strategy | Business Operations | | ü | ü | | ü | ü | | ü | ü | ü | Experience in an operational role with one or more businesses; provides understanding to assess our business strategy and execution | Chief Executive Officer | | ü | ü | | ü | ü | | ü | | | Past or current service as a chief executive in a for-profit company; provides an enhanced ability to support our CEO and develop our leadership team | Corporate Governance | ü | | ü | ü | | | | | | | Experience in managing or advising on corporate governance matters for corporations; supports our objective to have corporate governance practices that reflect industry best practices | Customer Engagement / Marketing | ü | ü | | | ü | ü | | ü | | | Past or current service in a senior marketing position; important in understanding and assessing the needs of our customers | Digital /
E-commerce
| ü | ü | | | ü | ü | | ü | ü | | Overseeing part or all of a significant E-commerce business; relevant to the development of our omni-channel strategy | Finance | | ü | ü | | ü | ü | ü | ü | | ü | Having served as or overseen a senior financial officer; important to oversee and understand our financial statements, capital structure and internal controls | Government / Public Policy | ü | | | | | | | | | | Having held one or more significant positions in local, state or federal government; valuable in assessing the impact of new regulations on our industry | Investments / Venture Capital | | | ü | | | | | | ü | | Having held a significant position with an investment or venture capital firm; relevant to evaluating our growth, innovation, and investment strategies | Professional Services | | | ü | | ü | ü | ü | | | | Experience in overseeing or managing a professional services business; important in understanding the needs of our services strategy | Retail / Consumer Services | ü | ü | | ü | ü | ü | | ü | | | Experience at a major retailer or consumer services-oriented business; important in understanding our industry, business needs and strategic goals | Talent Management | | | ü | ü | | | | | | | Current or past experience managing or advising human resource functions; helpful to our efforts to attract, retain, and motivate talent within the Company | Technology | | | ü | | ü | ü | ü | | ü | | Having served a senior technology role or a senior role in a technology company; important as we assess our technology needs and those of our customers |
Director Nomination Process
The Nominating Committee is responsible for screening and recommending to the full Board director candidates for nomination. The Nominating Committee often engages a third-party search firm to assist in identifying appropriate candidates to consider as additions to our Board. When the Board is seeking to fill an open director position, the Nominating Committee will also consider nominations received from our shareholders, provided that proposed candidates meet the requisite director qualification standards discussed within this section of our proxy statement.
When the Board elects to add a director to the Board, the Nominating Committee will announce the search and post any additional search criteria on our website at www.investors.bestbuy.com. Candidates recommended by shareholders, if qualified, will be considered in the same manner as any other candidate.
The Nominating Committee will then evaluate the resumes of any qualified candidates recommended by search firms or shareholders, as well as by members of the Board. All candidates are evaluated based on the qualification standards discussed above and the current and future needs of the Board.
Shareholder nominations must be accompanied by a candidate resume that addresses the extent to which the nominee meets the director qualification standards and any additional search criteria posted on our website. Nominations will be considered only if we are then seeking to fill an open director position. All nominations by shareholders should be submitted as follows:
Chair, Nominating, Corporate Governance and Public Policy Committee
c/o Mr. Keith J. Nelsen
General Counsel and Secretary
Best Buy Co., Inc.
7601 Penn Avenue South
Richfield, Minnesota 55423
Voting Information
You may vote for all, some or none of the nominees for election to the Board. However, you may not vote for more individuals than the number nominated. Each of the nominees has agreed to continue serving as a director if elected. However, if any nominee becomes unwilling or unable to serve and the Board elects to fill the vacancy, the Proxy Agents named in the proxy will vote for an alternative person nominated by the Board. Our Articles prohibit cumulative voting, which means you can vote only once for any nominee. The affirmative vote of a majority of the votes castvoting power of the shares present in person or represented by proxy and entitled to vote on this item of business or, if greater, the vote required is a majority of the voting power of the minimum number of shares entitled to vote that would constitute a quorum at the Annual Meeting.
| | | FOR | | | Yes | | | Against | |
| Item 3 - The non-binding advisory vote to approve our named executive officer compensation | | | FOR | | | No | | | Against | |
| Item 4 – Shareholder proposal regarding the right to act by written consent | | | AGAINST | | | No | | | Against | |
(1)
| If you are a record holder and you sign and submit your proxy card without indicating your voting instructions, your shares will be voted in accordance with respect to the Board’s recommendation. |
(2)
| A broker non-vote will not count as a vote for or against a director is required to elect a director.
PROXY CARDS THAT ARE PROPERLY EXECTUED WILL BE VOTED FOR THE ELECTION OF ALL OF THE NOMINEES UNLESS OTHERWISE SPECIFIED.
Board Voting Recommendation
The Board recommends that shareholders vote FORand will have no effect on the outcome of the election of the 11 director nominees disclosed in this proxy statement. A broker non-vote will have no effect on Items 2, 3 and 4 unless a majority of the voting power of the minimum number of shares entitled to vote that would constitute a quorum at the Meeting is required in order to approve the item as described in the “Vote Required” column above, in which case a broker non-vote will have the same effect as a vote “Against”.
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How do I vote?
If you are a shareholder of record (that is, if your shares are owned in your name and not in “street name”), you may vote:
Via the internet at www.proxyvote.com;
By telephone (within the U.S. or Canada) toll-free at 1-800-690-6903;
By mail, by signing and returning the enclosed proxy card if you have received paper materials; or
By attending the virtual Meeting and voting online at www.virtualshareholdermeeting.com/BBY2021.
If your shares are held in a brokerage account by a broker, bank or other nominee, you should follow the voting instructions provided by your broker, bank or other nominee.
If you wish to vote by telephone or via the internet, you must do so before 11:59 p.m., Eastern Time, on Tuesday, June 15, 2021. After that time, telephone and internet voting on www.proxyvote.com will not be permitted and any shareholder of record wishing to vote thereafter must vote online during the Meeting. Shareholders of record will be verified online by way of the personal identification number included on your proxy or notice card. Voting by a shareholder during the Meeting will replace any previous votes submitted by proxy.
We have made all proxy materials available via the internet. However, you may opt to receive paper copies of proxy materials, at no cost to you, by following the instructions contained in the Notice of Internet Availability that we have mailed to most shareholders. We encourage you to take advantage of the option to vote your shares electronically through the internet or by telephone. Doing so will result in cost savings for the Company.
How are my voting instructions carried out?
When you vote via proxy, you appoint the Chairman of the Board, J. Patrick Doyle, and the Secretary of the Company, Todd G. Hartman (collectively, the “Proxy Agents”), as your representatives to vote at the Meeting. The Proxy Agents will vote your shares at the Meeting, or at any postponement or adjournment of the Meeting, as you have instructed them on the proxy card. If you return a properly executed proxy card without specific voting instructions, the Proxy Agents will vote your shares in accordance with the Board’s recommendations as disclosed in this proxy statement. If you submit a proxy, your shares will be voted regardless of whether you attend the Meeting. Even if you plan to attend the Meeting, it is advisable to vote your shares via proxy in advance of the Meeting in case your plans change.
If an item properly comes up for vote at the Meeting, or at any postponement or adjournment of the Meeting, that is not described in the Meeting Notice, including adjournment of the Meeting and any other matters incident to the conduct of the Meeting, the Proxy Agents will vote the shares subject to your proxy in their discretion. Discretionary authority for them to do so is contained in the proxy.
How many votes do I have?
You have one vote for each share you own, and you can vote those shares for each item of business to be addressed at the Meeting.
How many shares must be present to hold a valid Meeting?
For us to hold a valid Meeting, we must have a quorum. In order to have a quorum, a majority of the outstanding shares of our common stock that are entitled to vote need to be present or represented by proxy at the Meeting. Your shares will be counted as present at the Meeting if you:
Vote prior to the Meeting via the internet or by telephone;
Properly submit a proxy card (even if you do not provide voting instructions); or
Vote while attending the Meeting online.
Abstentions and shares represented by “broker non-votes,” as described below, are counted as present and entitled to vote for purposes of determining a quorum.
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What if I change my mind after I vote via proxy?
If you are a shareholder of record, you may revoke your proxy at any time before your shares are voted by:
Submitting a later-dated proxy prior to the Meeting (by mail, internet or telephone);
Voting online during the Meeting (attendance will not, by itself, revoke a proxy); or
Providing written notice of revocation to Best Buy’s Secretary at our principal office at any time before your shares are voted.
If your shares are held in a brokerage account by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or other nominee.
Who will count the vote?
Representatives of Broadridge will tabulate the vote and act as the inspector of elections.
Where can I find the voting results of the Meeting?
We plan to publish the final voting results in a Current Report on Form 8-K (“Form 8-K”) filed within four business days of the Meeting. If final voting results are not available within the four business day timeframe, we plan to file a Form 8-K disclosing preliminary voting results within the required four business days, to be followed as soon as practicable by an amendment to the Form 8-K containing final voting results.
How are proxies solicited?
We expect to solicit proxies primarily by internet and mail, but our directors, officers, other employees and agents may also solicit proxies in person, by telephone, through electronic communication and by facsimile transmission. We will request that brokerage firms, banks, other custodians, nominees, fiduciaries and other representatives of shareholders forward the Notice of Internet Availability and, as applicable, the proxy materials and Annual Reports themselves, to the beneficial owners of our common stock. Our directors and employees do not receive additional compensation for soliciting shareholder proxies. We have retained Georgeson Inc. as our proxy solicitor for a fee estimated to be $16,500, plus reimbursement of out-of-pocket expenses.
Who will pay for the cost of soliciting proxies?
We pay all of the costs of preparing, printing and distributing our proxy materials. We will reimburse brokerage firms, banks and other representatives of shareholders for reasonable expenses incurred as defined in the NYSE schedule of charges in connection with proxy solicitations.
How can multiple shareholders sharing the same address request to receive only one set of proxy materials and other investor communications?
You may elect to receive future proxy materials, as well as other investor communications, in a single package per address. This practice, known as “householding,” is designed to reduce our paper use and printing and postage costs. To make the election, please indicate on your proxy card under “Householding Election” your consent to receive such communications in a single package per address. Once we receive your consent, we will send a single package per household until you revoke your consent or request separate copies of our proxy materials by notifying our Investor Relations Department in writing at 7601 Penn Avenue South, Richfield, MN, 55423, or by telephone at 612-291-6147. We will start sending you individual copies of proxy materials and other investor communications following receipt of your revocation.
Can I receive the proxy materials electronically?
Yes. All shareholders may access our proxy materials electronically via the internet. We encourage our shareholders to access our proxy materials via the internet because it reduces the expenses for, and the environmental impact of, our shareholder meetings. You may opt to receive paper copies of proxy materials, including our Annual Report, proxy statement and proxy card at no cost to you, by following the instructions on your Notice of Internet Availability.
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An electronic version of this proxy statement is posted on our website at www.investors.bestbuy.com.
Where can I find additional information about Best Buy?
Our reports on Forms 10-K, 10-Q and 8-K and other publicly available information should be consulted for other important information about Best Buy. You can find these reports and additional information about us on our website at www.investors.bestbuy.com.
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CORPORATE GOVERNANCE AT BEST BUY Our Board is committed to developing and implementing corporate governance principles that: (1) enable the success of our strategy and business objectives; (2) are rooted in a robust ongoing dialogue with our shareholders; and (3) are inspired by best practices. Consistent with this approach, we continue to build upon a strong framework of corporate governance practices. Shareholder perspectives play an important role in that process. Some key aspects of our current Board and governance structure and practices are as follows:
| Board Leadership & Composition
| |
| • | | | Our Board is currently led by an independent Chairman. A Lead Independent Director ensures independent oversight of management whenever our Chairman is not independent. | |
| • | | | All of our director nominees, other than the CEO, are independent. | |
| • | | | Our Board places an emphasis on diverse representation among its members. Five of our 11 director nominees are women and four of our 11 nominees are ethnically diverse. | |
| • | | | The average tenure of our director nominees is approximately 4.5 years, with a balance of skills, new perspectives and historical knowledge. | |
| • | | | All Committees are comprised exclusively of independent directors. | |
| • | | | Our directors are required to retire at the expiration of their term during which they reach the age of 72, and must tender their resignation for consideration: (a) five years after ceasing the principal career they held when they joined our Board, (b) when their principal employment, public company board membership or other material affiliation changes, and (c) if they receive less than a majority of votes cast for his or her election. | |
| Board Accountability | |
| • | | | We conduct a robust annual Board, individual director and CEO evaluation process, and periodically engage an independent third party to provide independent assessments of Board and director performance. | |
| • | | | None of our directors are involved in a material related party transaction. | |
| • | | | Our directors and officers are prohibited from hedging and pledging Company securities. | |
| • | | | Our directors and executive officers are required to comply with stock ownership guidelines. | |
| • | | | Our Board has adopted Corporate Governance Principles as part of its commitment to good governance practices. These principles are available on our website at www.investors.bestbuy.com. | |
| Shareholder Rights & Engagement | |
| • | | | We do not have a shareholder rights plan (commonly known as a “Poison Pill”). | |
| • | | | We have proxy access provisions consistent with market practice (3/3/20/20). | |
| • | | | We have no exclusive forum/venue or fee-shifting provisions. | |
| • | | | We have no cumulative voting rights and our only class of voting shares is our common stock. | |
| • | | | A shareholder(s) holding 10% of the voting shares of our stock may call a special meeting (or 25% if the special meeting relates to a business combination or change in our Board composition). | |
| • | | | We do not have supermajority shareholder vote requirements in our Articles. | |
| • | | | We regularly engage with shareholders to solicit feedback, address questions and concerns and provide perspective on Company policies and practices. | |
In this section of our proxy statement, we provide detail on specific aspects of our Corporate Governance program, policies and practices, as well as additional information on the operations and composition of our Board.
During fiscal 2021, our Board was led by our independent Chairman, Mr. Doyle. In March 2021, the Board appointed Mr. Doyle to continue his service as Chairman for fiscal 2022. Additional leadership roles continue to be filled by other directors, all of whom are independent and play an active role in our strategic planning, risk oversight and governance.
Under our Corporate Governance Principles, in circumstances where the Chairperson of the Board is not independent, the Board considers it to be useful and appropriate to designate a Lead Independent Director to coordinate the activities of the other independent directors and to perform such other duties and responsibilities as the Board may determine. Our Lead Independent Director is nominated by the Nominating, Corporate Governance
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and Public Policy Committee, and final selection is subject to ratification by the vote of a majority of the independent directors on the Board. The Lead Independent Director serves for an annual term beginning at the Board meeting following the first regular meeting of shareholders at which directors are elected.
The Board leadership duties and responsibilities are outlined below and in our Corporate Governance Principles, which are also posted online at www.investors.bestbuy.com.
Our Chairman is responsible for:
Setting the agenda for Board meetings (in partnership with the CEO) and presiding over and leading discussion at meetings of the full Board;
Presiding over the Company’s regular meeting of shareholders;
Presiding at executive sessions of independent directors, which take place at each regular Board meeting (when there is no independent Chairman, the Lead Independent Director is responsible for this duty);
Setting the Board meeting calendar and leading oversight activities of the Board;
Overseeing the Company’s strategic planning process to create alignment with the Board and management and supporting execution of the strategy;
Assisting the Board with its oversight of the Company’s risks;
Speaking on behalf of the Company to both internal and external stakeholders, as appropriate; and
Serving as the Board’s liaison to management.
In times when our Chairman is not independent, our Lead Independent Director performs the following duties:
Partners with the Chairman (and CEO) to set the Board meeting agenda;
Presides at all Board meetings at which the Chairman is not present;
Calls additional meetings of the independent directors, as appropriate;
Serves as a liaison between the independent directors and our stakeholders by being available for direct consultation and communication;
Provides ongoing counsel to the Chairman regarding key items of business and overall Board functions; and
Performs any other duties requested by the Board, the independent directors or the Chairman.
The Board seeks a wide range of experience and expertise from a variety of industries and professional disciplines in its directors. It carefully assesses the director skill sets, qualifications and diverse perspectives required to support the Company’s long-term strategic goals, and for an orderly succession and transition of directors, as evidenced by the composition changes over the past seven years. We believe our Board should be composed of individuals with highly relevant skills, independence, integrity, sound judgment, proven records of accomplishments and diverse genders, ethnicities, ages and geographic locations. In addition, the Board emphasizes independent voices and adding new perspectives to its membership. Ten of our 11 director nominees are independent, and the average tenure of our director nominees is 4.5 years. More information regarding our Director Qualification Standards and Director Nomination Process can be found within Item 1 of this proxy statement.
Pursuant to our Corporate Governance Principles, the Board has established independence standards consistent with the requirements of the SEC and NYSE. To be considered independent under the NYSE rules, the Board must affirmatively determine that a director or director nominee does not have a material relationship with us (directly, or as a partner, shareholder or officer of an organization that has a relationship with us). In addition, each member of the Compensation and Human Resources Committee must meet a standard of “enhanced independence” such that the Board must consider the source of compensation of the director and whether the director is affiliated with us or one of our subsidiaries to determine whether there are any factors that would materially affect a director’s ability to be independent, specifically in regard to their duties as a Compensation and Human Resources Committee member.
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Our Director Independence Guidelines, consistent with the NYSE rules, generally provide that no director or director nominee may be deemed independent if the director or director nominee:
—
| has in the past three years: |
received (or whose immediate family member has received as a result of service as an executive officer) more than $120,000 during any 12-month period in direct compensation from Best Buy, other than director and committee fees and certain pension payments and other deferred compensation;
been an employee of Best Buy;
had an immediate family member who was an executive officer of Best Buy;
personally worked on (or whose immediate family member has personally worked on) our audit as a partner or an employee of our internal or external auditors or independent registered public accounting firm; or
been (or whose immediate family member has been) employed as an executive officer of another company whose compensation committee at that time included a present executive officer of Best Buy; or
a partner or employee of our independent registered public accounting firm, or a director whose immediate family member is a partner of such firm or is employed by such firm and personally works on our audit; or
an employee (or has an immediate family member who is an executive officer) of another company that has made payments to Best Buy, or received payments from Best Buy, for property or services in an amount which, in any of the last three fiscal years, exceeded the greater of $1 million or 2% of such other company’s consolidated gross revenues.
Under our director independence standards described above, the Board has determined that each director who served during any part of fiscal 2021 and each director nominee is independent, with the exception of Ms. Barry, our CEO. The Board based these determinations primarily on a review of the responses of the directors to questions regarding employment and compensation history, affiliations, family and other relationships and on discussions with our directors.
As part of its independence analysis, the Board reviewed our relationships with companies with which our directors are affiliated. As part of that review, the Board considered our relationship with Nielsen, a company affiliated with Mr. Kenny. Mr. Kenny, a director since September 2013, serves as CEO and a director of Nielsen. Since 1999, Nielsen has provided us with data analytics services. The amounts we have paid to Nielsen were less than 2% of the annual consolidated gross revenues of Nielsen for each of the past three fiscal years. In addition, Mr. Kenny did not influence or participate in negotiating our agreements with Nielsen. The Board determined that the Company’s relationship with Nielsen was not material and did not impair Mr. Kenny’s independence.
Board Meetings and Attendance During fiscal 2021, the Board held four regular meetings and four special meetings. Each incumbent director attended, in person or by telephone, at least 75% of the meetings of both the Board and committees on which he or she served. Directors are required to attend our regular meetings of shareholders, and all of our director nominees that were then directors attended the 2020 Meeting either in-person or virtually.
Executive Sessions of Independent Directors Our independent directors, led by Mr. Doyle, meet in executive sessions of independent directors during each regularly scheduled Board meeting. Independent directors use these sessions as a forum for open discussion about the Company, our senior management, and any other matters they deem appropriate.
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The Board has four committees: Audit, Compensation and Human Resources (the “Compensation Committee”), Finance and Investment Policy, and Nominating, Corporate Governance and Public Policy (the “Nominating Committee”). The charters for each committee are posted on our website at www.investors.bestbuy.com. The charters are reviewed annually and include information regarding each committee’s composition, purpose and responsibilities.
The Board has determined that all members of the Audit Committee, Compensation Committee and Nominating Committee are independent as defined under the SEC and NYSE rules. The Board has also determined that, during fiscal 2021, three of the five members of the Audit Committee qualified as audit committee financial experts under SEC rules, and that each of the members of the Audit Committee has accounting and related financial management expertise in accordance with the NYSE listing standards.
The key responsibilities, fiscal 2021 membership and number of meetings held in fiscal 2021 for each committee are set forth below:
| Audit | | | • | | | Assists the Board in its oversight of: | | | Thomas L.
Millner*†
J. Patrick
Doyle†
Karen A.
McLoughlin†
Claudia F.
Munce
Richelle P.
Parham | | | 10 | |
| | | | • | | | the integrity of our financial statements and financial reporting processes; | |
| | | | • | | | our internal accounting systems and financial and operational controls; | |
| | | | • | | | the qualifications and independence of our independent registered public accounting firm; | |
| | | | • | | | the performance of our internal audit function and our independent registered public accounting firm; and | |
| | | | • | | | our legal compliance and ethics programs, including our legal, regulatory and risk oversight requirements, and the major risks facing the Company (including risks related to finance, operations, privacy and cyber-security), related party transactions and our Code of Ethics. | |
| • | | | Is responsible for the preparation of a report as required by the SEC to be included in this proxy statement. | |
| Compensation & Human Resources | | | • | | | Determines executive officer compensation and executive officer and director compensation philosophies, evaluates the performance of our CEO, approves CEO and executive officer compensation, and oversees preparation of a report as required by the SEC to be included in this proxy statement. | | | David W.
Kenny*
Lisa M.
Caputo
Eugene A.
Woods | | | 5 | |
| • | | | Reviews and recommends director compensation for Board approval. | |
| • | | | Is responsible for succession planning and compensation-related risk oversight. | |
| • | | | Approves and oversees the development and evaluation of equity-based and other incentive compensation and certain other employee benefit plans. | |
| • | | | Oversees the development of an inclusive and diverse Company culture. | |
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| Finance & Investment Policy | | | • | | | Provides oversight of, and advises the Board regarding, our financial policies and financial condition to help enable us to achieve our long-range goals. | | | Karen A.
McLoughlin*
Claudia F.
Munce
Eugene A. Woods | | | 8 | |
| • | | | Oversees, evaluates and monitors the: (i) protection and safety of our cash and investments; (ii) achievement of reasonable returns on financial assets within acceptable risk tolerance; (iii) maintenance of adequate liquidity to support our activities; (iv) assessment of the cost and availability of capital; and (v) alignment of our strategic goals and financial resources. | |
| | |
| • | | | Is responsible for approving certain significant contractual obligations. | |
| Nominating, Corporate Governance & Public Policy | | | • | | | Identifies and recommends director nominees, reviews and recommends corporate governance principles to the Board, and oversees the evaluation of the performance of the Board and its committees. | | | Lisa M.
Caputo
David W.
Kenny
Thomas L.
Millner
Richelle P.
Parham | | | 4 | |
| • | | | Assists the Board with general corporate governance, including Board organization, membership, training and evaluation. | |
| • | | | Oversees public policy, corporate responsibility and related environmental, social and governance matters. | |
Effective March 18, 2021, the Board approved changes to committee membership as set forth below:
| Audit | | | Thomas L. Millner*†
Mario J. Marte†
Karen A. McLoughlin†
Claudia F. Munce
Steven E. Rendle | |
| Compensation & Human Resources | | | David W. Kenny*
Lisa M. Caputo J. Patrick Doyle, Russell
Richelle P. Fradin, Kathy J. Higgins Victor, Hubert Joly, Parham
Eugene A. Woods | |
| Finance & Investment Policy | | | Karen A. McLoughlin*
Claudia F. Munce
Steven E. Rendle
Eugene A. Woods | |
| Nominating, Corporate Governance & Public Policy | | | Lisa M. Caputo*
David W. Kenny Karen A. McLoughlin,
Mario J. Marte
Thomas L. Millner Claudia F. Munce and Gérard R. Vittecoq for a term of one year. All of the nominees are current members of the Board.
| |
†
| Designated as an “audit committee financial expert” |
Director Nominees | | | | | | | | | | | | |
The biographies of each of the nominees include information regarding the person's
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In addition to its responsibilities as set forth above, the Board and its committees take an active role in the oversight of various risks to the Company. These risk oversight responsibilities are set forth below.
In fiscal 2020, a management risk committee comprised of the CEO and her direct reports was formed to assess and align on top risks faced by the Company. Management also adopted a value-based risk model to enable consistent evaluation of risks and opportunities across the organization. The Audit Committee oversees management’s processes to identify and quantify the material risks that we face. Our Chief Compliance Officer is a direct liaison to the Audit Committee on our risk oversight processes and procedures. In connection with its risk oversight role, the Audit Committee meets privately with representatives of our independent registered public accounting firm, the Chief Risk Officer, the Chief Compliance Officer, our internal audit staff and our legal staff. Our internal audit staff, which reports directly to the Audit Committee at least quarterly, assist management in identifying, evaluating and implementing controls and procedures to address identified risks.
ESG Risk Oversight. Given the depth and breadth of risks relating to environmental, social and governance (“ESG”) matters, including with respect to inclusion, equity and diversity, we share responsibility for such risks across the entire Board and all of its committees, leveraging the risk oversight expertise of each Board committee based on subject matter.
The Audit Committee plays a significant role in the oversight of our ESG risks related to compliance, including ethics and environmental and safety audits. It receives regular updates on the Company’s cyber security programs, assessment of cyber threats and defenses and customer privacy protection initiatives.
The Compensation Committee oversees the Company’s human capital management and inclusion and diversity-related risks through a rigorous regular review of the Company’s strategies and programs. This includes overall
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employee wellness and engagement in these areas, employee benefit plan compliance, leadership succession planning, and wage, retention and hiring programs. The Committee also works closely with the Company’s Chief Inclusion, Diversity and Talent Officer to assess the effectiveness of such programs in alignment with the Company’s core values. In 2020, the Board approved changes to the Compensation Committee’s charter to reflect its oversight of the Company’s development and maintenance of an inclusive and diverse culture.
The Finance & Investment Policy Committee focuses on the risks of the Company’s ESG-related financial investments and commitments, such as our recent solar energy investment. The Committee reviews the financial risks and projected outcomes to ensure such investments align with our ESG objectives.
The Nominating Committee manages its oversight of the Company’s governance, ESG strategy and ESG reputational risks by way of quarterly discussions with management and regular quarterly updates of our environmental goals and progress, social responsibility programs and initiatives, and public policy positions and advocacy.
The Board oversees ESG risks as part of its oversight of our business, strategy and enterprise risk management. Each committee provides an update to the full Board on matters discussed and reviewed in its meeting held prior to the Board meeting, including with respect to ESG risks. In addition, our Board has a dedicated annual strategic planning meeting with senior management and receives quarterly strategic updates, where topics relating to ESG matters, such as inclusion and diversity goals, customer strategy, human capital strategy and safety goals are discussed. The Board reviews these topics and their related risks to ensure that they advance the Company’s strategy. Finally, the Board Chair, the CEO and the Chairs of each Board Committee meet separately to review changes in the Company’s enterprise risk portfolio, including changes to ESG risks, and discuss any additional Board or management action needed to help oversee and manage these risks.
Compensation Risk Assessment In connection with their oversight of compensation-related risks, Compensation Committee members annually review the most important enterprise risks to ensure that compensation programs do not encourage risk-taking that is reasonably likely to have a material adverse effect on us. As in past years, the review process in fiscal 2021 identified our existing risk management framework and the key business risks that may materially affect us, reviewed our compensation plans and identified those plans that are most likely to impact these risks or introduce new risks, and balanced these risks against existing processes and compensation program safeguards. The review process also took into account mitigating features contained within our compensation plan design, which includes elements such as: metric-based pay, time-matching performance periods, payment for outputs, goal diversification, stock ownership guidelines, payment caps, and our clawback policy.
The Compensation Committee also considered additional controls outside of compensation plan design which contribute to risk mitigation, including the independence of our performance measurement teams and our internal control environment.
Based upon the process we employed, the Compensation Committee determined that our compensation programs do not encourage risk-taking that is reasonably likely to result in a material adverse effect on the Company.
Our Nominating Committee oversees the Board’s composition, effectiveness, accountability and evaluation of the performance of the Board, its committees and individual directors. On an annual basis, members of the Board complete a questionnaire evaluating the performance of the Board as a whole, each member’s respective committee and the performance of the Chairman and Lead Independent Director (if one has been appointed). Directors are asked about roles and responsibilities, as well as more general performance-related questions. The Nominating Committee reviews the results of these questionnaires and determines whether the results warrant any action. The results and any proposed actions are then shared with the full Board for further discussion and approval of final action plans.
The Chair of our Nominating Committee and the Board Chairman also review each individual director’s contributions to the Board during the past year and his or her performance against the director qualification standards and Board needs. The Nominating Committee also annually reviews the skills and qualifications of each Board member and the strategic goals of the Company to determine whether the skill sets of the individual directors on the Board continue
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to support the Company’s long-term strategic goals. This process is utilized by the Nominating Committee to assess whether a director should continue to serve on the Board and stand for re-election at the next Regular Meeting of Shareholders and to otherwise address Board composition needs.
In addition to the annual evaluation process, the Nominating Committee engaged an independent third-party consultant in fiscal 2017 and again in fiscal 2020 to conduct individual interviews with each director and certain senior executives and perform a comprehensive analysis of the Board’s overall effectiveness. The Committee anticipates utilizing this approach periodically to obtain independent assessments of the Board’s performance, with the next assessment to take place in fiscal 2023.
Our Compensation Committee conducts a robust annual CEO evaluation process, consisting of both a performance review and a compensation analysis. The performance evaluation component includes an assessment of the Company’s performance in light of set objectives, personal interviews with the individual Board members and the CEO’s direct reports, and feedback evaluations provided by several individuals who interact with the CEO. Separately, the Compensation Committee’s compensation consultant conducts extensive market research. CEO compensation market data is collected from Fortune 100 companies, our peer group, and a retail-industry focused subset of our peer group to ensure both market competitiveness and appropriateness of our CEO’s compensation relative to her peers. The Compensation Committee’s independent consultant reviews the market data and provides its recommendations to the Compensation Committee. Once all of the relevant performance and compensation data has been collected, the Compensation Committee meets in executive session to discuss the CEO performance evaluation results and CEO compensation. After reviewing all of the collected data regarding performance, the Compensation Committee makes its decision regarding CEO compensation for the forthcoming year. The Compensation Committee then provides its final assessment on CEO performance and decision regarding CEO compensation to the Board for discussion during executive session. Our CEO abstains from participating in all related discussions of the Compensation Committee and Board prior to delivery of the final assessment.
Director Orientation and Continuing Education Our Nominating Committee oversees the orientation and continuing education of our directors. Director orientation familiarizes directors with our strategic plans, significant financial, accounting and risk management issues, compliance programs, policies, principal officers, internal auditors and our independent registered public accounting firm. The orientation also addresses Board procedures, director responsibilities, our Corporate Governance Principles and our Board committee charters. Each of our new directors attended a director orientation following their appointment.
We also offer continuing education programs and provide opportunities to attend commercial director education seminars outside of the Company to assist our directors in maintaining their expertise in areas related to the work of the Board and the directors’ committee assignments.
In fiscal 2021, the Board conducted its annual continuing education seminar for the full Board in September 2020, focusing on inclusion and diversity.
Anti-Hedging and Anti-Pledging Policies Our executive officers and Board members are prohibited from pledging Company securities as collateral for a loan or from holding Company securities in a margin account. In addition, all employees and Board members are prohibited from hedging Company securities, including by way of forward contracts, equity swaps, collars, exchange funds or otherwise.
Our stock ownership guidelines require each of our non-management directors to own 10,000 shares and to hold 50% of their granted equity until that ownership target is met. Directors are required to hold all restricted stock units granted to them during their Board tenure until their service on the Board ends. In fiscal 2021, all of our non-management directors were in compliance with the ownership guidelines. Our stock ownership guidelines for executive officers are discussed in the Executive and Director Compensation — Compensation Discussion and Analysis — Executive Compensation Elements — Other Compensation section.
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A key part of our corporate governance program is our annual shareholder engagement process. We regularly engage with our shareholders on a variety of topics throughout the year to ensure we are addressing their questions and concerns, to seek input and to provide perspective on Company policies and practices. Our typical engagement follows a seasonal cycle, as outlined below.
We have taken several actions in prior years in consideration of shareholder feedback elicited during this process, including: the elimination of the supermajority shareholder vote requirements in our Articles, adoption of proxy access, declassification of our Board, the determination to hold the advisory vote on our executive compensation on an annual basis, adjustments to the director appointments on our Board committees, and the development of our corporate social responsibility program and reporting. We also continue to facilitate direct shareholder communication with management and members of our Board and the ability to easily access and obtain information regarding our Company on our website at www.investors.bestbuy.com. Please see the Executive and Director Compensation — Introduction section for more information regarding actions taken as a result of shareholder feedback received regarding our prior year’s executive compensation decisions.
Environment, Social & Governance We strive to be a good corporate citizen in all of our interactions with stakeholders, including customers, employees, vendor partners, shareholders, the environment and communities in which we operate. Here are a number of ways that we reflect this approach in the management of the Company’s corporate responsibility initiatives:
Company Strategy. We have anchored our strategy around a clear purpose of enriching people’s lives through technology. We believe that having our employees focused on our Company’s purpose and finding ways to connect it to their individual purpose is a key driver of both performance and sustainability.
COVID-19 Safety Response. In response to the pandemic, the safety of our employees and customers became a top priority. We proactively closed stores at the beginning of the pandemic and then implemented a contactless, curbside-only operating model, and we continue to offer curbside pickup at most stores today. When customers
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returned to shopping in our stores, we instituted a variety of safety procedures to keep our employees and customers safe, including requiring the use of face coverings, requiring employees to complete daily wellness checks and implementing frequent cleaning protocols. We are also limiting the number of customers inside our stores to allow for social distancing.
Environmental Sustainability. We continue our leadership role in addressing climate change. We have achieved significant progress toward our carbon emissions reduction goal of 75% by 2030 (over a 2009 baseline), from both operational reductions and renewable sourcing. In fiscal 2021 we joined other leading companies by signing The Climate Pledge, committing to be carbon neutral across our operations by 2040 – a decade earlier than our previous goal of 2050. We also made our second investment in solar energy that is expected to produce 480,000 MWh of clean electricity per year.
We also have a goal to help our customers reduce carbon emissions by 20% by 2030 (over a 2017 baseline), which we estimate will save them $5 billion on utility bills by putting greater emphasis on ENERGY STAR® electronics, appliances and other energy saving devices.
We continue to drive the circular economy forward by influencing the sustainable design and material sourcing for products and packaging, providing product repair and trade-ins, responsibly recycling, and reducing waste in our operations and for our customers. In fiscal 2021, we collected more than 161 million pounds of consumer electronics and appliances for recycling in fiscal 2021, bringing our total to more than 2 billion pounds.
Social Impact. We are committed to supporting teens from underinvested communities in building brighter futures through technology, training and mentorship. The primary way we do this is through our network of Best Buy Teen Tech Centers, places where teens can develop critical skills through hands-on activities that explore their interests in a variety of areas, such as software engineering, filmmaking, 3D design and music production. Teens gain exposure to new career possibilities and benefit from positive adult and peer relationships. Together with our partners, we are building a network of at least 100 Best Buy Teen Tech Centers, which we estimate will reach 30,000 teens annually. We accelerated our progress towards this goal by making a $40 million donation to the Best Buy Foundation in the third quarter of fiscal 2021. We are currently serving teens at 35 Best Buy Teen Tech Centers.
In fiscal 2021, we committed to provide $44 million by 2025 to expand college preparation and career opportunities for Black, Indigenous and People of Color (“BIPOC”) students, including adding 16 scholarships for Historically Black Colleges and Universities students and increasing scholarship funding for Best Buy Teen Tech Center youth. We are a founding member of ConnectedMN, a public-private partnership helping underinvested communities across the State of Minnesota get access to the Internet and devices to facilitate distance learning as well as critical support services.
Human Rights. We are also committed to respecting and advancing human rights through our alignment with the United Nations Guiding Principles on Business and Human Rights. Further, across all of the products and services we procure, we seek to mitigate risk, enhance the partnership with our suppliers and create value for all stakeholders through our Responsible Supply Chain Program. We are active members of the Responsible Business Alliance, which allows us to partner with many of the brands we sell, including Apple, Intel, Microsoft and Samsung. Collectively, we embrace a common Supplier Code of Conduct and audit methodology that creates business value by improving working and environmental conditions in the supply chain. In fiscal 2021, we expanded our Responsible Supply Chain Program from our private label manufacturing to our branded vendors, starting with a pilot group.
Inclusion and Diversity. We believe in maintaining a supportive and inclusive culture that values everyone’s talents, life experiences and backgrounds. In fiscal 2021, we committed to making systemic, permanent changes that address social injustices to improve our Company and our communities.
We are proud of the diversity within our Board of Directors, comprised of 45% female directors and 36% of directors who are People of Color as of March 18, 2021.
We are committed to filling one out of three new, non-hourly corporate positions with BIPOC (specifically Black, Latinx and Indigenous) employees.
We are also committed to filling one out of three new, non-hourly field roles with women.
In the next two years, our Digital and Technology team committed to hiring 1,000 new employees, of which we commit 30% will be BIPOC or female employees.
We are focused on taking steps to foster inclusion among all employee groups to create parity in retention rates, including transforming the composition of our senior leadership teams to be more in line with our Board of Directors.
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The Compensation Committee has committed a portion of each of its regular meetings to focus on the Company’s inclusion and diversity efforts, supported by ongoing dialog with our Chief Inclusion, Diversity and Talent Officer.
Following collaboration with our stakeholders through our shareholder engagement process, we have committed to disclosing our EEO-1 Consolidated Report in our fiscal 2021 ESG Report, to be published in June.
Employee Benefits. We are committed to taking care of our employees and rewarding them for their hard work and dedication through a competitive rewards package of pay, benefits, discounts and opportunities. Our benefits package focuses on total employee well-being: physical, mental, financial and social.
In fiscal 2021, we increased the starting hourly wage for all domestic employees to $15 per hour. And, to improve on pay predictability, a 4% increase in hourly rate replaced short-term incentive compensation for hourly store employees below the leadership level.
In support of the changing lives of our employees due to COVID-19, we enhanced our employee benefits package to include 100% coverage of COVID-related health care expenses, expanded caregiver leave, additional support for backup childcare, tutoring reimbursement and access to physical and mental health virtual visits.
Employee Training and Development. Investing in our employees’ learning and development is a priority at Best Buy. Our learning and development experience combines instructor-led classes and interactive online modules, along with one-on-one mentoring and coaching. In fiscal 2021, our employees each received an average of 40 hours of training and we successfully transitioned all meetings and events to virtual environments due to COVID-19 restrictions.
As a major corporation and corporate citizen, we believe that it is important to work with policymakers on issues impacting our customers, employees, operations, shareholders and communities. We know that collaboration helps bring about change that better serves our industry and the communities where we live and work. In fiscal 2021, our public policy priorities included: COVID relief / economic recovery; tax; trade; workforce; fair competition; immigration; infrastructure; privacy; and social justice. More information about these priorities, as well as our annual political activity reports and related policies, can be found at https://corporate.bestbuy.com under “Government Affairs.”
Communications with the Board Anyone who wishes to contact the Board, any individual director, or the independent directors as a group, are welcome to do so in writing, addressed to such person(s) in care of:
Mr. Todd G. Hartman
General Counsel,
Chief Risk Officer and Secretary
Best Buy Co., Inc.
7601 Penn Avenue South
Richfield, Minnesota 55423
Mr. Hartman will forward all written correspondence to the appropriate director(s), except for spam, junk mail, mass mailings, customer complaints or inquiries, job inquiries, surveys, business solicitations or advertisements, or patently offensive or otherwise inappropriate material. Mr. Hartman may, at his discretion, forward certain correspondence, such as customer-related inquiries, elsewhere within the Company for review and possible response. Comments or questions regarding our accounting, internal controls or auditing matters will be referred to the Audit Committee. Comments or questions regarding the nomination of directors and other corporate governance matters will be referred to the Nominating Committee. Comments or questions regarding executive compensation will be referred to the Compensation Committee.
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Corporate Governance Website If you would like additional information about our corporate governance practices, you may view the following documents at www.investors.bestbuy.com under “Corporate Governance”.
Amended and Restated Articles of Incorporation
Amended and Restated By-laws
Corporate Governance Principles
Audit Committee Charter
Compensation and Human Resources Committee Charter
Finance and Investment Policy Committee Charter
Nominating, Corporate Governance and Public Policy Committee Charter
Code of Ethics
Best Buy Co., Inc. 2020 Omnibus Incentive Plan
Policy for Shareholder Nomination of Candidates to Become Directors of the Company
Process for Communication with the Board
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ITEM OF BUSINESS NO. 1 — ELECTION OF DIRECTORS Our By-laws provide that our Board consist of one or more directors and that the number of directors may be increased or decreased from time to time by the affirmative vote of a majority of the directors serving at the time that the action is taken. The number of directors on our Board is reviewed and set by our Board no less often than annually. In March 2021, the Board set the number of directors at eleven. The Board will continue to evaluate the size of the Board and make adjustments as needed to meet the current and future needs of the Company.
Director Nomination Process The Nominating Committee is responsible for screening and recommending to the full Board director candidates for nomination. When the Board and its Nominating Committee determines that a director nomination or search is necessary, the process is robust, thorough and deliberate.
Mr. Marte, who was appointed by the Board in January 2021, and Mr. Rendle, who was appointed by the Board in March 2021, were recommended to the Nominating Committee by a third-party search firm as part of the Nominating Committee’s director search. After reviewing each of Mr. Marte and Mr. Rendle’s qualifications, meeting with each several times and discussing his potential nomination, the Nominating Committee voted unanimously to recommend both Mr. Marte and Mr. Rendle to the Board, which unanimously approved each appointment.
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The Nominating Committee will consider director candidates nominated by shareholders. Shareholder nominations must be accompanied by a candidate resume that addresses the extent to which the nominee meets the director qualification standards and any additional search criteria posted on our website. Nominations will be considered only if we are then seeking to fill an open director position. All nominations by shareholders should be submitted as follows:
Chair, Nominating, Corporate Governance and Public Policy Committee
c/o Mr. Todd G. Hartman
General Counsel,
Chief Risk Officer and Secretary
Best Buy Co., Inc.
7601 Penn Avenue South
Richfield, Minnesota 55423
Advance Notice and Proxy Access By-Law Provisions Our By-laws establish advance notice procedures with respect to shareholder proposals and the nomination of candidates for election as directors and the proposal of any business not intended to be included in our proxy statement, other than nominations made by or at the direction of the board of directors or a committee of the board of directors. In order for any matter to be “properly brought” before a meeting, a shareholder must comply with advance notice requirements and provide us with certain information. Generally, to be timely, a shareholder’s notice must be received at our principal executive offices not less than 120 days nor more than 150 days prior to the anniversary of the immediately preceding annual meeting of shareholders. The By-laws also specify requirements as to the form and content of a shareholder’s notice.
In addition to the director nomination provisions described above, the By-laws contain a “proxy access” provision that provides that any shareholder or group of up to twenty shareholders who qualify as an eligible shareholder under the proxy access provisions of our By-laws may nominate and include in our proxy materials director candidates constituting up to 20% of our board of directors or two directors, whichever is greater. In order for a shareholder or group of shareholders to be eligible under the proxy access provisions of our By-laws to nominate a director, such shareholder or group of shareholders must, among other criteria, be eligible to vote at the Company’s annual meeting and have owned or together with other group shareholders owned 3% or more of the voting power of our issued and outstanding common stock continuously for at least three years. In order to use the proxy access provisions of our By-laws, shareholders and their nominees must satisfy all the eligibility and notice requirements specified in our By-laws. A shareholder proposing to nominate a person for election to our board of directors through the proxy access provision must provide us with a notice requesting the inclusion of the director nominee in our proxy materials and other required information not less than 120 days nor more than 150 days prior to the first anniversary of the date on which our definitive proxy statement was released to shareholders in connection with the prior year’s annual meeting. The complete proxy access provisions for director nominations are set forth in the By-laws.
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Director Qualification Standards In seeking new board members, our objective is to identify and retain directors that can effectively develop the Company’s strategy and oversee management’s execution of that strategy. We only consider director candidates who embody the highest standards of personal and professional integrity and ethics and are committed to a culture of transparency and open communication at the Board level and throughout the Company. Successful candidates are dedicated to accountability and continuous improvement with a belief in innovation as a key business success factor. They are also actively engaged and have an innate intellectual curiosity and entrepreneurial spirit.
As part of its annual evaluation process for director nominees, the Nominating Committee considers other criteria, including the candidate’s history of achievement and superior standards, ability to think strategically, willingness to share examples based upon experience, policy-making experience, and ability to articulate a point of view, take tough positions and constructively challenge management. Directors must also be committed to actively engaging in their Board roles, with sufficient time to carry out the duties of Board and Board committee membership. Finally, one or more of our directors must possess the education or experience required to qualify as an “audit committee financial expert” pursuant to SEC rules.
Our Corporate Governance Principles describe our policy of considering diversity in the director identification and nomination process. When considering Board candidates, the Nominating Committee seeks nominees with a broad range of experience from a variety of industries and professional disciplines, such as finance, professional services and technology, along with a diversity of gender, ethnicity, age and geographic location. The Nominating Committee does not assign specific weights to particular criteria, and no particular criterion is necessarily applied to all prospective nominees. As part of its annual review of the Board’s composition and director nominees, the Nominating Committee assesses the effectiveness of its approach to diversity. When the Nominating Committee identifies an area of which the Board may benefit from greater representation, it may focus its candidate search on particular experience, background or diversity characteristics, including gender, ethnic and geographical attributes. The Board believes that diversity in the backgrounds and qualifications of Board members ensures the mix of experience, knowledge and abilities necessary for the Board to fulfill its responsibilities and leads to a more effective oversight and decision-making process.
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The grid below summarizes the key qualifications and skills each of our director nominees possess that were most relevant to the decision to nominate him or her to serve on the Board. The lack of a mark does not mean the director does not possess that qualification or skill; rather a mark indicates a specific area of focus or expertise on which the Board relies most heavily. Each director’s biography describes these qualifications and relevant experience in more detail.
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Director Nominees (Ages and Committee roles as of May 5, 2021) The biographies of each of the nominees include information regarding the person’s service as a director, business experience, public company director positions held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings during the last ten years, if any, and the key experiences, qualifications, attributes or skills that led the Nominating Committee and the Board to determine that the person should serve as a director.
There are no family relationships among the nominees or between any nominee and any director, executive officer or person chosen to become an executive officer. There are also no material proceedings to which any director, officer, affiliate of the Company, any 5% shareholder or any associate is a party adverse to the Company or its subsidiaries or has a material interest adverse to the Company or its subsidiaries.
| | | Corie S. Barry
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| Age: 46
| | | Committees:
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| Director Nominees:Since: June 2019 | | | (Ages and Committee roles as of May 3, 2016)None
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| | | | | | | | | | | | | | Lisa M. Caputo | Best Buy Committees: | Other For-Profit Directorships (*Public Company) | Age: 52
| | l | Compensation & Human Resources Committee | | | None | Director Since: | | l | Nominating, Corporate Governance & Public Policy Committee | | | | December 2009 | | | | | | | | | | | | | | | | | | | | |
| | | | Background: Executive Vice President and Chief Marketing and Communications Officer of The Travelers Companies, Inc., a property casualty insurer (2011-present); Managing Director and Senior Banker of theOther Public Sector Group of the Institutional Clients Group of Citigroup, Inc., a financial services company (2010-2011); Global Chief Marketing Officer and Executive Vice President of Citigroup, Inc. (2007-2010); Founder, Chairman and Chief Executive Officer of Citi’s Women & Co., a membership service that provides financial education and services for women (2000-2011).
What she brings to the Board: Ms. Caputo’s position as Executive Vice President of Marketing and Communications of The Travelers Companies makes her critical to Best Buy’s efforts to broaden its brand, rejuvenate the customer experience and transform its marketing efforts from analog and mass to digital and personal. She also spent 11 years at Citigroup, advising three chief executive officers on topics from marketing and communications to government affairs and community relations. Ms. Caputo has an exceptional track record of enhancing corporate social responsibility and employee engagement, key components of Best Buy’s Renew Blue initiative. She has also been a senior executive at the Walt Disney Company and at the CBS Corporation, and spent more than a decade in the public sector, serving as Deputy Assistant to President Bill Clinton and Press Secretary to First Lady Hillary Rodham Clinton. Ms. Caputo’s diverse public/private background lends an important voice to the Board deliberations, particularly those that involve the Company’s efforts to communicate with customers.Directorships:
Education: Ms. Caputo holds degrees from Brown University and Northwestern University.
| | | | | | • | | | | | | | | | | | | J. Patrick Doyle | Best Buy Committees: | Other For-Profit Directorships (*Public Company) | | | | Age: 52
| | l | Audit Committee | | l | Domino's Pizza, Inc.* | | Director Since: | | l | Finance and Investment Policy Committee | | | | | October 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Background: President and CEO of Domino’s Pizza, Inc., the second-largest pizza company in the world (2010-present); President of Domino’s Pizza (2007-present); Executive Vice President of Team U.S.A. at Domino’s Pizza (2004-2007); Executive Vice President of Domino’s Pizza International (1999-2004); Senior Vice President of Marketing for Domino’s Pizza (1997-1999)
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Current Role:
Chief Executive Officer (2019-present), Best Buy Co., Inc.
Prior Roles:
Chief Financial Officer (2016-2019) & Strategic Transformation Officer (2018-2019), Best Buy Co., Inc.;
Chief Strategic Growth Officer & interim President, Services, Best Buy Co., Inc. (2015-2016);
Senior Vice President, Domestic Finance, Best Buy Co., Inc. (2013-2015);
Vice President, Chief Financial Officer & Business Development, Home Business Group, Best Buy Co., Inc. (2012-2013); and
Vice President, Finance – Home Customer Solutions Group, Best Buy Co., Inc. (2010-2012).
Education: Ms. Barry holds degrees from the College of St. Benedict.
Key Qualifications & Experience:
Growth/Transformation Experience - As Best Buy’s Chief Executive Officer and a key member of the Best Buy executive team prior to her CEO appointment, Ms. Barry has played a critical role in the Company’s successful Renew Blue transformation and in developing and executing the proven growth strategy in place today. She has led Best Buy’s strategic transformation and growth efforts, including the launch of its In-Home Consultation program and its expansion in the health space. Ms. Barry has a demonstrated track record of advocating for and mentoring women in the workplace and in the community through her close involvement with the Company’s women’s development group, local women’s leadership organizations and her alma mater.
Finance Expertise - As Best Buy’s Chief Financial Officer from 2016 to 2019, Ms. Barry brings strong financial acumen to the board. She previously served in a variety of financial and operational roles within the Company, including Senior Vice President of Domestic Finance. Prior to joining Best Buy in 1999, she worked at Deloitte & Touche.
Knowledge of Best Buy and/or Industry - As Best Buy’s CEO since 2019, Ms. Barry has a deep knowledge of the Company, its business partners and the broader industry in which it competes. She has worked at the Company for over 20 years across a wide variety of roles, both in the field and at the corporate office.
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| | | Lisa M. Caputo | | | | | | | | | | |
| Age: What he brings to the Board: 57 | | | Committees: | |
| Director Since: Having led a remarkable transformation at Domino’s Pizza, Inc., Mr. Doyle’s experience and insights are valuable to the Board of Directors and senior managementDecember 2009 | | | | | | • | | | Compensation Committee | |
| | | | ✔ | | | Independent | | | | | | • | | | Nominating Committee (Chair) | |
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| | | | Other Public Company Directorships: | |
| | | | | | | | | | None
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Current Role:
Executive Vice President of Marketing, Communications and Customer Experience of The Travelers Companies, Inc., a property casualty insurer (2011-present)
Prior Roles:
Managing Director and Senior Banker of the Public Sector Group of the Institutional Clients Group of Citigroup, Inc., a financial services company (2010-2011);
Global Chief Marketing Officer and Executive Vice President of Citigroup, Inc. (2007-2010);
Chief Marketing and Community Relations Officer, Global Consumer Group, Citigroup, Inc. (2005-2007); and
Founder, Chairman and Chief Executive Officer of Citi’s Women & Co., a membership service that provides financial education and services for women (2000-2011).
Education: Ms. Caputo holds degrees from Brown University and Northwestern University.
Key Qualifications & Experience:
Marketing / Customer Experience Expertise - Ms. Caputo’s position as Executive Vice President of Marketing, Communications and Customer Experience of The Travelers Companies, Inc., makes her invaluable to Best Buy’s efforts to broaden its brand, rejuvenate the customer experience and transform its marketing and communications efforts to drive growth. In addition, her perspective gained from driving innovation efforts to explore partnership and investment opportunities at Travelers is helpful as we develop growth initiatives within the Company’s Building the New Blue strategy. Ms. Caputo also spent 11 years at Citigroup, advising three CEOs on topics from marketing and communications to government affairs and community relations.
Environmental, Social & Governance Expertise - Ms. Caputo has an exceptional track record throughout her career of enhancing community and employee engagement, building social impact strategies and leading corporate responsibility and sustainability.
Corporate Public Affairs Expertise - Ms. Caputo has also been a senior executive at Walt Disney Co. and CBS Corp., and she spent more than a decade in the public sector, serving as Deputy Assistant to President Bill Clinton and Press Secretary to First Lady Hillary Rodham Clinton. Her diverse public/private background lends an important voice to Board deliberations, particularly those that involve the Company’s government relations and communications efforts.
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| | | J. Patrick Doyle | | | | | | | | | | |
| Age: 57 | | | Committees: | |
| Director Since: October 2014 | | | None currently, but as Best Buy is in the midst of a similar effort. His experience rebuilding Domino’s reputation among consumers is a great benefit to Best Buy, particularly in its Renew Blue marketing initiatives. UnderChairman, Mr. Doyle Domino’s significantly grew its digital presence, with online orders now accounting for 40 percent of U.S. sales. That expertise supports Best Buy’s continued work in meeting customers where, how and when they want to shop — in store or online — and its goal of increasing its online market share. Mr. Doyle previouslyattends most committee meetings as an ex-officio member. He also served on the boardAudit Committee during a portion of directors of G&K Services,fiscal 2021. | |
| | | | ✔ | | | Independent | |
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| Chairman | | | Other Public Company Directorships: | |
| | | | | | | | | | None | |
Current Role:
Executive Partner at The Carlyle Group, one of the world’s largest investment firms (2019 – present)
Prior Roles:
President and CEO of Domino’s Pizza, Inc., the largest pizza restaurant chain in the world (2010-2018);
President of Domino’s Pizza (2007-2018);
Executive Vice President of Team U.S.A. at Domino’s Pizza (2004-2007); and
Executive Vice President of Domino’s Pizza International (1999-2004).
Education: Mr. Doyle holds degrees from The University of Chicago Booth School of Business and The University of Michigan.
Key Qualifications & Experience:
CEO Experience - Mr. Doyle served as Chief Executive Officer of Domino’s Pizza, Inc, from 2010 to 2018. Prior to that, he held a variety of other senior leadership roles at Domino’s.
Digital / E-Commerce Expertise - Under Mr. Doyle’s leadership, Domino’s significantly enhanced its multichannel presence, with digital channels now accounting for 60% of U.S. orders. That expertise supports Best Buy’s goal of increasing its online market share.
Growth / Transformation Experience - Mr. Doyle led a remarkable transformation at Domino’s, rebuilding the company’s reputation among consumers and more than doubling its global retail sales from $5.5 billion in 2008 to $13.5 billion in 2018. During Domino’s transformation, Mr. Doyle increased the company’s contributions to communities and disaster relief and initiated a partnership to support students interested in careers in agriculture. In his current role at The Carlyle Group, Mr. Doyle leads a partnership to acquire established companies that have the opportunity for value creation and revenue growth through technological transformation.
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Education: Mr. Doyle holds degrees from The University of Chicago Booth School of Business and from the University of Michigan.
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| | | | | | | | | | | | Russell P. Fradin | Best Buy Committees: | Other For-Profit Directorships (*Public Company) | | Age: 60
| | l | Compensation & Human Resources Committee (Chair) | | | None | | Director Since: | | | | | | April 2013 | | | | | | | | Appointed Lead Independent Director in June 2015 | |
Background: Operating Partner at Clayton, Dubilier, & Rice, a private investment firm (April 2016-present); Chief Executive Officer and President of SunGard, a leading software and technology services company now acquired by Fidelity National Information Services, Inc. (2011-2015); Chairman and Chief Executive Officer of AonHewitt, a global provider of human resources consulting and outsourcing solutions (2010-2011); Chief Executive Officer of Hewitt Associates (2006-2010); President and Chief Executive Officer of The BISYS Group, Inc., a provider of outsourcing solutions for the financial services sector (2004-2006).
What he brings to the Board: With experience as both a CEO and an executive board chair, Mr. Fradin is well suited to be Best Buy’s Lead Independent Director. He has firsthand insight into the partnership between an engaged Board and an effective, high-performing management team. In his role as a director, Mr. Fradin offers Best Buy the benefit of a 20-year career leading some of the country’s top services businesses, including more than a decade in a CEO role. This experience is of particular value given the Company’s emphasis on rejuvenating its services business as part of its Renew Blue transformation efforts. Additionally, Mr. Fradin’s previous leadership of Hewitt Associates and, ultimately, AonHewitt, allows him to offer valuable advice on issues that include streamlining operations, reducing costs, and establishing appropriate executive compensation. Earlier in his career, Mr. Fradin ran the Global Employer Services business of Automatic Data Processing, Inc., where he nearly doubled revenues, significantly improved margins and diversified that business’s operations. He also spent 18 years at McKinsey and Company, specializing in offering Fortune 500 clients advice on new product and services innovations. Mr. Fradin previously served on the boards of directors of SunGard Data Systems, Inc. and Gartner, Inc.
| | | David W. Kenny | | | | | | | | | | |
| Age:Education: 59 | | | Committees: | |
| Director Since: Mr. Fradin holds degrees from the Wharton School of the University of PennsylvaniaSeptember 2013 | | | | | | • | | | Compensation Committee (Chair) | |
| | | | ✔ | | | Independent | | | | | | • | | | Nominating Committee | |
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| | | | Other Public Company Directorships: | |
| | | | | | | • | | | Nielsen | |
Current Role:
CEO and a director of Nielsen, a global measurement and data analytics company (December 2018-present)
Prior Roles:
Chief Diversity Officer, Nielsen (December 2018 – March 2021)
Senior Vice President of IBM Watson (January 2016-2018) and IBM Cloud (November 2016-2018), business units of IBM, an American multinational technology and consulting corporation;
Chairman and Chief Executive Officer of The Weather Company, a leading provider of weather forecasts and information (2012-2015);
President of Akamai, a leading cloud platform technology company (2011-2012);
Managing Partner of VivaKi, a provider of integrated strategy, technology and marketing solutions for internet-based ecommerce companies (2006-2010); and
Founder and Chief Executive Officer of Digitas, Inc., which was later merged with VivaKi (1997-2006).
Education: Mr. Kenny holds degrees from the GM Institute (now Kettering University) and from Harvard University.
Key Qualifications & Experience:
CEO Experience - Mr. Kenny is the CEO and Chief Diversity Officer at Nielsen, an S&P 500 company. He also previously served as CEO of The Weather Co., which was sold to IBM, and Digitas Inc., a global marketing and technology agency, and in a variety of other executive roles, including Senior Vice President of IBM Watson and IBM Cloud, President of Akamai and Managing Partner of VivaKi.
Technology Expertise - As Senior Vice President of IBM Watson, Mr. Kenny led the company’s growth initiatives around cloud and artificial intelligence services. His online leadership dates to 1997, when he founded Digitas, Inc., a provider of technology and marketing solutions for e-commerce and multichannel companies. His experience leading The Weather Company offers the Company strong environmental leadership and climate change expertise.
Customer Engagement Expertise - As CEO of Nielsen, a global market research leader, Mr. Kenny has a deep knowledge of consumer insights. As chairman and chief executive officer of The Weather Company, acquired by IBM in 2016, he helped turn the organization into a media heavyweight that produced television programming, developed apps, published content and used analytics to connect businesses to consumers through weather and climate-related content. He uses those consumer centric and strategic skills to support Best Buy’s growth and transformation efforts, including our goal of capturing online share and responsible use of data to serve customers based on how, where and when they want to be served.
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