| Richard M. Schulze, Founder and each person, or any group that we know who beneficially owns more than 5% of the outstanding shares of our common stock. Chairman Emeritus
6600 France Avenue South, Suite 550 | | | | | | | | | | | Name and Address(1) | | Number of Shares Beneficially Owned |
| | | | Percent of Shares Beneficially Owned |
| Hubert Joly, Chairman and Chief Executive Officer | | 1,903,088 |
| | (2 | ) | | * |
| Sharon L. McCollam, Chief Administrative Officer and Chief Financial Officer | | 441,803 |
| | (3 | ) | | * |
| Shari L. Ballard, President, U.S. Retail | | 425,730 |
| | (4 | ) | | * |
| R. Michael Mohan, Chief Merchandising Officer | | 401,101 |
| | (5 | ) | | * |
| Keith J. Nelsen, General Counsel & Secretary | | 253,471 |
| | (6 | ) | | * |
| Bradbury H. Anderson, Director | | 154,935 |
| | (7 | ) | | * |
| Lisa M. Caputo, Director | | 40,266 |
| | (8 | ) | | * |
| J. Patrick Doyle, Director | | 8,388 |
| | (9 | ) | | * |
| Russell P. Fradin, Director | | 17,766 |
| | (10 | ) | | * |
| Kathy J. Higgins Victor, Director | | 68,496 |
| | (11 | ) | | * |
| David W. Kenny, Director | | 13,743 |
| | (12 | ) | | * |
| Karen A. McLoughlin, Director | | 2,598 |
| | (13 | ) | | * |
| Thomas L. Millner, Director | | 12,230 |
| | (14 | ) | | * |
| Claudia F. Munce, Director | | 345 |
| | (15 | ) | | * |
| Gérard R. Vittecoq, Director | | 41,450 |
| | (16 | ) | | * |
| All current directors and executive officers, as a group (19 individuals) | | 3,934,777 |
| | (17 | ) | | 1.21% |
| Richard M. Schulze, Founder and Chairman Emeritus 3033 Excelsior Blvd., Suite 525 Minneapolis, MN 55416 | | 44,152,196 |
| | (18 | ) | | 13.64 | % | FMR LLC ("Fidelity") 245 Summer Street Boston, MA 02210 | | 40,526,297 |
| | (19 | ) | | 11.82 | % | The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 | | 28,532,817 |
| | (20 | ) | | 8.32 | % | JPMorgan Chase & Co. 270 Park Avenue New York, NY 10017 | | 28,053,911 |
| | (21 | ) | | 8.10 | % | BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | | 17,977,273 |
| | (22 | ) | | 5.20 | % |
Minneapolis, MN 55435 | | | 23,360,360(12) | | | 10.34% | | | The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355 | | | 27,705,867(13) | | | 12.26% | | | BlackRock, Inc.
55 East 52nd Street
New York, NY 10055 | | | 21,872,180(14) | | | 9.68% | |
| | (1)
| The business address for all current directors and executive officers is 7601 Penn Avenue South, Richfield, Minnesota, 55423. |
(2)
| | (2) | The figure represents: (a) 402,563 outstanding shares owned by Mr. Joly; (b) 371,000 restricted stock units, which Mr. Joly could convert to shares within 60 days of April 13, 2016; (c) 43,554 restricted shares subject to a time-based vesting schedule, which vest within 60 days of April 13, 2016; and (d) options to purchase 714,971 shares, which Mr. Joly could exercise within 60 days of April 13, 2016. | The figure represents: (a) 168,107 outstanding shares owned by Ms. Barry; (b) 2,671 outstanding shares held in the name of the Trustee in connection with the Retirement Saving Plan for the benefit of Ms. Barry; and (c) options to purchase 198,329 shares, which Ms. Barry could exercise within 60 days of March 28, 2022. The figure does not include 89,000 shares underlying performance share awards that are subject to vesting and settlement within 60 days of March 28, 2022 to the extent that performance objectives are determined to be achieved. |
(3)
| | (3) | The figure represents: (a) 267,663 outstanding shares owned by Ms. McCollam; (b) 22,400 restricted shares subject to a time-based vesting schedule, which vest within 60 days of April 13, 2016; and (c) options to purchase 151,740 shares, which Ms. McCollam could exercise within 60 days of April 13, 2016. | The figure represents: (a) 24,355 outstanding shares owned by Mr. Bilunas; and (b) options to purchase 13,410 shares, which Mr. Bilunas could exercise within 60 days of March 28, 2022. The figure does not include 12,037 shares underlying performance share awards that are subject to vesting and settlement within 60 days of March 28, 2022 to the extent that performance objectives are determined to be achieved. |
(4)
| | (4) | The figure represents: (a) 44,013 outstanding shares owned by Ms. Ballard; (b) 6,637 restricted shares subject to a time-based vesting schedule, which vest within 60 days of April 13, 2016; and (c) options to purchase 375,080 shares, which Ms. Ballard could exercise within 60 days of April 13, 2016. | The figure represents: (a) 19,667 outstanding shares owned by Mr. Bonfig and (b) 3,215 outstanding shares held in the name of the Trustee in connection with the Retirement Saving Plan for the benefit of Mr. Bonfig. The figure does not include 4,922 shares underlying performance share awards that are subject to vesting and settlement within 60 days of March 28, 2022 to the extent that performance objectives are determined to be achieved. |
(5)
| The figure represents outstanding shares owned by Mr. Harmon. The figure does not include 3,260 shares underlying performance share awards that are subject to vesting and settlement within 60 days of March 28, 2022 to the extent that performance objectives are determined to be achieved. |
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| | (5) | The figure represents: (a) 102,104 outstanding shares owned by Mr. Mohan; (b) 5,531 restricted shares subject to a time-based vesting schedule, which vest within 60 days of April 13, 2016; (c) 2,029 outstanding shares held in the name of the Trustee in connection with the Retirement Saving Plan for the benefit of Mr. Mohan; and (d) options to purchase 291,437 shares, which Mr. Mohan could exercise within 60 days of April 13, 2016. | The figure represents: (a) 47,244 outstanding shares owned by Ms. Scarlett; and (b) options to purchase 18,487 shares, which Ms. Scarlett could exercise within 60 days of March 28, 2022. The figure does not include 12,424 shares underlying performance share awards that are subject to vesting and settlement within 60 days of March 28, 2022 to the extent that performance objectives are determined to be achieved. |
(7)
| | (6) | The figure represents: (a) 27,781 outstanding shares owned by Mr. Nelsen; (b) 7,190 restricted shares subject to a time-based vesting schedule, which vest within 60 days of April 13, 2016; (c) 869 outstanding shares held in the name of the Trustee in connection with the Retirement Saving Plan for the benefit of Mr. Nelsen; and (d) options to purchase 217,631 shares, which Mr. Nelsen could exercise within 60 days of April 13, 2016. | The figure represents: (a) 10,000 outstanding shares owned by Ms. Caputo and (b) 38,139 restricted stock units, which Ms. Caputo could convert to shares within 60 days of March 28, 2022. |
(8)
| | (7) | The figure represents: (a) 125,174 outstanding shares registered in the name of Mr. Anderson's spouse and a co-trustee, and held by them as trustees of a trust for the benefit of Mr. Anderson's spouse (Mr. Anderson has disclaimed beneficial ownership of these shares); (b) 11,995 outstanding shares owned by the Anderson Family Foundation, of which Mr. Anderson is a director; and (c) 17,766 restricted stock units, which Mr. Anderson could convert to shares within 60 days of April 13, 2016.
| The figure represents: (a) 20,000 outstanding shares owned by Mr. Doyle and (b) 31,743 restricted stock units, which Mr. Doyle could convert to shares within 60 days of March 28, 2022. |
(9)
| | (8) | The figure represents: (a) 10,000 outstanding shares owned by Ms. Caputo; (b) 17,766 restricted stock units, which Ms. Caputo could convert to shares within 60 days of April 13, 2016; and (c) options to purchase 12,500 shares, which Ms. Caputo could exercise within 60 days of April 13, 2016. | The figure represents restricted stock units that could be converted to shares within 60 days of March 28, 2022. |
(10)
| | (9) | The figure represents 8,388 restricted stock units, which Mr. Doyle could convert to shares within 60 days of April 13, 2016. | The figure represents: (a) 8 outstanding shares held by a limited liability company formed by Mr. Marte’s spouse for the benefit of Mr. Marte and (b) 2,604 restricted stock units, which Mr. Marte could convert to shares within 60 days of March 28, 2022. |
(11)
| | (10) | The figure represents 17,766 restricted stock units, which Mr. Fradin could convert to shares within 60 days of April 13, 2016. | The figure represents: (a) the outstanding and attainable shares, restricted stock units and options described in the preceding footnotes (2) through (10); (b) 152,718 outstanding shares owned by other executive officers; (c) 2,424 restricted shares subject to time-based vesting schedules, which are held by other executive officers and which vest within 60 days of March 28, 2022; and (d) options to purchase 101,709 shares, which the other executive officers could exercise within 60 days of March 28, 2022. The figure does not include 29,408 shares underlying performance share awards of the other executive officers that are subject to vesting and settlement within 60 days of March 28, 2022, to the extent that performance objectives are determined to be achieved. |
(12)
| | (11) | The figure represents: (a) 10,730 outstanding shares owned by Ms. Higgins Victor; (b) 17,766 restricted stock units, which Ms. Higgins Victor could convert to shares within 60 days of April 13, 2016; and (c) options to purchase 40,000 shares, which Ms. Higgins Victor could exercise within 60 days of April 13, 2016. |
| | (12) | The figure represents 13,743 restricted stock units, which Mr. Kenny could convert to shares within 60 days of April 13, 2016. |
| | (13) | Ms. McLoughlin received a prorated equity grant of 3,606 restricted stock units on September 24, 2015, following her appointment to the Board. These units will vest one year from the grant date. If she were to leave the Board voluntarily within 60 days of April 13, 2016, she could convert to shares up to 2,598 units of her grant. |
| | (14) | The figure represents 12,230 restricted stock units, which Mr. Millner could convert to shares within 60 days of April 13, 2016. |
| | (15) | Ms. Munce received a prorated equity grant of 1,383 restricted stock units on March 14, 2016, following her appointment to the Board. These units will vest one year from the grant date. If she were to leave the Board voluntarily within 60 days of April 13, 2016, she could convert to shares up to 345 units of her grant. |
| | (16) | The figure represents: (a) 2,434 outstanding shares owned by Mr. Vittecoq; (b) 17,766 restricted stock units, which Mr. Vittecoq could convert to shares within 60 days of April 13, 2016; and (c) options to purchase 21,250 shares, which Mr. Vittecoq could exercise within 60 days of April 13, 2016. |
| | (17) | The figure represents: (a) the outstanding shares, restricted stock units and options described in the preceding footnotes (2) thru (16); (b) 28,712 outstanding shares owned by other executive officers; (c) 20,221 restricted shares subject to time-based vesting schedules, which are held by other executive officers and which vest within 60 days of April 13, 2016; and (d) options to purchase 100,434 shares, which the other executive officers could exercise within 60 days of April 13, 2016. |
| | (18) | Mr. Schulze is our Founder and Chairman Emeritus, | Mr. Schulze is our Founder and Chairman Emeritus. He is not a member of our Board and is not considered an executive officer but he is no longer a member of our Board and is not considered an executive officer. He is listed here due to his status as a beneficial owner of more than 5% of our common stock. The figure represents: (a) 1,732,500 outstanding shares owned by Mr. Schulze; (b) 24,520,994 outstanding shares registered in the name of Mr. Schulze and a co-trustee, and held by them as trustees of a trust for the benefit of Mr. Schulze, of which up to $150 million in aggregate value of shares have been pledged by the trust as collateral to secure a line of credit; (c) 11,629,440 outstanding shares registered in the name of Mr. Schulze and co-trustees, and held by them as trustees of Grantor Retained Annuity Trusts for the benefit of Mr. Schulze and his family; (d) 1,143,043 outstanding shares registered in the name of Mr. Schulze and a co-trustee, and held by them as trustees of the Sandra Schulze Grantor Retained Annuity Trust; (e) 950,169 outstanding shares held by a limited partnership of which Mr. Schulze is the sole general partner (Mr. Schulze has disclaimed beneficial ownership of these shares except to the extent of his pecuniary interest therein); (f) 252,312 outstanding shares held by a limited partnership of which a limited liability company owned by Mr. Schulze is the sole general partner; (g) 31,672 outstanding shares held by a limited partnership of which a limited liability company owned by Mr. Schulze is the sole general partner; (h) 12,309 outstanding shares registered in the name of Mr. Schulze's spouse and co-trustees, and held by them as trustees of trusts for the benefit of Mr. Schulze's spouse (Mr. Schulze has disclaimed beneficial ownership of these shares); (i) 183,726 outstanding shares registered in the name of Mr. Schulze and a co-trustee, and held by them as trustees of the Sandra Schulze Revocable Trust dated June 14, 2001 (Mr. Schulze has disclaimed beneficial ownership of these shares); (j) 2,061 outstanding shares held in Mr. Schulze's individual retirement account; (k) 3,618,078 outstanding shares owned by The Richard M. Schulze Family Foundation, of which Mr. Schulze is the sole director; (l) 75,892 outstanding shares registered in the name of the Trustee in connection with the Retirement Saving Plan for the benefit of Mr. Schulze; and (m) options to purchase 7,500 shares, which he could exercise within 60 days of April 13, 2016. |
| | (19) | As reported on the owner's most recent Schedule 13G filed with the SEC on February 12, 2016 to report ownership as of December 31, 2015. FMR LLC and certain related entities have sole voting power over 3,363,312 shares and sole dispositive power over 40,526,297 shares. |
| | (20) | As reported on the owner's most recent Schedule 13G filed with the SEC on February 10, 2016 to report ownership as of December 31, 2015. The Vanguard Group has sole voting power over 548,647 shares, shared voting power over 31,600 shares, sole dispositive power over 27,940,460 shares and shared dispositive power over 592,357 shares. |
| | (21) | As reported on the owner's most recent Schedule 13G filed with the SEC on January 26, 2016 to report ownership as of December 31, 2015. JPMorgan Chase & Co. has sole voting power over 25,757,775 shares, shared voting power over 39,362 shares, sole dispositive power over 27,998,484 shares and shared dispositive power over 55,367 shares. |
| | (22) | As reported on the owner's most recent Schedule 13G filed with the SEC on January 22, 2016 to report ownership as of December 31, 2015. BlackRock, Inc. has sole voting power over 15,054,839 shares and sole dispositive power over 17,977,273 shares. |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that our directors, executive officers and shareholders who beneficially own more than 10% of our common stock file initial reports of ownership with the SEC. They must also file reports of changes in ownership with the SEC. In addition, they are required by SEC regulations to provide us copies of all Section 16(a) reports that they file with the SEC. Based solely on a review of such Section 16(a) reports, management and the Board believe our directors, executive officers and shareholders who beneficially own more than 10% of our common stock complied with the Section 16(a) filing requirements during the fiscal year ended January 30, 2016, except that on June 10, 2015 a Form 4 filed on behalf of Bradbury H. Anderson (as later amended on a Form 4/A filed on January 28, 2016) included bona fide gifts that occurred on June 16, 2014, July 24, 2014, November 10, 2014, December 2, 2014 and December 17, 2014.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Our Related Party Transactions Policy prohibits "related party transactions" unless approved by the Audit Committee and the Board. For purposes of our policy, a "related party transaction" is a transaction or series of transactions in which (a) the Company or a subsidiary is a participant, (b) the aggregate amount involved exceeds $120,000 and (c) any director, executive officer or shareholder beneficially owning more than 5% of our common stock, or any of their respective immediate family members has a direct or indirect material interest.
A related party transaction will generally not be approved unless it provides us with a demonstrable incremental benefit and the terms are competitive with those available from unaffiliated third parties. Only Board members who do not have an intereststock. The figure represents: (a) 20,214,051 outstanding shares registered in the transaction are permittedname of Mr. Schulze and a co-trustee, and held by them as trustees of a trust for the benefit of Mr. Schulze, of which up to vote on a related party transaction. In addition, ongoing related party transactions are reviewed annually$150 million in aggregate value of shares have been pledged by the Audit Committeetrust as collateral to secure a line of credit; (b) 1,153,938 outstanding shares registered in the name of Mr. Schulze and the Board to ensure that such transactions continue to provide the necessary incremental benefit to usa co-trustee, and have competitive terms. Eachheld by them as trustees of the transactions discussed below were approved (or re-approved if ongoing)Sandra Schulze Grantor Retained Annuity Trust; (c) 950,169 outstanding shares held by the Audit Committee and the Board in March 2016, in accordance with our Related Party Transactions Policy.
We do not have any credit arrangements between our officers, directors, controlling persons and other insiders.
Richard M. Schulze
Asa limited partnership of the date of this filing,which Mr. Schulze owned approximately 13.6%is the sole general partner (Mr. Schulze has disclaimed beneficial ownership of our common stock. On March 25, 2013, we entered into a letter agreement with Mr. Schulze pursuantthese shares except to which, among other things, Mr. Schulze was given the lifetime honorary title of "Founder and Chairman Emeritus" of the Company, although he is not an executive and is no longer a member of our Board. Under this letter agreement, we agreed to compensate Mr. Schulze with an annual base salary of $150,000 through fiscal 2018 for his services as Chairman Emeritus, and to provide lifetime medical benefits for him, his spouse and his eligible dependents in accordance with our plans, practices, programs and policies in effect generally for our executives and their dependents. We also agreed to provide office space and administrative support, and to reimburse Mr. Schulze for his costs and out-of-pocket expenses incurred in the performanceextent of his duties as Chairman Emeritus. Mr. Schulze was also entitled, during the termpecuniary interest therein); (d) 31,672 outstanding shares held by a limited partnership of the letter agreement, to nominate two directors for appointment to the Board of Directors. Messrs. Anderson and Lenzmeier were nominated and elected to the Board as part of this arrangement. The letter agreement's term expired when Mr. Schulze reached the age of 75 (which occurred in January 2016), except as specifically described above.
During fiscal 2016, we had ongoing lease obligations for one of our former U.S. Best Buy store locations leased from Mr. Schulze. We entered into the real estate lease with Mr. Schulze prior to 1990, and the Board approved the lease (with Mr. Schulze not voting). The Board relied on one or more of its members who had no financial interest in the property to review market comparisons, look into alternative rental agreements and negotiate with Mr. Schulze. At the time of entering into this lease, the Board determined that it was in our best interest and had terms that were competitive with terms available from unaffiliated third parties. We closed this store in May 2012. The store location lease included escalation clauses and, depending upon our exercise of successive renewal options, ran through 2018. We continued to pay rent for this location per the terms of the lease. During fiscal 2016, we paid aggregate rent of approximately $613,000. In April 2016, with Audit Committee and Board approval, we entered intowhich a lease termination agreement for this location in which we agreed to pay a termination fee of approximately $300,000 in exchange for a release from our future rent and other obligations under the lease (which totaled approximately $1.2 million).
We purchase certain store fixtures from Phoenix Fixtures, Inc. ("Phoenix"), alimited liability company owned by Mr. Schulze's late brother, Robert Schulze (his death occurredis the sole general partner; (e) 172,831 outstanding shares registered in June 2015). Phoenix contracts are submitted through a competitive bidding process in which Phoenix is free to participate. Payments made to Phoenix are pursuant to contracts awarded following the competitive bidding process. In lightname of Mr. Schulze's relationship with Phoenix, the Board reviewed our transactions with Phoenix and determined that the transactions were on fair terms to us and that Phoenix provides advantages with respect to service and delivery as compared with its competitors. Accordingly, the Board approved the transactions and our continued business dealings with Phoenix. The total amount paid to Phoenix during fiscal 2016 was approximately $8.3 million USD and $44,000 CAD, compared to approximately $7.5 million USD and $31,000 CAD paid in fiscal 2015. All transactions with Phoenix during fiscal 2016 were subject to the competitive bidding process discussed above to ensure fair prices and terms.
Ryan Green, Mr. Schulze's step-son, is employed with us as a Senior Director in our Properties department at our corporate headquarters in Richfield, Minnesota. Mr. Green's total cash compensation for fiscal 2016 was approximately $202,000. Mr. Green also received an annual long-term incentive award of 1,400 time-based restricted sharesSchulze and a mid-year long-term incentive award of 225 time-based restricted shares, which vest in one-third increments on each anniversaryco-trustee, and held by them as trustees of the grants for three years,Sandra Schulze Revocable Trust dated June 14, 2001 (Mr. Schulze has disclaimed beneficial ownership of these shares); (f) 2,061 outstanding shares held in Mr. Schulze’s individual retirement account; (g) 763,248 outstanding shares owned by The Richard M. Schulze Family Foundation, of which Mr. Schulze is the sole director and which awards are consistent for other employees at his level. Mr. Green is eligible to receive employee benefits generally available to all employees. Mr. Green's employment with us began(h) 72,390 outstanding shares registered in August 2012. Mr. Schulze's family member is compensated at a level comparable to the compensation paid to non-family members in similar positions at Best Buy.
Fidelity
FMR LLC ("Fidelity") filed an amended Schedule 13G in February 2016, stating that it beneficially owns 11.8%name of the Company's common stock. As a result of beneficially owning more than 5% of our common stock, Fidelity is currently considered a “related party” under our Related Party Transactions Policy. Certain affiliates of Fidelity provide services to usTrustee in connection with the record keeping and administrationRetirement Saving Plan for the benefit of our stock plans (includingMr. Schulze.
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| Share numbers are as reported on the Employee Stock Purchase Plan and the Long-Term Incentive Plan). We paid these entities approximately $510,000 for these services for fiscal 2016. The administrative services contracts were initially entered into prior to Fidelity'sowner’s most recent Schedule 13G filing and 5% holder status. The contracts were negotiated at arm's length, and there is no indication that the Company or Fidelity received preferential treatment as a result of the relationship.
JPMorgan Chase
JPMorgan Chase & Co. ("JPMorgan")13G/A filed a Schedule 13G in January 2016, stating that it beneficially owns 8.1% of the Company's common stock. As a result of beneficially owning more than 5% of our common stock, JPMorgan is currently considered a “related party” under our Related Party Transactions Policy. JPMorgan and its affiliates provide services to us related to our revolving credit facility, share repurchase program and depository banking needs. We paid JPMorgan and its affiliates approximately $974,000 USD and $313,000 CAD for these services for fiscal 2016. The agreements related to these services were initially entered into prior to JPMorgan's Schedule 13G filing and 5% holder status. The agreements were negotiated at arm's length, and there is no indication that the Company or JPMorgan received preferential treatment as a result of the relationship.
AUDIT COMMITTEE REPORT
The information contained in this Audit Committee Report shall not be deemed to be "soliciting material" or "filed" or incorporated by reference in future filings with the SEC or subjecton February 9, 2022, to report ownership as of December 31, 2021. The Vanguard Group has shared voting power over 364,536 shares, sole dispositive power over 26,760,732 shares and shared dispositive power over 945,135 shares.
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(14)
| Share numbers are as reported on the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that we specifically incorporate it by reference into a documentowner’s most recent Schedule 13G/A filed under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
In fiscal 2016, the Audit Committee included five members. The Audit Committee acts under a written charter adopted and approved by the Board. The Audit Committee's charter is posted on our website at www.investors.bestbuy.com. All members of the Audit Committee meetwith the SEC on February 7, 2022, to report ownership as of December 31, 2021. BlackRock, Inc. has sole voting power over 18,969,792 shares and NYSE definitions of independence and financial literacy for audit committee members. In addition, the Board has determined that all of the five members of the Audit Committee who served during fiscal 2016 are "audit committee financial experts" for purposes of SEC rules. No member of the Audit Committee serves on the audit committee of more than three public companies.sole dispositive power over 21,872,180 shares.
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DELINQUENT SECTION 16(a) REPORTS Section 16(a) of the Securities Exchange Act of 1934 requires that our directors, executive officers and shareholders who beneficially own more than 10% of our common stock file initial reports of ownership with the SEC. They must also file reports of changes in ownership with the SEC. Based solely on our review of electronic filings with the SEC of such reports, management and the Board believe our directors, and executive officers who served during any part of fiscal 2022 and shareholders who beneficially own more than 10% of our common stock complied with the Section 16(a) filing requirements during the fiscal year ended January 29, 2022. | | | | | | | | | | | | | | | | | | | 41 | | | In June 2015, Mr. Kenny was appointed to serve as Chair of the Audit Committee. In November 2015, Ms. McLoughlin was appointed to the Audit Committee. Ms. Munce was appointed to the Audit Committee in March 2016, following the conclusion of fiscal 2016.
| | | 2022 Proxy Statement |
TABLE OF CONTENTS CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS Our Related Party Transactions Policy prohibits “related party transactions” unless approved by the Audit Committee and the Board. For purposes of our policy, a “related party transaction” is a transaction or series of transactions in which (a) the Company or a subsidiary is a participant, (b) the aggregate amount involved exceeds $120,000 and (c) any director, executive officer or shareholder beneficially owning more than 5% of our common stock, or any of their respective immediate family members has a direct or indirect material interest. A related party transaction will generally not be approved unless it provides us with a demonstrable incremental benefit and the terms are competitive with those available from unaffiliated third parties. Only Board members who do not have an interest in the transaction are permitted to vote on a related party transaction. In addition, ongoing related party transactions are reviewed by the Audit Committee and the Board to ensure that such transactions continue to provide the necessary incremental benefit to us and have competitive terms. Each of the transactions discussed below were approved (or re-approved if ongoing) by the Audit Committee and the Board in March 2022, unless otherwise noted, in accordance with our Related Party Transactions Policy. We do not have any credit arrangements between our officers, directors, controlling persons and other insiders. Richard M. Schulze As of the date of this filing, Mr. Schulze owned approximately 10.3% of our common stock. On March 25, 2013, we entered into a letter agreement with Mr. Schulze pursuant to which, among other things, Mr. Schulze was given the lifetime honorary title of “Founder and Chairman Emeritus” of the Company, although he is not an executive and is no longer a member of our Board. Under this letter agreement, we agreed to compensate Mr. Schulze with an annual base salary of $150,000 through fiscal 2018 for his services as Chairman Emeritus, and to provide lifetime medical benefits for him, his spouse and his eligible dependents in accordance with our plans, practices, programs and policies in effect generally for our executives and their dependents. We also agreed to provide office space and administrative support, and to reimburse Mr. Schulze for his costs and out-of-pocket expenses incurred in the performance of his duties as Chairman Emeritus. The letter agreement’s term has been successively renewed since that time, including in 2021 for fiscal 2022, except as specifically described above in regard to certain lifetime health benefits. Jason Bonfig Mr. Bonfig’s fiancée is employed with us as a Vice President on our Omnichannel team at our corporate headquarters in Richfield, Minnesota. Her total cash compensation in fiscal 2022 was approximately $327,550. She also received an annual long-term incentive award of 1,322 time-based restricted shares, which vest in one-third increments on each anniversary of the grant for three years, and 395 performance shares, which vest after three years based on achievement of performance. Her award is consistent with awards for other employees at her level. She is eligible to receive employee benefits generally available to all employees. Her employment with us began in 1997. She is compensated at a level comparable to the compensation paid to unrelated employees in similar positions at Best Buy. | | | | | | | | | | | | | | | | 2022 Proxy Statement | | | 42 | | | | | | |
TABLE OF CONTENTS The key responsibility of the Audit Committee is to assist the Board in overseeing the integrity of the Company’s financial statements and financial reporting processes. The Audit Committee’s charter, which was approved by our Board, is posted on our website at www.investors.bestbuy.com. During fiscal 2022, the Audit Committee included five members. All Audit Committee members meet the SEC and NYSE definitions of independence and financial literacy for audit committee members. The Board has determined that Ms. McLoughlin, Mr. Marte and Mr. Millner are “audit committee financial experts” for purposes of SEC rules based on their relevant experience. No member of the Audit Committee serves on the audit committee of more than three public companies. Committee Meetings
The Audit Committee met eightnine times including three times via conference call, during fiscal 2016.2022. The Audit Committee schedules its meetings to ensure it has sufficient time to devote appropriate attention to all of its tasks. The Audit Committee meetings include regular executive sessions with our independent registered public accounting firm, Deloitte & Touche LLP ("(“D&T"&T”), our internal auditors and management. The Audit Committee also discusses with our internal auditors and D&T the overall scope and plans for their respective audits.
Recommendation RegardingFiscal 2022 Audited Financial Statements
The Audit Committee, on behalf of the Board, reviewed and discussed with both management and D&T our annual audited consolidated financial statements for the fiscal year ended January 30, 2016,29, 2022, and our quarterly operating results for each quarter in such fiscal year, along with the related significant accounting and disclosure issues. The Audit Committee has discussed with the independent auditors the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board Auditing Standard No. 16 "The Auditor's Communication with Audit Committees." (“PCAOB”) (U.S.) and the Commission.
The Audit Committee reviewed and discussed with D&T its independence from us and our management. As part of that review, the Audit Committee received from D&T the written disclosures and the letter required by applicable rules of the Public Company Accounting Oversight BoardPCAOB (U.S.) regarding the independent accountant'saccountant’s communications with audit committees concerning independence. In addition, the Audit Committee reviewed all services provided by and the amount of fees paid to D&T in fiscal 2016.2022. In reliance on the reviews and discussions with management and D&T, the Audit Committee believes that the services provided by D&T were compatible with, and did not impair, its independence.
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board, and the Board approved, that our annual audited consolidated financial statements be included in our Annual Report on Form 10-K for the period ended January 30, 2016, as filed29, 2022, for filing with the SEC.
AUDIT COMMITTEE Thomas L. Millner (Chair)
David W. Kenny (Chair)
Mario J. Patrick DoyleMarte
Karen A. McLoughlin Thomas L. Millner
Gérard R. Vittecoq
Claudia F. Munce
| | | | | | | | | | | | | | | | | | | 43 | | | | | | 2022 Proxy Statement |
TABLE OF CONTENTS
ITEM OF BUSINESS NO. 2 — RATIFICATION OF APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THIS SECTION SHOULD BE READ IN CONJUNCTION WITH THE " “AUDIT COMMITTEE REPORT"REPORT”
The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm retained to audit the Company’s financial statements. As part of this oversight, the Audit Committee considers the firm’s independence, qualifications, performance, and whether the independent registered public accounting firm should be rotated, as well as the impact of such a rotation. Deloitte & Touche LLP (“D&T&T”) has been retained as our independent registered public accounting firm since fiscal 2006.2005. In compliance with Sarbanes-Oxley requirements, the Lead Audit Partner from D&T rotates off our account every five years, with oversight in selection by the Audit Committee. The last Lead Audit Partner rotation occurred in March 2021. The Audit Committee has appointed Deloitte & Touche LLP ("D&T")&T as our independent registered public accounting firm for the fiscal year ending January 30, 2016.28, 2023. We will ask shareholders to ratify the appointment of D&T as our independent registered public accounting firm at the Meeting. Representatives of D&T are expected to be present atattend the Meeting. They will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.
Principal Accountant Services and Fees
The Audit Committee is responsible for the audit fee negotiations associated with the retention of our independent registered public accounting firm. For the fiscal years ended January 30, 2016,29, 2022, and January 31, 2015,30, 2021, D&T served as our independent registered public accounting firm. The following table presents the aggregate fees incurred for services rendered by D&T during fiscal 20162022 and fiscal 2015,2021, respectively. The fees listed below were pre-approved by our Audit Committee pursuant to the Audit Committee'sCommittee’s pre-approval policy as described below: | | | | | | | | | | Service Type | | Fiscal 2016 |
| | Fiscal 2015 |
| Audit Fees(1) | | $ | 2,740,000 |
| | $ | 3,072,000 |
| Audit-Related Fees(2) | | 400,000 |
| | 1,133,000 |
| Tax Fees(3) | | 50,000 |
| | 45,000 |
| Total Fees | | $ | 3,190,000 |
| | $ | 4,250,000 |
|
| Audit Fees(1) | | | $ 3,135,000 | | | $ 2,973,000 | | | Audit-Related Fees(2) | | | 1,034,000 | | | 368,000 | | | Tax Fees(3) | | | 150,000 | | | — | | | Total Fees | | | $4,319,000 | | | $3,341,000 | |
| | (1)
| Consists of fees for professional services rendered in connection with the audits of our consolidated financial statements and the effectiveness of our internal control over financial reporting for the fiscal years ended January 30, 2016,29, 2022, and January 31, 2015;30, 2021; the reviews of the consolidated financial statements included in each of our Quarterly Reports on Form 10-Q during those fiscal years; and consultations on accounting matters. |
| | (2)
| Consists primarily of fees for acquisition due diligence and statutory audit filings, as well as the audits of our retirement savings plans and foundations.foundation. |
| | (3)
| Consists primarily of fees related to tax compliance services based on time and materials.consulting services. |
It is our policy that our independent registered public accounting firm be engaged to provide primarily audit and audit-related services. However, pursuant to the policy, in certain circumstances and using stringent standards in its evaluation, the Audit Committee may authorize our independent registered public accounting firm to provide tax services when it determines that D&T is the most efficient and effective tax service provider.
Consistent with SEC rules regarding auditor independence, the Audit Committee is responsible for appointing, setting fees for and overseeing the work of our independent registered public accounting firm. In recognition of this responsibility and in accordance with the Securities Exchange Act of 1934, as amended, it is the policy of the Audit Committee to pre-approve all permissible services provided by our independent registered public accounting firm, except for minor audit-related engagements which in the aggregate do not exceed 5% of the fees we pay to our independent registered public accounting firm during a fiscal year.
Each year, prior to engaging our independent registered public accounting firm, management submits to the Audit Committee for approval a list of services expected to be provided during that fiscal year within each of the three categories of services described below, as well as related estimated fees, which are generally based on time and materials. | | | | | | | | | | | | | | | | 2022 Proxy Statement | | | 44 | | | | | | |
TABLE OF CONTENTS Audit services include audit work performed on the financial statements, as well as work that generally only the independent registered public accounting firm can reasonably be expected to provide, including comfort letters and discussions surrounding the proper application of financial accounting and/or reporting standards.
Audit-related services include assurance and related services that are traditionally performed by the independent registered public accounting firm, including due diligence related to mergers and acquisitions, statutory audits, employee benefit plan audits and special procedures required to meet certain regulatory requirements.
Tax services include tax consulting services, as well as compliance and other non-advisory services performed by the independent registered public accounting firm when it is most efficient and effective to use such firm as the tax service provider.
As appropriate, the Audit Committee then pre-approves the services and the related estimated fees. The Audit Committee requires our independent registered public accounting firm and management to report actual fees versus the estimate periodically throughout the year by category of service. During the year, circumstances may arise when it becomes necessary to engage our independent registered public accounting firm for additional services not contemplated in the initial annual proposal. In those instances, the Audit Committee pre-approves the additional services and related fees before engaging our independent registered public accounting firm to provide the additional services.
Board Voting Recommendation
The members of the Audit Committee and the Board believe that the continued retention of D&T to serve as the Company’s independent registered public accounting firm is in the best interests of the Company and our shareholders. The Board recommends that shareholders vote FOR the proposal to ratify the appointment of D&T as our independent registered public accounting firm for the fiscal year ending January 28, 2017. 2023. The affirmative vote of a majority of the voting power of the shares present and entitled to vote at the Meeting is required to ratify D&T as our independent registered accounting firm. Although ratification is not required pursuant to our By-laws or otherwise, the Board is submitting the selection of D&T to our shareholders for ratification because we value our shareholders'shareholders’ views on the Company'sCompany’s independent registered public accounting firm. If the appointment of D&T were not to be ratified by the shareholders, the Audit Committee would not be required to appoint another independent registered public accounting firm but would give consideration to an unfavorable vote. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our shareholders. | | | | | | | | | | | | | | | | | | | 45 | | | | | | 2022 Proxy Statement |
TABLE OF CONTENTS ITEM OF BUSINESS NO. 3 — ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION We are providing our shareholders with an opportunity to cast an advisory vote, a “Say on Pay,” regarding our fiscal 2022 named executive officer (“NEO”) compensation program, as described in the Executive and Director Compensation section of this proxy statement. Information About the Advisory Vote to Approve Named Executive Officer Compensation The Compensation Committee establishes, recommends and governs all of the compensation and benefits policies and actions for the Company’s NEOs. While the advisory vote to approve the compensation of our named executive officers is not binding, it provides useful information to our Board and Compensation Committee regarding our shareholders’ views of our executive compensation philosophy, policies and practices. The Compensation Committee values our shareholders’ opinions and will take the results of the vote into consideration when determining the future compensation arrangements for our named executive officers. At the Company’s 2019 Regular Meeting of Shareholders, our shareholders voted to hold the non-binding shareholder vote to approve the compensation of our named executive officers each year. Accordingly, the Company currently intends to hold such votes annually. The next such vote is expected to be held at the Company’s 2023 Regular Meeting of Shareholders. As detailed in the Executive and Director Compensation — Compensation Discussion and Analysis section, we believe our fiscal 2022 executive compensation program reflects market appropriate practices and balances risk and reward in relation to our overall business strategy. Our executive compensation program is focused on pay-for-performance and seeks to mitigate risks related to compensation to ensure management and shareholder interests in long-term value creation are aligned. Accordingly, we ask that our shareholders cast an advisory vote to approve the following resolution: | RESOLVED, that the shareholders of the Company approve, on an advisory basis, the compensation of the named executive officers for the fiscal year ended January 29, 2022, as described in the Executive and Director Compensation — Compensation Discussion and Analysis section and the compensation tables and related material disclosed in the Company’s proxy statement for its 2022 Regular Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission. | |
Board Voting Recommendation Our Board recommends an advisory vote FOR approval of the fiscal 2022 compensation of our NEOs as disclosed in this proxy statement pursuant to the SEC’s compensation disclosure rules. The affirmative vote of at least a majority of the voting power of the shares present, in person or by proxy, and entitled to vote is required for advisory approval of our NEO compensation. It is intended that, unless otherwise instructed, the shares represented by proxy will be voted “FOR” the advisory vote on our named executive compensation. | | | | | | | | | | | | | | | | 2022 Proxy Statement | | | 46 | | | | | | |
TABLE OF CONTENTS EXECUTIVE AND DIRECTOR COMPENSATION Compensation Discussion and Analysis Introduction
The following Compensation Discussion and Analysis describes how the Compensation Committee of the Board decided to compensate our fiscal 2016 NEOs:2022 Named Executive Officers (“NEOs”): | Corie Barry | | | Chief Executive Officer | | l | Hubert Joly, Chairman andMatt Bilunas | | | Executive Vice President, Chief Executive Officer;Financial Officer | | l | Sharon L. McCollam,Jason Bonfig | | | Executive Vice President, Chief AdministrativeMerchandising Officer and Chief Financial Officer; | | l | Shari L. Ballard,Damien Harmon
| | | Executive Vice President, U.S. Retail and ChiefOmnichannel | | | Kamy Scarlett | | | Executive Vice President, Human Resources Officer;(1)& Best Buy Canada | l | R. Michael Mohan, Chief Merchandising Officer; and | l | Keith J. Nelsen, General Counsel and Secretary. |
(1) Effective March 1, 2016, Ms. Ballard took on a new role. While remaining President of U.S. Retail, she will also focus on accelerating our efforts around waste and efficiency. A new Chief Human Resources Officer, Paula Baker, was promoted internally effective March 1, 2016.
Consideration of Prior “Say on Pay” Votes
At our 2015 Meeting, 98% of our shareholders voted in support of our “Say on Pay” proposal, which was on par with our results in 2014, and an increase from the level of support we received in 2013.
We believe the level of support we received from shareholders for the last three years was driven in part by our improved performance and continued commitment to align pay and performance, which we communicated to investors through shareholder outreach prior to each annual meeting. During fiscal 2016, we reached out to all of our top twenty shareholders, representing approximately 70% of our outstanding shares, as well as several of our top fifty shareholders offering to discuss any concerns regarding executive compensation practices and other governance issues. As a result of these outreach efforts, we had in-person meetings and engaged in direct conversations with several shareholders to answer their questions, provide commentary on the compensation decisions made during the year and receive feedback to be considered when making future decisions. Further, as discussed in the Corporate Governance at Best Buy — Shareholder Engagement section, we regularly engage with our shareholders throughout the year regarding their various priorities, and we welcome their feedback on our practices and policies.
Summary of Executive Compensation Practices
Pay for Performance
| | ü | We tie pay to performance by setting clear financial goals and delivering the majority of compensation opportunity through variable incentives in which payout is based on performance against predetermined goals or absolute and relative changes in our stock price over time. |
| | ü | We use multiple performance metrics that differ for long-term and short-term plans. |
| | ü | Our short term incentive plan includes a minimum performance threshold that requires a minimal level of operating income be achieved before any aspect of the bonus plan may be earned. |
The ü A large portion of our long-term incentive program (50% for the CEO and one-third for the other NEOs) is performance based, and long-term and short-term incentives comprise a large portion of our total compensation opportunity (90% for the CEO and 80%, on average, for the other NEOs).
Risk Mitigators
| | ü | We review peer group market data when making executive compensation decisions. |
| | ü | We have share ownership and trading guidelines for executive officers and Board members. |
| | ü | We have anti-hedging and anti-pledging policies and clawback provisions. |
| | ü | We have robust processes to identify and mitigate compensation risk. |
| | ü | Our Compensation Committee uses an outside independent compensation consulting firm that performs no other services for the Company. |
Shareholder Engagement
| | ü | We have a shareholder engagement program that covers, among other things, executive compensation issues. |
| | ü | We provide shareholder feedback to the Compensation Committee, which considers the feedback when reviewing executive compensation programs and policies. |
Key Fiscal 2016 Compensation Decisions
In fiscal 2015, two years after launching Renew Blue, we had made significant progress in addressing our two biggest challenges (declining comparable sales and declining margins):
Our Domestic comparable sales increased, and
Our Domestic non-GAAP operating income rate improved 100 basis points to 4.1%.
Accordingly, in fiscal 2016, the Compensation Committee made market-based adjustments to acknowledge and retain the critical leaders that are driving Best Buy’s transformation. These changes include base salary, short-term incentive and/or long-term incentive adjustments, depending on each position, the incumbent and market trends. A summary of these changes is included below and explained in further detail within ourCompensation Discussion and Analysis:
Base Salaries: We made base salary changes for Ms. Ballard and Messrs. Mohan and Nelsen due to market comparisons and in recognition of each of their increased or continued growth in their respective roles.
Short-Term Incentives: We increased Ms. Ballard’s short-term incentive target payout percentage from 125 to 150% in recognition of her expanded role, and Mr. Mohan’s target payout percentage from 125 to 150% in acknowledgment of his continued progress in his role and to match the market.
Long-Term Incentives: Our long-term incentive program changes included increased targets for the NEOs to reflect market practice and promote retention of key leadership during this critical period of transformation, as well as a one-time award for Ms. Ballard to acknowledge comparable rates for the increased scope of her responsibilities and impact of her contributions to our Company performance. In addition, we increased the stock ownership target for our CEO from 140,000 shares to 200,000 shares to further promote alignment of officer and shareholder interests.
Other Compensation: The NEOs continue to receive the same employee benefits, perquisites and other rewards generally offered to our U.S.-based officers. We do not provide special pension benefits or other non-performance-based entitlements to the NEOs that are inconsistent with our compensation philosophy.
Preview of Key Fiscal 2017 Compensation Decisions
In fiscal 2016, we continued to make progress in our transformation journey. It marked the second year in a row that we increased our domestic revenue and expanded our operating margins. We saw a continued improvement in customer satisfaction as our Net Promoter Score (including both purchasers and non-purchasers) improved by more than 300 basis points and we grew online revenue 13% to more than $4 billion, or 11% of total domestic revenue. We also delivered $150 million against our $400 million cost reduction and gross profit optimization efforts, which was in addition to the $1 billion in costs we already removed from our business since fiscal 2013.
Our fiscal 2016 performance resulted in modest compensation changes, a summary of which is included below:
Base Salaries: We made slight increases to the base salary rates for two of the NEOs in light of the scope of their roles and responsibilities.
Short-Term Incentives: We made no changes to the short-term incentive plan target payout percentages for the NEOs.
Long-Term Incentives: Our long-term incentive program changes focused on changing the “mix” of vehicles for the NEOs, other than the CEO, to reflect the stage of growth Best Buy is in currently and to promote performance and retention of key leadership. For fiscal 2017, the mix will be 50% time-based restricted shares and 50% performance share awards. We also added a performance requirement to the time-based restricted shares granted to our top executives to further align their interests with the shareholders’ interests.
Other Compensation: No material changes were made to the employee benefits, perquisites or other rewards offered to our NEOs.
Compensation Discussion and Analysis
Compensation Philosophy, Objectives and Policies
The Company’s compensation philosophy is to align executive compensation with shareholders’ interests. To that end, the Compensation Committee works to ensure that base salaries are market competitive, and short- and long-term incentives are heavily weighted toward Company performance and are within the range of market practice.
We achieve these objectives by using programs that are designed to align employee interests with Company goals and create a common vision of success without undue risk.
We utilized the following executive compensation policies and practices during fiscal 2016:
Pay-for-performance. We tie pay to performance. The majority of executive pay is not guaranteed but instead is tied to performance metrics designed to drive shareholder value. If performance goals are not attained, no incentive compensation is paid.
Mitigate undue risk. We mitigate undue risk by, among other things, utilizing caps on incentive award payments and vesting periods on potential equity payments, clawback provisions, restrictive covenants and multiple performance metrics. The Compensation Committee annually reviews our compensation risk profile to ensure that our compensation-related risks are not reasonably likely to have a material adverse effect on the Company.
Independent Compensation Committee and Committee Consultant. The Compensation Committee is comprised solely of independent directors. The Compensation Committee's independent compensation consultant is retained directly by the Compensation Committee and performs no other consulting or other services for the Company.
Shareholder engagement. We routinely engage with shareholders regarding executive compensation and related issues.
Re-pricing of stock options. Stock options may not, without the approval portion of our shareholders, be (i) amended to reduce their initial exercise price (except for adjustments inproxy statement includes the case of a stock split or similar event); (ii) canceled and replaced by stock options having a lower exercise price; or (iii) canceled and replaced with cash or other securities.following:
Stock ownership and trading policies. We have stock ownership guidelines for all of our executive officers. As of the end of fiscal 2016, each NEO was in compliance with the guidelines. We prohibit all employees, including the NEOs and members of the Board, from hedging Company securities. Executive officers and Board members are also prohibited from pledging Company securities as collateral for a loan or from holding Company securities in a margin account.
NEOs' benefits. Our executive officers, including the NEOs, generally receive the same employee benefits as other officers. We do not have an executive retirement plan that provides extra benefits to the NEOs.
Governance
The following table summarizes the roles of each of the key participants in the executive compensation decision-making process for our NEOs.
| Executive Summary | | | Highlights of our executive compensation program, including our shareholder engagement process and Committee consideration of Say on Pay votes, and a summary of our fiscal 2022 executive compensation decisions | | Key Participant | Compensation Philosophy, Objectives & Policies | | | | Compensation Committee | | | | | Role in Decision-Making Process | Establishes our compensation objectives. | | Determines, approves and oversees executive compensation, includingOverview of the design, competitiveness and effectiveness of our compensation programs. Also oversees the development, evaluation and approval of incentive compensation, equity-based pay and other material employee benefit plans for all employees. The Compensation Committee may delegate its responsibility to oversee compensation employees other than for the NEOs or other Section 16 officers. | | The Compensation Committee's charter is available on our website at www.investors.bestbuy.com.
| | Compensation Committee's Independent Compensation Consultant | Role in Decision-Making Process | Reviews the recommendations of management with the Compensation Committee to ensure that the recommendations are aligned with our objectives and are reasonable when compared to our market for executive and director talent. | | Assistsphilosophy, objective & policies utilized by the Compensation Committee in the designimplementing our executive compensation program | | | Governance | | | Summary of the variable incentive plans, the determination of the overallkey participants in our executive compensation mix, the selection of performance metricsprocess and the setting ofrole each plays in the performance goals and ranges.decision-making | | | Provides analysis and crafts recommendations for the Compensation Committee in the setting of CEO compensation opportunity. | | Reviews the results of the compensation risk assessment with the Compensation Committee and identifies key takeaways. | | Provides perspective on market practice and information about emerging trends. | | The Compensation Committee has sole discretion and adequate funding to engage consultants in connection with compensation-related matters. Frederic W. Cook & Co., Inc. has served as the Compensation Committee's independent compensation consultant since the fall of 2012. | | CEO | | | | | Role in Decision-Making Process | Creates and presents recommendations to the Compensation Committee for our other executive officers and provides his perspective. Does not participate in or otherwise influence recommendations regarding his own compensation. | | | | | | Human Resources ("HR") | | | | | Role in Decision-Making Process | Provides the Compensation Committee with market analytics in support of the CEO's recommendations for our executive officers, other than the CEO. Management does not make recommendations on CEO compensation. As necessary, HR engages outside consultants, including Willis Towers Watson & Co. for fiscal 2016, to assist with its analytics and recommendations. | | Finance | Role in Decision-Making Process | Provides the Compensation Committee with financial analytics in support of the short- and long-term program design and target setting. |
Compensation Consultant Independence
The Compensation Committee reviewed the independence of Frederic W. Cook & Co., Inc. under NYSE and SEC listing standards. Based on its review and information provided by Frederic W. Cook & Co., Inc. regarding the provision of its services, fees, policies and procedures, presence (if any) of any conflicts of interest, ownership of Best Buy stock, and other relevant factors, the Compensation Committee concluded that the work of Frederic W. Cook & Co., Inc. has not raised any conflicts of interest and it is deemed to be an independent advisor to the Compensation Committee.
Factors in Decision-Making | | | Overview of factors considered by the Compensation Committee in its decision-making process
| | | Market Competitive Data. For fiscal 2016,Executive Compensation Elements
| | | Description of each element of compensation and the level of total direct compensation for our NEOs was considered against market benchmarks and views of individual performance. Our Compensation Committee reviewed publicly available compensation data for our peer group of companies, Fortune 100 companies and general industry survey data. We used available information and monitored actions taken by our peer group to evaluate market trends and to assess the long-term incentive and overall competitiveness ofNEO pay mix within our executive compensation levels. We did not, however, seekprogram, including specific details regarding decisions made within each element | |
| | | | | | | | | | | | | | | | | | | 47 | | | | | | 2022 Proxy Statement |
TABLE OF CONTENTS After an unusual year in fiscal 2021 where the Compensation Committee adapted its compensation oversight and decision-making process to align with the rapidly evolving state of the business, fiscal 2022 brought stability and a return to the Committee’s well-established approach to executive compensation. Actions such as temporary pay reductions and annual incentive plan modifications were replaced by the regular annual process of NEO pay review and a full-year annual incentive pay opportunity based upon financial metrics. Fiscal 2022 included a leadership change due to the departure of our former Chief Operating Officer, Mike Mohan, in June 2021. This departure led to some additional compensation actions for some of our NEOs as a result of increases in responsibility. Even as the COVID-19 pandemic continued to present challenges, the Company remained committed to making progress on our purpose to enrich lives through technology. We do that by leveraging our unique combination of tech expertise and human touch to meet our customers’ every day needs whether they come to us online, visit our stores or invite us into their homes. The financial results we achieved in fiscal 2022, as summarized below, demonstrate that we were able to deliver strong results by executing on our strategies. *
| For GAAP to establish any specific elementnon-GAAP reconciliations, please refer to the schedule entitled Reconciliation of Non-GAAP Financial Measures. |
The strong performance in fiscal 2022 resulted in short-term incentive award payouts of 183% of the target. See the Executive Compensation Elements—Short-Term Incentive section for our description of our fiscal 2022 STI plan. The results of the Enterprise Revenue and Total Shareholder Return (“TSR”) portions of the Performance Share Awards that are earned based on a three-year performance period, including fiscal 2022, have not been approved by the Compensation Committee as of the date of this filing. The Enterprise Revenue portion of these awards is based on the compound annual growth rate of Enterprise Revenue for fiscal 2020 through fiscal 2022. The TSR portion of these awards is based on a comparison of TSR in the first quarter of fiscal 2020 with the first quarter of fiscal 2023. We anticipate the Compensation Committee will review results and make a determination on the payout of these awards following the conclusion of the first quarter of fiscal 2023. These awards and payouts are explained in further detail within the Executive Compensation Elements section of this proxy statement. As the Company looks ahead in fiscal 2023, the Committee and management are continuing to balance the need to attract, motivate and retain executive talent through performance-based compensation with an enduring focus on the Company’s long-term strategy. This requires focus on a multi-year view of performance against the Company’s long-term plans to avoid compensation outcomes driven by temporary external factors, and we remain committed to delivering on our three-year commitments even in the face of unprecedented uncertainties. | | | | | | | | | | | | | | | | 2022 Proxy Statement | | | 48 | | | | | | |
TABLE OF CONTENTS Prior “Say on Pay” Votes We are also pleased that 94.1% of the votes cast on the advisory “Say on Pay” proposal at the 2021 Meeting of shareholders were voted in favor of our executive compensation program. We believe the high level of support we received from shareholders for the last several years is driven by our performance and by our continued commitment to align pay and performance. In the fall of fiscal 2022, following our 2021 Meeting, we reached out to our top forty shareholders, representing approximately 64% of our outstanding shares, offering to discuss any questions or concerns regarding our executive compensation and governance practices, our diversity and inclusion and ESG initiatives and related disclosure. As a result of these outreach efforts, we engaged in direct conversations with several shareholders to answer questions, provided commentary on the compensation decisions made during the year, and received feedback to be considered when making future decisions. During these conversations, shareholders also indicated broad directional support for our compensation programs. Further, as discussed in the Corporate Governance at Best Buy — Shareholder Engagement section, we regularly engage with our shareholders throughout the year regarding their various priorities, and we welcome their feedback on our practices and policies. Compensation Philosophy, Objectives and Policies The Company’s compensation philosophy is performance-based and designed to ensure that executive compensation and shareholders’ interests are aligned. To that end, the Compensation Committee works to ensure that base salaries are market competitive, and short- and long-term incentives are heavily weighted toward Company performance and are within the range of market practice. We achieve these objectives by using programs that are designed to align employee interests with Company goals and create a common vision of success without undue risk. We continue to utilize the following executive compensation policies and practices: Pay-for-performance. We tie pay to performance. The majority of executive pay is not guaranteed but instead tied to performance metrics designed to drive shareholder value. We use multiple performance metrics that differ for long-term and short-term plans. A significant amount of our long-term incentive program is performance-based, and long-term and short-term incentives comprise a majority of our total compensation opportunity. Mitigate undue risk. We mitigate undue risk by, among other things, utilizing caps on incentive award payments and vesting periods on long-term incentive awards, clawback provisions, restrictive covenants and multiple performance metrics. The Compensation Committee annually reviews our compensation risk profile to ensure that our compensation-related risks are not reasonably likely to have a material adverse effect on the Company. | | | | | | | | | | | | | | | | | | | 49 | | | | | | 2022 Proxy Statement |
TABLE OF CONTENTS Independent Compensation Committee and compensation consultant. The Compensation Committee is comprised solely of independent directors. The Compensation Committee’s independent compensation consultant is retained directly by the Compensation Committee and performs no other consulting or other services for the Company. Shareholder engagement. We routinely engage with shareholders regarding executive compensation and related issues. We provide shareholder feedback to the Compensation Committee, which considers the feedback when reviewing executive compensation programs and policies. Re-pricing of stock options. Stock options may not, without the approval of our shareholders, be (i) amended to reduce their initial exercise price (except for adjustments in the case of a stock split or similar event); (ii) cancelled and replaced by stock options having a lower exercise price; or (iii) cancelled and replaced with cash or other securities. Stock ownership and trading policies. We have stock ownership guidelines for all of our executive officers and Board members. As of the end of fiscal 2022, each NEO and director was in compliance with the guidelines. We prohibit all employees, including our executive officers and members of the Board, from hedging Company securities. Executive officers and Board members are also prohibited from pledging Company securities as collateral for a loan or from holding Company securities in a margin account. Health, retirement and other benefits. NEOs are eligible to participate in benefit plans generally available to our employees, including health, retirement, stock purchase, severance, paid time off, life insurance and disability plans. We do not have an executive retirement plan that provides extra retirement benefits to the NEOs. NEOs are provided with annual executive physical exams, supplemental long-term disability insurance and tax planning/preparation services consistent with those provided to other executives. The following table summarizes the roles of each of the key participants in the executive compensation decision-making process for our NEOs. | Key Participant | | | Compensation Committee | | | Role in Decision-Making Process | | | • Establishes our compensation or total directobjectives. | | | | | | • Determines, approves and oversees executive compensation, including the design, competitiveness and effectiveness of our compensation programs. | | | | | | • The Compensation Committee’s charter is available on our website at www.investors.bestbuy.com. | | | | | | Compensation Committee’s Independent Compensation Consultant | | | Role in Decision-Making Process | | | • Reviews the recommendations of management with the Compensation Committee to ensure that falls within a prescribed range relativethe recommendations are aligned with our objectives and are reasonable when compared to our peer groupmarket for executive and director talent. | | | | | | • Assists the Compensation Committee in the design of companies or the Fortune 100 companies.variable incentive plans, the determination of the overall compensation mix, the selection of performance metrics and the setting of the performance goals and ranges. | | |
| | | Change• Provides analysis and crafts recommendations for the Compensation Committee in Peer Group for Fiscal 2016. We review our peer group annually.the setting of CEO compensation opportunity.
| | | | | | • Reviews the results of the compensation risk assessment with the Compensation Committee, including key observations and conclusions. | | | | | | • Provides perspective on market practice and information about emerging trends. | | | | | | • The Compensation Committee striveshas sole discretion and adequate funding to ensure thatengage consultants in connection with compensation-related matters. Frederic W. Cook & Co., Inc. has served as the Compensation Committee’s independent compensation consultant since the fall of 2012. | |
| | | | | | | | | | | | | | | | 2022 Proxy Statement | | | 50 | | | | | | |
TABLE OF CONTENTS | | | | CEO | | | Role in Decision-Making Process | | | • Creates and presents recommendations to the Compensation Committee for our peer group is an accurate reflection of our business model, representsother executive officers and provides her own perspective. Does not participate in, or otherwise influence, recommendations regarding her own compensation. | | | | | | Human Resources (“HR”) and Finance | | | Role in Decision-Making Process | | | • HR provides the laborCompensation Committee with market for executive talent and includes external perspectives. For 2016, the peer group was approved after considerationanalytics in support of the following criteria:
Business model: combinationCEO’s recommendations for our executive officers. As necessary, HR engages outside consultants to assist with its analytics and recommendations. Finance provides the Compensation Committee with financial analytics in support of physical retailers, e-commerce retailers, digital companies, global companiesthe short- and iconic brands;
Size: revenue similar to ours;
Current peers: preference, but not obligation, toward consistency in an effort to maintain reliability from year to year in the resultslong-term program design, target setting and evaluation of our compensation analysis; andresults.
Labor market consideration: companies that listed us as a peer.
There were no changes to our peer group for fiscal 2016 from fiscal 2015. For fiscal 2016,
| |
Compensation Consultant Independence The Compensation Committee reviewed the independence of Frederic W. Cook & Co., Inc. (“FW Cook”) under NYSE and SEC rules. Based on its review and information provided by FW Cook regarding the provision of its services, fees, policies and procedures, presence (if any) of any conflicts of interest, ownership of Best Buy stock and other relevant factors, the Compensation Committee concluded that the work of FW Cook has not raised any conflicts of interest and deemed them to be an independent advisor to the Compensation Committee. Factors in Decision-Making Market Competitive Data. For fiscal 2022, each element of compensation and the level of total direct compensation for our NEOs were considered against market benchmarks and views of individual performance. Our Compensation Committee reviewed publicly available compensation data and private surveys for our peer group of companies, Fortune 100 companies and general and retail industry survey data. We used available information and monitored actions taken by our peer group to evaluate market trends and to assess the long-term incentive program and overall competitiveness of our executive compensation levels. We did not, however, seek to establish any specific element of compensation or total direct compensation that falls within a prescribed range relative to our peer group of companies or the Fortune 100 companies. Change in Peer Group for Fiscal 2022. We review our peer group annually. The Compensation Committee strives to ensure that our peer group is an accurate reflection of our business model, represents the labor market for executive talent and includes external perspectives. For fiscal 2022, the peer group was approved after consideration of the following criteria: Business model: combination of physical retailers, e-commerce retailers, digital companies, global companies and iconic brands; Size: revenue similar to ours; Current peers: preference, but not obligation, toward consistency in an effort to maintain reliability from year to year in the results of our compensation analysis; and Labor market consideration: companies that listed us as a peer. The Compensation Committee considered the Company’s position relative to the peer group on the basis of earnings, revenue and market cap, and made no changes to our peer group for fiscal 2022 from fiscal 2021 other than the removal of DaVita Inc. For fiscal 2022, our peer group consisted of the following companies: | Amazon.com, Inc. | | | The Home Depot, Inc. | | | Nordstrom, Inc. | | | CarMax, Inc. | | | Kohl’s Corporation | | | Target Corporation | | | CDW Corporation | | | Lowe’s Companies Inc. | | | Wal-Mart, Inc. | | | CVS Health Corporation | | | Macy’s, Inc. | | | Walgreens Boots Alliance, Inc. | | | eBay Inc. | | | Nike, Inc. | | | | |
| | | | | | | | | | | | | | | | | | | 51 | | | | | | 2022 Proxy Statement |
| | | | Amazon.com, Inc. | The Home Depot, Inc. | Nordstrom, Inc. | Apple Inc. | Kohl's Corporation | Office Depot, Inc. | Costco Wholesale Corporation | Lowe's Companies Inc. | Staples, Inc. | eBay Inc. | Macy’s, Inc. | Target Corporation | Alphabet Inc. | Microsoft Corporation | Wal-Mart Stores, Inc. | (formerly known as Google Inc.) | Nike, Inc. | Walgreen Co. |
At the time of the analysis, relative to the 17 companies, the Company was competitive on revenue and earnings measures.
Executive Compensation Elements
Overview. Our NEOs' compensation in fiscal 2016
TABLE OF CONTENTS Executive Compensation Elements Overview. Our NEOs’ compensation in fiscal 2022 included the following elements (for additional details on specific awards, see the discussion below and the Compensation of Executive Officers — Summary Compensation Table section): | Base Salary | | | Cash; reviewed annually and adjusted if appropriate. | | | Provide competitive, fixed compensation to attract and retain executive talent who drive superior performance. | | | Consider individual contributions to business outcomes, scope and responsibilities, role changes and/or market data. | | | Short-Term Incentive
| | | | | | | | Compensation Component | | Key Characteristics | | Purpose | | Principal Fiscal 2016 Actions | Base Salary | | Cash; reviewed annually and adjusted if appropriate. | | Provide competitive, fixed compensation to attract and retain executive talent. | | Base compensation increases for Messrs. Mohan and Nelsen and Ms. Ballard due to market factors. | Short-Term Incentive
("STI")
| | Cash. Variable compensation component. Performance-based award opportunity. Payable based on financial metrics. | | Create a strong financial incentive for achieving or exceeding Company goals. | | STI target percentage payout increases for Ms. Ballard and Mr. Mohan from 125 to 150%. Financial metrics for fiscal 2016 were enterprise comparable sales, enterprise operating income, North America “waste and efficiency,” U.S. online revenue growth and U.S. net promoter score. The NEOs received payouts equal to 162% of target. | Long-Term Incentive
("LTI")
| (“STI”) | | | Cash. Variable compensation component. Performance-based award opportunity. | | | Incentive targets are tied to the achievement of key measures tied to our long-term strategy. | | | Metrics are selected based on key components of the Company’s strategic plan. Fiscal 2022 metrics were:
• Enterprise Operating Income – 33.33%
• Enterprise Revenue – 33.33%
• Shared Success – 33.34% | | | Long-Term Incentive (“LTI”) | | | Performance share awards, stock options and restricted shares, subject to certain performance-conditions and/or time-based vesting requirements. | | | Create a strong financial incentive for increasing shareholder value, encourage ownership stake, and promote retention. | | | Grant award levels are based on individual contributions to business outcomes, potential future contributions, historical grant amounts, retention considerations and market data. (Actual payout typically based on performance over the three-year performance period.) | | | Health, Retirement and Other Benefits | | | Performance share awards, stock options and time-based restricted shares.
| | Create a strong financial incentive for increasing shareholder value, encourage ownership stake, and promote retention.
| | LTI changes included increased targets for the NEOs to reflect market practice and promote retention of key leadership, and a one-time award for Ms. Ballard to align with market rates, the increased scope of her responsibilities and impact of her contributions over the past several years. | Health, Retirement and Other Benefits | | Eligibility to participate in benefit plans generally available to our employees, including health, retirement, stock purchase, severance, paid time off, life insurance and disability plans. | | | Plans are part of our broad-based employee benefits programs designed to promote health, well-being and financial security for all employees. | | | The NEOs are eligible to participate in benefit plans generally available to our employees, including health, retirement, stock purchase, severance, paid time off, life insurance and disability plans. | | Plans are part of our broad-based employee benefits program. | | No material changes were made to the NEOs' health, retirement and other benefits in fiscal 2016. | Executive Benefits | | Annual executive physical exam, supplemental long-term disability insurance, and tax planning/preparation services. | | Provide competitive benefits to promote the health, well-being and financial security of our executive officers. | | No material changes were made to the NEOs' benefits in fiscal 2016. |
Fiscal 2016 Pay Mix. The Compensation Committee emphasizes variable performance-based pay when setting the target pay mix for our executive officers, but does not establish a set pay mix for them. The target pay mix for fiscal 2016 for our CEO and other NEOs, on average, is shown below. Actual salary levels, STI awards (discussed in further detail in the Short-Term Incentive section)same employee benefits offered to all U.S.-based officers.
| | | Executive Benefits | | | Annual executive physical exam, supplemental long-term disability insurance, and LTI awards (discussed in further detail in the Long-Term Incentive section) vary based on the market analysis described above. Approximately 90%tax planning/preparation services. Limited personal use of the CEO’s target pay and, on average, 80% of the other NEOs’ target payprivate jet services is variable based on operating performance, changes in our stock price and/or total shareholder return relative to the S&P 500 companies.
Each element in the pay mix is discussed below and shown in the Summary Compensation Table as found in the Compensation of Executive Officers section of this proxy statement.
In March 2015, the Compensation Committee reviewed the total compensation for each NEO, including their base salaries. Based on the stage of the Company's transformation and its assessment of each officer relative to market data, the Compensation Committee approved base salary increases for Ms. Ballard and Messrs. Mohan and Nelsen due to market factors and in recognition of each of their changing positions or continued growth in their respective roles.
| | | | | | | | | | | | Name | | Fiscal 2016 Annual Base Salary |
| | Fiscal 2015 Annual Base Salary |
| | Percent Change | Mr. Joly | | $ | 1,175,000 |
| | $ | 1,175,000 |
| | 0% | Ms. McCollam | | $ | 925,000 |
| | $ | 925,000 |
| | 0% | Ms. Ballard | | $ | 800,000 |
| | $ | 700,000 |
| | 14% | Mr. Mohan | | $ | 800,000 |
| | $ | 700,000 |
| | 14% | Mr. Nelsen | | $ | 650,000 |
| | $ | 550,000 |
| | 18% |
Our executive compensation programs are designed to ensure that a significant percentage of total compensation is linked to Company performance. For fiscal 2016, the NEOs were eligible for performance-based, short-term incentive cash awards pursuant to our fiscal 2016 STI.
The fiscal 2016 STI is structured as a “plan within a plan,” pursuant to the 2011 shareholder approved Executive Short-Term Incentive Plan (“Executive STI Plan”). The Executive STI Plan sets the maximum award poolpermitted for the CEO and, threewith the CEO’s authorization, other Company employees, including each of our NEOs, (excludingin accordance with our private jet use policy.
| | | Provide competitive benefits to promote the CFO) at 5%health, well-being and financial security of adjusted net earningsour executive officers. | | | No material changes were made to align compensation with shareholder interests. Individual allocations of that pool are set annually. Specific performance goals are established such that the maximum payout potential does not exceed the maximum award pool or the individual allocations. Fiscal 2016 STI Performance Criteria. In January 2015, the Compensation Committee approved the performance criteria for the fiscal 2016 STI. For fiscal 2016, the Compensation Committee approved generally the same performance metrics asNEOs’ benefits in fiscal 2015, with some refinement2022 other than the adoption of the Renew Blue Priorities, as those metrics continueda revised private jet use policy. All NEOs are eligible to support our fiscal 2016 Renew Blue priorities, specifically operating income, stabilizing comparable sales, US online revenue growth, and customer experience. The weightingparticipate in these benefits, except that use of the priorities, whichprivate jet services is also consistent with fiscal 2015, placed the greatest emphasis on profit and revenue growth while also giving significant weight to our fiscal 2016 Renew Blue strategic priorities.
The metrics and their respective weights were:
| | | | | | STI Metric | | Metric Weighting | | Definition | Compensable Enterprise Operating Income | | 50%. Served as the minimum threshold for STI awards to be paid | | Enterprise revenue less Enterprise cost of goods sold less Enterprise SG&A expenses. | Enterprise Comparable Sales | | 20% | | Domestic revenue at websites, stores, and call centers operating for at least 14 full months, compared to revenue from similar channels open at least 14 full months in the prior fiscal year. | Renew Blue Priorities: | | | | | Waste and Efficiency(1)
| | 10% | | Annualized net year-over-year cost savings (gross savings less reinvestment, compared to fiscal 2015 expense) of cost reduction actions put into effect in fiscal 2016. | U.S. Online Revenue Growth | | 10% | | Total fiscal 2016 online revenue less total fiscal 2015 online revenue divided by total fiscal 2015 online revenue. | U.S. Net Promoter Score | | 10% | | Customer experience metric in which customers (both purchasers and non-purchasers) are asked how likely they are to recommend Best Buy to a friend, colleague or family member; the percent of those likely to recommend less the percent of those unlikely to recommend is Net Promoter Score. |
(1) The Waste and Efficiency metric replaced North America Cost Take Out, which was a Renew Blue Priority and STI metric in fiscal 2015.
In March 2015, the Compensation Committee approved the performance goals for each metric. The minimum, target and maximum goals for each metric were evaluated in order to ensure they would incent the desired level of performance for each priority. For some metrics, this evaluation resulted in changeslimited to the minimum, target, and max goalsCEO in light of anticipated year-over-year industry trends, product cycles, and other market factors. In September 2015, the Compensation Committee approved an adjustment to the Enterprise Comparable Sales metric to remove consideration of our International business to be consistentaccordance with our external reporting metrics, which were changed primarily because ofprivate jet use policy, unless such use by another NEO is authorized by the current ongoing transformation in Canada. As such, the Enterprise Comparable Sales metric includes revenue at websites, stores and call centers in the U.S. only. This adjustment led to an increase in the target level for Enterprise Comparable Sales.CEO.
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| | | | | | | | | | | | | The following chart shows actual fiscal 2016 performance compared to the minimum, target and maximum goals for each metric. The chart also includes the same information from fiscal 2015 (as presented in last year’s proxy statement) in order to illustrate how the goals changed and how our actual performance compared to last year.
| | | 2022 Proxy Statement | | | 52 | | | | | | |
TABLE OF CONTENTS Fiscal 2022 Pay Mix. The Compensation Committee emphasizes variable performance-based pay when setting the target pay mix for our executive officers but does not establish a set pay mix for them. The target pay mix for fiscal 2022 for our CEO and other NEOs, on average, is shown below. Actual salary levels, STI awards (discussed in further detail in the Short-Term Incentive section) and LTI awards (discussed in further detail in the Long-Term Incentive section) vary based on the market analysis described above. Approximately 90% of the CEO’s target pay and, on average, approximately 74% of the other NEOs’ target pay is variable based on operating performance, changes in our stock price and/or total shareholder return relative to the S&P 500 companies. Each element in the pay mix is discussed below and shown in the Summary Compensation Table as found in the Compensation of Executive Officers section of this proxy statement. Base Salary In March 2021, the Compensation Committee reviewed the total compensation for each NEO. The Compensation Committee approved base salary increases for Ms. Barry and Ms. Scarlett, and Messrs. Bilunas, Bonfig and Harmon based on role, responsibilities and relevant market data. | Ms. Barry | | | $1,300,000 | | | $1,160,000 | | | 12.1% | | | Mr. Bilunas | | | 800,000 | | | 775,000 | | | 3.2% | | | Mr. Bonfig | | | 650,000 | | | 625,000 | | | 4.0% | | | Mr. Harmon | | | 625,000 | | | 550,000 | | | 13.6% | | | Ms. Scarlett | | | 875,000 | | | 800,000 | | | 9.4% | |
| | | | | | | | | | | | Metric ($ in millions) | | Minimum | | Target | | Max | | Actual Result | | Metric Score | Compensable Enterprise Operating Income (50%)(1)(2) | | $1,408 | | $1,498 | | $1,678 | | $1,610 | | 1.62 | Fiscal 2015 Compensable Enterprise Operating Income (50%)(1)(3)
| | $1,163 | | $1,353 | | $1,533 | | $1,523 | | 1.94 | Enterprise Comparable Sales (20%)(4) | | (0.06)% | | 0.4% | | 1.32% | | 0.9% | | 1.54 | Fiscal 2015 Enterprise Comparable Sales (20%)
| | (1.0)% | | 0.52% | | 1.44% | | .44% | | 0.91 | Renew Blue Priorities: | | | | | | | | | | | Waste and Efficiency (10%) | | $100 | | $120 | | $160 | | $154 | | 1.83 | Fiscal 2015 North America Cost Take Out (10%)(5)
| | $360 | | $410 | | $460 | | $438 | | 1.56 | U.S. Digital Revenue Growth (10%) | | 5.95% | | 10.95% | | 20.95% | | 13.24% | | 1.22 | Fiscal 2015 U.S. Digital Revenue Growth (10%)
| | 20% | | 30% | | 40% | | 16.5% | | — | U.S. Net Promoter Score(6) (10%) (for purchasers and non-purchasers) | | 35.4 | | 35.7 | | 36.4 | | 38.5 | | 2.00 | Fiscal 2015 U.S. Net Promoter Score (10%) (for purchasers and non-purchasers) | | 35.5 | | 36.5 | | 38.5 | | 34.8 | | — | | | | | Fiscal 2016 Blended Score: | | 1.62 | | | | | Fiscal 2015 Blended Score: | | 1.31 |
| | (1) | Actual performance for this metric had to be above the minimum threshold in order for STI payments to be made. A result lower than the minimum threshold would have resulted in an overall blended score of zero, and no STI payments. | | | | | | | | | | | | | | | | | | | 53 | | | | | | 2022 Proxy Statement |
| | (2) | Compensable Enterprise Operating Income was determined based on the non-GAAP operating income from continuing operations of $1,566 million in our fiscal 2016 Annual Report on Form 10-K, adjusted for differences from budgeted foreign exchange rates and adjusted for the impact of the Canadian brand consolidation. |
| | (3) | Compensable Enterprise Operating Income was determined based on the non-GAAP operating income from continuing operations of $1,497 million in our fiscal 2015 Annual Report on Form 10-K, adjusted for differences from budgeted foreign exchange rates and adjusted to include the impact of Five Star (a former Chinese subsidiary) prior to December 3, 2014 (the date the Company entered into a definitive agreement to sell Five Star to a third party). |
| | (4) | The goal of keeping the target for this metric near 0.0% was to halt the historical consumer electronics industry decline over the last several years. |
| | (5) | North America Cost Takeout was a fiscal 2015 Renew Blue Priority and was defined as total cost of goods sold and selling, general and administrative expense reduction initiatives approved and executed during the year, measured as an annualized value. In fiscal 2016, the goal was replaced by Waste and Efficiency, as defined above. |
(6) U.S. Net Promoter score is a customer experience metric that measures a customer’s likelihood to recommend Best Buy and is one of many standard industry metrics for measuring customer satisfaction. Methods of measuring U.S. Net Promoter Score can differ widely among different retailers, with many retailers measuring only purchaser satisfaction; however, we measure both purchasing and non-purchasing customers across our sales channels and therefore our total score may be lower than other companies as non-purchaser results are materially lower than those of purchasers.
Determination of Fiscal 2016 STI Target Payout. The Compensation Committee reviewed the target payout percentages for our NEOs under the fiscal 2016 STI plan as part of their review of the NEOs’ total fiscal 2016 target compensation. The Compensation Committee generally applies a tiered approach in determining the potential target payout ranging from 100% to 200% of eligible base salary based on each NEO's eligible earnings as of the 15th day of each fiscal month.
TABLE OF CONTENTS Short-Term Incentive Our executive compensation programs are designed to ensure that a significant percentage of total compensation is linked to Company performance. The Compensation Committee reviewed the target payout percentages for our NEOs under the fiscal 2022 STI plan as part of its review of the NEOs’ total fiscal 2022 target compensation in March 2021. The Compensation Committee generally applies a tiered approach in determining the potential target payout ranging from 100% to 200% of annual earnings. The specific target payout percentage for each NEO is determined based on external market data (including survey and proxy data from the Fortune 100 and our peer group) for equivalent roles, with emphasis placed on job value and internal pay equity among the NEOs. The target payout percentages for each NEO either remained the same as in fiscal 2021 or increased in light of changes in responsibilities and market factors. | Ms. Barry | | | 200% | | | 200% | | | Mr. Bilunas | | | 150% | | | 150% | | | Mr. Bonfig | | | 100% | | | 100% | | | Mr. Harmon(1) | | | 75% | | | 100% | | | Ms. Scarlett | | | 150% | | | 150% | |
(1)
| The STI target payout percentage for each NEO is determinedMr. Harmon was increased during fiscal 2022 based on external market data (including survey and proxy data from the Fortune 100 and our peer group) for equivalent roles, with emphasis placed on job value and internal pay equity among the NEOs.
For fiscal 2016, the tiered target opportunities were 100% to 200% of salary. The target payout percentages for each NEO remained the same as in fiscal 2015 except for Mr. Mohan, who received an increase target payout percentage from 125% in fiscal 2015 to 150% in fiscal 2016 in recognition of his continued progresschanges in his role and Ms. Ballard, who receivedresponsibilities.
|
Fiscal 2022 STI Performance Criteria. Metrics were selected based on key components of the Company’s strategic plan. The following performance metrics determined the payouts for the fiscal 2022 STI plan: | Compensable Enterprise Operating Income | | | 33.33% | | | Enterprise non-GAAP operating income, adjusted for foreign exchange rate variances. | | | Enterprise Revenue | | | 33.33% | | | Enterprise Revenue includes all revenue streams, including stores that recently opened or closed as well as mergers and acquisitions. | | | Shared Success | | | 33.34% | | | Continue to reinforce the decision-making process adopted by senior leadership and the Board to manage the Company during the COVID-19 crisis. The fiscal 2022 framework was comprised of three pillars: employee and customer safety, financial strength, and strategic progress. | |
In light of the Company’s ability to effectively adapt to the challenges presented by the COVID-19 pandemic, as well as the fiscal 2021 performance results, the Committee elected to return to a plan design concentrated on financial performance metrics. The ongoing need for flexibility, collaboration and prioritization of needs supported the continued inclusion of a flexible Shared Success component as a smaller portion of the plan. In March 2021, the Compensation Committee approved the performance goals for each of the financial metrics. The minimum, target and maximum goals for each metric were evaluated to ensure they would incentivize the desired level of performance for each priority. The goals are set each year considering anticipated year-over-year industry trends, product cycles and other market factors. At the time the performance goals were set for Enterprise Operating Income and Enterprise Revenue, the Company had completed a successful fiscal 2021 but was still facing a challenging environment due to the level of uncertainty about the year ahead. These short-term pressures were balanced against our multi-year financial commitments communicated to shareholders. | | | | | | | | | | | | | | | | 2022 Proxy Statement | | | 54 | | | | | | |
TABLE OF CONTENTS The Shared Success framework was carried over from fiscal 2021 as one component of the plan to reinforce the flexible decision-making process adopted by senior leadership and the Board to manage the Company during the pandemic. This framework for fiscal 2022 centered on three pillars: employee and customer well-being, financial strength and strategic progress. | As the business continues to evolve in an increaseenvironment shaped by the pandemic, we maintain an explicit focus on the safety and well-being of our customers and employees. | | | We have accelerated progress against our long-term financial goals; while we will need to recalibrate our expectations for performance this year, the foundational elements of our financial success will continue to center on evolving our operating model and store portfolio, removing cost from the business and prioritizing strategic investments. | | | The environment has not changed our strategy, it has pushed us to go faster. We will judge our success in target payout percentagedelivering progress on our strategies. | |
Relative weightings for the three pillars and specific objectives under each pillar were purposefully flexible to encourage creative decision-making as environmental conditions evolved. The Committee charged management with updating the Committee on actions taken and results throughout fiscal 2022 relative to this framework. At the end of fiscal 2022, management presented its summary of actions taken throughout the year and a recommendation for the Shared Success Score. The Board was proud of the Company’s ability to continue to navigate the extraordinary environment while delivering for our customers, employees and shareholders. In discussing the Shared Success Score, the Committee focused on the following key results: Employee & Customer Well-Being. For our customers, we enabled measures to lessen the risks of human interaction (e.g., curbside, no-contact delivery) for customers and proactively communicated the bilateral safety expectations. We also implemented a free COVID-19 testing program for employees to ensure safer interactions for our customers and provided incentives for Best Buy employees to get vaccinated. For our employees, we invested in paid leave; invested in Wellthy Concierge Service, which provides personalized help for our employees in times of need (e.g., emergency housing, substance abuse help and complex eldercare issues); created the HOPE fund in partnership with the Richard M. Schultze Family Foundation, which provides for employees in hardship situations; and invested heavily in COVID-19 support. Financial Strength. Building from the momentum started in fiscal 2021, we continued to pilot and experiment with new store portfolio approaches with the goal of serving customers with better omni-channel experiences with a lower cost to serve them. We have been progressing with a series of experiments at both the store and market level. Followed up $500 million in savings delivered in fiscal 2021 with an additional $200 million of domestic cost transformation in fiscal 2022. Strategic Progress. Prioritizing the capacity to invest in our longer-term growth is essential to our longer-term success. Examples of our strategic investments in fiscal 2022 include: ○ | The purchase of Current Health, which provides Best Buy Health key capabilities needed to deliver in home care; |
○ | The purchase of Yardbird, which expands our sales into a growing adjacent category and ultimately will provide opportunities to deliver more comprehensive solutions to customers; |
○ | The launch of Totaltech to deepen the relationships we have with our customers to drive greater spend and loyalty with Best Buy; and |
○ | Our investment in solar energy fields to drive our environmental stewardship responsibilities. |
| | | | | | | | | | | | | | | | | | | 55 | | | | | | 2022 Proxy Statement |
TABLE OF CONTENTS The following chart shows actual fiscal 2022 performance compared to the minimum, target and maximum goals for Enterprise Operating Income and Enterprise Revenue. For each metric, minimum performance against the goal results in no payout, target performance results in a 1.00 payout, and maximum performance results in a 2.00 payout. | Compensable Enterprise Operating Income(1) | | | $2,155 | | | $2,378 | | | $2,530 | | | $3,102 | | | 2.0 | | | Enterprise Revenue(2) | | | $44,899 | | | $46,781 | | | $47,735 | | | $51,687 | | | 2.0 | | | Shared Success(3) | | | N/A | | | N/A | | | N/A | | | | | | 1.5 | | |
| | | | | | | | | | | | | | | | | | | | | | | | Fiscal 2022 Blended Score: | | | 1.83 | |
(1)
| Compensable Enterprise Operating Income was determined based on the non-GAAP operating income from 125%continuing operations of $3,092 million in our Annual Report on Form 10-K for fiscal 2015 to 150%2022, adjusted for unusual or nonrecurring gains, including acquisition related operating income, and differences from targeted foreign exchange rates. |
(2)
| Compensable Enterprise Revenue was determined based on the non-GAAP revenue from continuing operations of $51,761 million in our Annual Report on Form 10-K for fiscal 2016, in conjunction with her expanded role2022, adjusted for unusual or nonrecurring gains, including acquisition related revenue, and increased responsibilities (for which she did not previously receive increased compensation). For eachdifferences from targeted foreign exchange rates. |
(3)
| The Shared Success score was determined based on the Committee’s review of Company performance as discussed above the metrics, the NEOs could earn zero to two times their weighted target payout percentage for that metric, making the maximum fiscal 2016 STI payout equal to two times their target payout percentage.
The following chart shows fiscal 2016 STI opportunities and payments as a dollar value and percent of annual earningstable.
|
The following chart shows fiscal 2022 STI opportunities and payments as a dollar value and percent of annual base salary (based on their eligible base salary as of the 15th day of each fiscal month): | Ms. Barry | | | $1,276,667 | | | 200% | | | $2,553,334 | | | 1.83 | | | $4,681,026 | | | Mr. Bilunas | | | 795,834 | | | 150% | | | 1,193,751 | | | 1.83 | | | 2,188,503 | | | Mr. Bonfig | | | 645,833 | | | 100% | | | 645,833 | | | 1.83 | | | 1,184,007 | | | Mr. Harmon(3) | | | 612,500 | | | 95% | | | 581,875 | | | 1.83 | | | 1,080,884 | | | Ms. Scarlett | | | 862,500 | | | 150% | | | 1,293,750 | | | 1.83 | | | 2,371,833 | |
(1)
| Annual base salary rate): | | | | | | | | | | | | | | | | | | | | | Name | | Fiscal 2016 Annual Earnings(1) | | Target Payout Percentage |
| | Annual Target Payout Value, based on Annual Earnings |
| | Fiscal 2016 Blended STI Score |
| | Fiscal 2016 STI Payment |
| | Fiscal 2016 STI Payment, as a Percentage of Annual Earnings |
| Mr. Joly | | $1,175,000 | | 200 | % | | $ | 2,350,000 |
| | 1.623 |
| | $ | 3,814,050 |
| | 325 | % | Ms. McCollam | | $925,000 | | 150 | % | | $ | 1,387,500 |
| | 1.623 |
| | $ | 2,251,913 |
| | 244 | % | Ms. Ballard | | $791,667 | | 150 | % | | $ | 1,187,500 |
| | 1.623 |
| | $ | 1,927,311 |
| | 244 | % | Mr. Mohan | | $791,667 | | 150 | % | | $ | 1,187,500 |
| | 1.623 |
| | $ | 1,927,311 |
| | 244 | % | Mr. Nelsen | | $633,333 | | 100 | % | | $ | 633,333 |
| | 1.623 |
| | $ | 1,027,899 |
| | 162 | % |
(1) Annual Earnings areis based on the average of each NEO'sNEO’s annual base salary rate on the fifteenth15th fiscal day of each month for twelve months of the fiscal year. This number may differ slightly from Actual Earningsactual earnings listed in the Summary Compensation Table.
|
(2)
Fiscal 2017
| The full fiscal 2022 STI Performance Criteria. In January 2016,score of 1.8333 has been abbreviated for the Compensation Committee approvedtable. |
(3)
| The STI Target for Mr. Harmon was increased during fiscal 2022 based on changes in role and responsibilities, therefore the performance criteriapercentage shown in the form of metrics for the fiscal 2017 STI, and in March 2016, the Compensation Committee approved the target performance levels for each metric. Similar metrics and slightly modified weightings as used in fiscal 2016 will be used in fiscal 2017, as listed below:“Target Payout Percentage” column reflects an approximate blended rate. |
| | | | | | | | | | | | | Enterprise Operating Income - 40%
| | | Enterprise Comparable Sales - 30%
Renew Blue Priorities (maintaining the three fiscal 2016 priorities and adding a fourth metric based on Services revenue) - 30%
The Compensation Committee approved a shift in the weighting by 10% from Domestic Enterprise Operating Income (weighted at 50% in fiscal 2016) to Enterprise Comparable Sales (weighted at 20% in fiscal 2016) in order to place even greater emphasis on Company growth, consistent with our future priorities as discussed in greater detail within the 2022 Proxy Summary of this proxy statement.Statement
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Awards of equity-based LTI compensation to our executive officers encourage a strong ownership stake in the Company and enhances
TABLE OF CONTENTS Long-Term Incentive Awards of equity-based LTI compensation to our executive officers enhance the alignment of interests of our NEOs and shareholders. All LTI awards for our NEOs and directors must be approved by the Compensation Committee. In March 2021, the Compensation Committee approved LTI awards to our NEOs pursuant to our fiscal 2022 LTI program under our 2020 Omnibus Incentive Plan. The fiscal 2022 LTI program primarily featured a mix of performance share awards and performance-conditioned time-based restricted shares. This results in a balanced portfolio of compensation rewards for NEOs, with performance share awards based on relative total shareholder return (to reward relative performance) and time-based restricted shares (to reward earnings and promote retention), as shown below. | Ms. Barry | | | — | | | 50% | | | 50% | | | Mr. Bilunas | | | — | | | 50% | | | 50% | | | Mr. Bonfig* | | | 75% | | | — | | | 25% | | | Mr. Harmon* | | | 75% | | | — | | | 25% | | | Ms. Scarlett | | | — | | | 50% | | | 50% | |
*
| Messrs. Bonfig and Harmon received time-based restricted shares because they were not members of Ms. Barry’s direct report team at the time of the annual grant. |
Form of Fiscal 2022 LTI Award. The NEOs receive an LTI grant once per year at a regularly scheduled Compensation Committee meeting that typically occurs in the first quarter of our fiscal year. In addition, our NEOs can receive supplemental equity awards when warranted to bring their annual compensation in line with market pay or to reflect an increase in responsibilities. In fiscal 2022, the closing price of our common stock on the grant date and an accounting valuation for each type of award was used to convert the award dollar value to a number of units. In addition, restricted stock and performance share awards include dividend equivalents, which begin to accrue for each declared dividend following the grant but are not converted into dividends until the restricted shares underlying the grants are earned, vested or payable. The fiscal 2022 LTI program was modified from our fiscal 2021 LTI program both in terms of types of grants and the mix for those grant types. Stock options and performance shares based on enterprise revenue growth were removed from the plan. The mix for the fiscal 2022 grant was 50% performance shares based on total shareholder return, and 50% time-based restricted shares with an Adjusted Net Earnings (as defined below) performance condition attached for the CEO and her direct reports. The mix for the other NEOs, who were not members of Ms. Barry’s direct report team at the time of the annual grant, was 25% performance shares based on total shareholder return, and 75% time-based restricted shares. Determination of Fiscal 2022 LTI Target Award Values. In March 2021, the Compensation Committee approved the executive team’s fiscal 2022 compensation, which included increased target award values for Ms. Barry and Ms. Scarlett to reflect market adjustments. LTI award amounts are determined based upon analysis of external market data, with overall compensation mix and external market data for equivalent roles being key factors in the determination of the award made to each NEO. The fiscal 2022 LTI awards for each NEO are set forth below: | Ms. Barry | | | 40,613 | | | — | | | 36,294 | | | $9,600,000 | | | — | | | Mr. Bilunas | | | 8,461 | | | 8,461(2) | | | 7,562 | | | $2,000,000 | | | $1,000,000 | | | Mr. Bonfig | | | — | | | 26,547(3) | | | 1,607 | | | $850,000 | | | $2,500,000 | | | Mr. Harmon | | | — | | | 25,596(4) | | | 1,324 | | | $700,000 | | | $2,500,000 | | | Ms. Scarlett | | | 6,769 | | | — | | | 6,049 | | | $1,600,000 | | | — | |
(1)
| The amounts reflect the annual LTI target grant date dollar values, or the target grant date values of one-time awards, approved by the Compensation Committee. During fiscal 2016, we made long-term incentiveThis dollar value is converted into a number of restricted shares or performance share awards using an estimate |
| | | | | | | | | | | | | | | | | | | 57 | | | | | | 2022 Proxy Statement |
TABLE OF CONTENTS or approximation of the price of a share of our common stock as of the grant date (unless otherwise noted in this table), and a Monte Carlo simulation for shares under performance share awards that have a market condition for vesting. These values differ from those portrayed in the Summary Compensation Table and Grants of Plan-Based Awards Table because there the grant date fair value of each award is measured in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation - Stock Compensation (“ASC Topic 718”), and here, the shares are based on an estimate of the grant date fair value determined under ASC Topic 718 as close to the grant date as possible. (2)
| The amount reflects a one-time grant of time-based restricted shares granted to our NEOs pursuant to our LTI program, which wasMr. Bilunas in March 2021 reflective of market pay conditions. The target grant date dollar value approved by the Compensation Committee in March 2015 under our 2014 Omnibus Incentive Plan.The fiscal 2016 LTI program featured a mix of performance share awards, stock options and time-based restricted shares. This results in a balanced portfolio of compensation rewards consisting of, for the CEO, 50% performance share awards (to reward relative performance), 20% stock options (to reward absolute share price appreciation) and 30%one-time award, as reflected in the “One-Time Grant: Target Grant Date Value” column, was $1,000,000.
|
(3)
| The amount reflects the time-based restricted shares (to promote retention),from Mr. Bonfig’s annual LTI award (5,394) as shown below. The mix for the other NEOs was one-third performance share awards, one-third stock options, and one-thirdwell as a one-time grant of time-based restricted shares also as shown below.
Form(21,153 shares) granted in March 2021 reflective of Fiscal 2016 LTI Award. The performance share awards are earned based on our Total Shareholder Return ("TSR") relativeMr. Bonfig’s increased responsibilities related to the S&P 500 Index over a three-year period. TSR was selected as the metric based on its direct link to shareholder value creation. The S&P 500 was used as a proxy for overall market performance. The relative TSR performance goals were as follows:
| | | | | Relative TSR Percentile Ranking | No. of Shares Earned (as % of Target) | Less than Threshold | Less than 30th Percentile | —% | Threshold | 30th Percentile | 50% | Target | 50th Percentile | 100% | Maximum | 70th Percentile | 150% | The number of performance shares earned are interpolated on a linear basis for performance between Threshold and Target and between Target and Maximum. |
The NEOs receive an LTI grant once per year at a regularly scheduled Compensation Committee meeting that typically occurs in the first quarterdeparture of our fiscal year. In fiscal 2016, the closing price of our common stock on theformer Chief Operating Officer. The target grant date was used to convert the award dollar value to a number of units. The nonqualified stock options have a term of ten years and become exercisable over a three-year period at the rate of one-third per year, beginning one year from the date of grant, subject to being employed on the vesting date. The exercise price for such options is equal to the closing price of our common stock on the grant date, as quoted on the NYSE. The time-based restricted shares also vest in equal installments of one-third on the three successive anniversaries of the grant date. The final number of shares issued under performance share awards will not be known until performance has been measured following the performance period (which goes from March 1, 2015 through February 28, 2018).
Under the terms of the 2014 Omnibus Plan, we may not grant stock options at a discount to fair market value. Unless otherwise determinedapproved by the Compensation Committee "fair market value" as of a given date is the closing price of our common stock as quoted on the NYSE on such date or, if the shares were not traded on that date, the most recent preceding date when the shares were traded.
Determination of Fiscal 2016 LTI Target Award Values. The Compensation Committee approved the executive leadership’s fiscal 2016 compensation, which included increased target award values for the NEOs to reflect market practice and promote retention of key leadership during this critical period of transformation, and a one-time award, for Ms. Ballard to acknowledge market rates for the increased scope of her responsibilities and impact of her contributions to our Company performance.
LTI award amounts are determined based upon analysis of external market data, with overall compensation mix and external market data for equivalent roles being key factorsas reflected in the determination of the award made to each NEO. “One-Time Grant: Target Grant Date Value” column, was $2,500,000.
|
(4)
| The fiscal 2016 LTI awards for each NEO are set forth below: | | | | | | | | | | Annual Fiscal 2016 Award Details | Name | | No. of Stock Options | | No. of Restricted Shares | | Target No. of Shares under Performance Share Award | | Target Grant Date Value | Mr. Joly | | 158,445 | | 77,142 | | 118,374 | | $10,000,000 | Ms. McCollam | | 120,154 | | 39,000 | | 35,907 | | $4,550,000 | Ms. Ballard | | 52,815 | | 17,143 | | 15,783 | | $2,000,000 | Mr. Mohan | | 52,815 | | 17,143 | | 15,783 | | $2,000,000 | Mr. Nelsen | | 43,572 | | 14,143 | | 13,021 | | $1,650,000 |
In addition, in recognition for her expanded role and responsibilities, Ms. Ballard received a one-time long-term incentive equity award in March 2015 consisting of the following:
| | | | | | | | | | One-Time Award Details | Name | | No. of Stock Options | | No. of Restricted Shares | | Target No. of Shares under Performance Share Award | | Target Grant Date Value | Ms. Ballard | | 52,815 | | 17,143 | | 15,783 | | $2,000,000 |
Performance Share Payout. In September 2012, the Committee adopted a new performance share unit plan design, based on relative TSR versus the S&P 500 Index over the 36-month period from October 1, 2012 to September 30, 2015. The shares would vest (0 to 150%) after the three-year period if the performance criteria was met.
Because the Company’s TSR during the performance period exceeded the 70th percentile of all companies in the S&P 500, these shares paid out at the maximum of 150% in fiscal 2016 and are reflected on the Option Exercises and Stock Vested table.
Fiscal 2017 LTI Program Design. For fiscal 2017, the mix of equity vehicles in the LTI program will consist of the following:
For the CEO, 50% performance share awards (using TSR as the performance metric), 20% stock options and 30% time-based restricted shares. This mix is consistent with the fiscal 2016 design.
For the other NEOs: 50% performance share awards (using TSR as the performance metric) and 50% time-based restricted shares. The Compensation Committee made changes to remove stock options from the mix of equity vehicles for the other NEOs in order to more closely align the performance share percentage amounts of the CEO and the other NEOs. The Compensation Committee also added a performance requirement toamount reflects the time-based restricted shares granted to our top executives to better align their interests with the shareholders’ interests. The performance requirement is based on achievement of positive adjusted net earnings and actsfrom Mr. Harmon’s annual LTI award (4,443) as well as a minimum thresholdone-time grant of time-based restricted shares (21,153 shares) granted in orderMarch 2021 reflective of Mr. Harmon’s increased responsibilities related to the departure of our former Chief Operating Officer. The target grant date dollar value approved by the Compensation Committee for the restricted shares to vest over time.one-time award, as reflected in the “One-Time Grant: Target Grant Date Value” column, was $2,500,000.
|
Performance-conditioned Time-based Restricted Share Awards. The performance-conditioned time-based restricted shares vest in equal installments of one-third on each of the first three successive anniversaries of the grant date, provided the performance condition has been met in any fiscal year during the term of the award and the NEO has been continually employed with us through those dates. The vesting of these shares is conditioned upon the Company’s achievement of positive Adjusted Net Earnings. Adjusted Net Earnings means net earnings determined in accordance with GAAP, adjusted to eliminate the following: (1) the cumulative effect of changes in GAAP; (2) gains and losses from discontinued operations; (3) extraordinary gains and losses; and (4) other unusual or nonrecurring gains or losses which are separately identified and quantified, including merger-related charges. Achievement of positive Adjusted Net Earnings may occur in any fiscal year during the term of the award for the award to begin to vest. For example, if the performance condition is not achieved until year two, two-thirds of the award will vest following Compensation Committee approval of achievement of the performance condition, with the remaining one-third to vest in the third year of the award. Time-based Restricted Share Awards. The time-based restricted shares vest in equal instalments of one-third on the three successive anniversaries of the grant date, provided the NEOs have been continually employed with us through those dates. Performance Share Awards. The performance share awards are earned based on total shareholder return (“TSR”) relative to the S&P 500 Index over a three-year period. TSR was selected as the metric based on its direct link to shareholder value creation. The S&P 500 is used as a proxy for the broad variety of other investment opportunities available to investors. The relative TSR performance goals are as follows: | Less than Threshold | | | Less than 30th Percentile | | | —% | | | Threshold | | | 30th Percentile | | | 50% | | | Target | | | 50th Percentile | | | 100%
| | | Maximum
| | | 70th Percentile | | | 150%
| |
The number of performance shares earned are interpolated on a linear basis for performance between Threshold and Target and between Target and Maximum. Performance Share Payouts. For performance share awards that were paid out in fiscal 2022, the Compensation Committee had adopted a performance share plan design based on two metrics. The first was based on relative TSR versus the S&P 500 Index over the 36-month period from February 4, 2018, to January 30, 2021 (the “FY19 TSR Awards”) and the second was based on the compound annual growth rate of enterprise revenue over the 36-month period from February 4, 2018, to January 30, 2021 (the “FY19 Revenue Awards”). All performance share awards were eligible to vest (0 to 150%) after the three-year period if the respective performance criteria were met. Because the Company’s TSR during the performance period exceeded the 70th percentile of all companies in the S&P 500, the Compensation Committee approved a payout for the FY19 TSR Awards at the maximum of 150% in fiscal 2022. Additionally, because the Company’s enterprise revenue compound growth rate over the performance period | | | | | | | | | | | | | | | | 2022 Proxy Statement | | | 58 | | | | | | |
Benefits. Our executive officers, including our NEOs, are generally offered the same employee benefits offered to all U.S.-based officers, as summarized
TABLE OF CONTENTS exceeded the maximum performance threshold of 2.0%, the Compensation Committee approved a payout for the FY19 Revenue Awards at the maximum of 150% in fiscal 2022. All performance share award payouts to our NEOs during fiscal 2022 are reflected in the Compensation of Executive Officers — Option Exercises and Stock Vested section. Other Compensation Health, Retirement and Other Benefits. NEOs are eligible to participate in benefit plans generally available to our employees, including health, retirement, stock purchase, severance, paid time off, life insurance and disability plans. We do not have an executive retirement plan that provides extra retirement benefits to the NEOs. NEOs are provided with a deferred compensation plan, annual executive physical exams (this benefit also applies to spouses and partners), supplemental long-term disability insurance and tax planning/preparation services consistent with those provided to other executives. A summary of these benefits is provided in the following table: | Accidental Death & Dismemberment | | | • | | | • | | | Deferred Compensation Plan | | | | | | • | | | Employee Discount | | | • | | | • | | | Employee Stock Purchase Plan | | | • | | | • | | | Health Insurance | | | • | | | • | | | — Executive Physical Exam | | | | | | • | | | Life Insurance | | | • | | | • | | | Long-Term Disability | | | • | | | • | | | — Executive Long-Term Disability | | | | | | • | | | Retirement Savings Plan | | | • | | | • | | | Severance Plan | | | • | | | • | | | Short-Term Disability | | | • | | | • | | | Tax Planning and Preparation | | | | | | • | |
We provide the executive benefits noted above to compete for executive talent and to promote the health, well-being and financial security of our NEOs. A description of executive benefits, and the costs associated with providing them for the NEOs, are reflected in the “All Other Compensation” column of the Summary Compensation Table as found in the Compensation of Executive Officers section of this proxy statement. | | | | | | Benefit | | All Full-TimePrivate Jet Use Policy. We lease an interest in aircraft enrolled in a fractional share program managed by a third-party provider. Use of this aircraft is governed by our Private Jet Use Policy. Under the policy, only the CEO is allowed to request private jet services for business or personal travel; however, the CEO may authorize the use of private jet services by any Company employee, including each of our NEOs. When the leased private jet is used for personal travel, the policy requires that all charges associated with the trip invoiced by the third-party provider must be paid by the executive within a reasonable time of the travel, not to exceed ninety days.
Severance Plan. We have a severance plan that complies with the applicable provisions of the Employee Retirement Income Security Act (“ERISA”). The purpose of the severance plan is to provide financial assistance to employees while they seek other employment, in exchange for a release of any claims. Although there are differences in benefits depending on the employee’s job level, the basic elements of the plan are comparable for all eligible employees. The plan generally covers all full-time and part-time U.S. employees of Best Buy Co., Inc. and Best Buy Stores, L.P. and their respective direct and indirect U.S.-domiciled subsidiaries, including the NEOs, except for those subject to a separate severance agreement or specifically excluded. The plan covers involuntary terminations due to job elimination, reduction in force, business restructuring and other circumstances as we determine. Eligible terminated employees receive a severance payment based on their role and time with the Company, with basic employee benefits such as medical, dental and life insurance continued for an equivalent period. Except as modified or replaced by individual employment agreements, Ms. Scarlett and Messrs. Bilunas, Bonfig and Harmon are eligible for the following severance benefits under the plan: one month of Company-paid COBRA continuation coverage and group life insurance premiums and a lump sum cash payment equal to two years of salary, a payment of $25,000 in lieu of outplacement and other tax and financial planning assistance, a payment of 150% of the cost of 23 months of medical, dental and vision coverage (based on coverage U.S.-Based Employees | | | | | | | | | | | | | | | | | | | 59 | | | | | | 2022 Proxy Statement | | Executive
Officers
| Accidental Death & Dismemberment | | ● | | ● | Deferred Compensation Plan(1)
| | | | ● | Employee Discount | | ● | | ● | Employee Stock Purchase Plan | | ● | | ● | Health Insurance | | ● | | ● | — Executive Physical Exam | | | | ● | Life Insurance | | ● | | ● | Long-Term Disability | | ● | | ● | — Executive Long-Term Disability | | | | ● | Retirement Savings Plan | | ● | | ● | Severance Plan | | ● | | ● | Short-Term Disability | | ● | | ● | Tax Planning and Preparation | | | | ● |
| | (1) | TABLE OF CONTENTS elections in place at the time of termination) and a payment of 150% of the cost of 17 months of life insurance coverage. See Compensation of Executive Officers - Potential Payments Upon Termination or Change-of-Control for more information regarding potential payments following an involuntary termination and for the severance provisions of Ms. Barry’s employment agreement, which supersedes the provisions of the severance plan. Executive Stock Ownership Guidelines. The Compensation Committee has established stock ownership guidelines to promote the alignment of officer and shareholder interests and to encourage behaviors that have a positive influence on stock price appreciation and total shareholder return. Under the guidelines, which the Compensation Committee reviewed in fiscal 2022, we expect our NEOs to acquire ownership of a fixed number of shares, based on their positions. The stock ownership expectation generally remains effective for as long as the officer holds the position. In addition to shares personally owned by each officer, the following forms of stock ownership count toward the ownership target: Equivalent shares owned in the Best Buy Stock Fund within our Retirement Savings Plan; 100% of non-vested shares (net of taxes) subject to time-based conditions granted under our LTI program; and 50% of the intrinsic value of vested stock options (denominated as a number of shares) granted under our LTI program. We require that until the ownership target is met, NEOs will retain: (i) 50% of the net proceeds received from the exercise of a stock option in the form of Best Buy common stock; (ii) 50% of vested time-based restricted shares (net of taxes); and (iii) 50% of all performance share awards (net of taxes) issued. The ownership target does not need to be met within a certain time frame, and our NEOs are considered in compliance with the guidelines as long as progress towards the ownership target is being made consistent with the expectations noted above. In fiscal 2022, all NEOs were in compliance with the ownership guidelines. The ownership targets and ownership levels as of the end of fiscal 2022 for our continuing NEOs are shown below. | Ms. Barry | | | 200,000 | | | 257,652 | | | Mr. Bilunas | | | 55,000 | | | 38,581 | | | Mr. Bonfig | | | 35,000 | | | 60,476 | | | Mr. Harmon | | | 35,000 | | | 29,298 | | | Ms. Scarlett | | | 55,000 | | | 56,995 | |
Effective the beginning of fiscal 2023, two changes were made to the ownership guidelines. First, 50% of the intrinsic value of vested stock options (denominated as a number of shares) granted under our LTI program no longer count toward the ownership target. Second, the ownership targets changed from a fixed number of shares to a multiple of annual salary. Ms. Barry’s new ownership target is six times her annual salary, and for other NEOs, the new ownership target is three times their annual salary. Clawback and Restrictive Covenant Provisions. All STI and LTI awards granted to our NEOs are subject to our clawback policy. The triggers for potential recoupment of such awards include breach of the restrictive covenants in our long-term incentive award agreements, breach of our Code of Business Ethics, and issuance of a financial restatement as a result of fraud or misconduct. We also include confidentiality, non-compete, non-solicitation and, in select situations, non-disparagement provisions in our long-term incentive award agreements. Prohibition on Hedging and Pledging Company Securities. We prohibit all employees, including NEOs, and members of the Board from hedging Company securities, including by way of forward contracts, equity swaps, collars, exchange funds or otherwise. In addition, our executive officers and Board members are prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan. Only officers and directors are eligible to participate in the Deferred Compensation Plan, as described in the Compensation of Executive Officers – Nonqualified Deferred Compensation – Deferred Compensation Plan section.We provide the executive benefits noted above to compete for executive talent and to promote the health, well-being and financial security of our NEOs. A description of executive benefits, and the costs associated with providing them for the NEOs, are reflected in the "All Other Compensation" column of the Summary Compensation Table as found in the Compensation of Executive Officers section of this proxy statement.
| | | 2022 Proxy Statement
| | | Severance Plan. We have a severance plan that complies with the applicable provisions of the Employee Retirement Income Security Act ("ERISA"). The purpose of the severance plan is to provide financial assistance to employees while they seek other employment, in exchange for a release of any claims. Although there are differences in benefits depending on the employee's job level, the basic elements of the plan are comparable for all eligible employees. The plan generally covers all full-time and part-time U.S. employees of Best Buy Co., Inc. and Best Buy Stores, L.P. and their respective direct and indirect U.S.-domiciled subsidiaries, including the NEOs, except for those subject to a separate severance agreement or specifically excluded.60
The plan covers involuntary terminations due to job elimination and discontinuation, office closing, reduction in force, business restructuring and other circumstances as we determine. Eligible terminated employees receive a severance payment based on
their role and time with the company, with basic employee benefits such as medical, dental and life insurance continued for an equivalent period. Except as modified or replaced by individual employment agreements, the NEOs (other than Mr. Joly and Ms. McCollam who have employment agreements) are eligible for the following severance benefits:
Ms. Ballard and Messrs. Mohan and Nelsen, at an enterprise executive vice president level, are eligible for two years of salary, a payment of $25,000 in lieu of outplacement and other tax and financial planning assistance, and a payment of 150% of the cost of 24 months of basic employee benefits such as medical, dental and life insurance.
See Compensation of Executive Officers — Potential Payments Upon Termination or Change-of-Control for more information regarding potential payments following an involuntary termination and for the severance provisions of Mr. Joly's and Ms. McCollam's employment agreements.
Stock Ownership, Tax and Other Policies
Executive Stock Ownership Guidelines.The Compensation Committee has established stock ownership guidelines to promote the alignment of officer and shareholder interests and to encourage behaviors that have a positive influence on stock price appreciation and total shareholder return. During its annual review in September 2015, the Compensation Committee approved changes to the guidelines to align them with market practice. Specifically, we increased the CEO’s ownership target from 140,000 shares to 200,000 shares; and we changed what shares count towards compliance. Under the guidelines, we expect our NEOs to acquire ownership of a fixed number of shares, based on their positions. The stock ownership expectation generally remains effective for as long as the officer holds the position.
In addition to shares personally owned by each officer, the following forms of stock ownership count toward the ownership target:
Equivalent shares owned in the Best Buy Stock Fund within our Retirement Savings Plan;
100% of non-vested shares subject to time-based conditions granted under our LTI program; and
50% of the intrinsic value of vested stock options (denominated as a number of shares) granted under our LTI program.
We require that until the ownership target is met, NEOs will retain: (i) 50% of the net proceeds received from the exercise of a stock option in the form of Best Buy common stock; (ii) 50% of vested time-based restricted shares (net of taxes); and (iii) 50% of all performance share awards (net of taxes) issued. The ownership target does not need to be met within a certain time frame, and our NEOs are considered in compliance with the guidelines as long as progress towards the ownership target is being made consistent with the expectations noted above.
In fiscal 2016, all NEOs were in compliance with the ownership guidelines. The ownership targets and ownership levels as of the end of fiscal 2016 for our NEOs are shown below.
| | | | | | | | | | | | Name | | Ownership Target (in shares) | | Ownership as of Fiscal 2016 Year-End Using Guidelines (in shares) | Mr. Joly | | 200,000 | | 792,194 | Ms. McCollam | | 55,000 | | 387,814 | Ms. Ballard | | 55,000 | | 76,353 | Mr. Mohan | | 55,000 | | 120,982 | Mr. Nelsen | | 35,000 | | 35,528 |
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TABLE OF CONTENTS Compensation and Human Resources Committee Report on Executive Compensation The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended January 29, 2022, and in this proxy statement.
Tax Deductibility of Compensation. Section 162(m) of the Internal Revenue Code ("Section 162(m)") limits the deductibility of compensation in excess of $1 million paid to the chief executive officer and each of our three most highly compensated executive officers (other than the chief financial officer), unless the compensation qualifies as "performance-based compensation." Among other things, in order to be deemed performance-based compensation, the compensation must be based on the achievement of pre-established, objective performance criteria and must be pursuant to a plan that has been approved by our shareholders. We believe that it is important to continue to be able to take available Company tax deductions with respect to the compensation paid to our NEOs. We do not, however, make compensation decisions based solely on the availability of a deduction under Section 162(m).
Clawback and Restrictive Covenant Provisions. Our senior management performance awards have typically included clawback provisions, particularly where it has been difficult to match the period of an employee's influence on business results. We may exercise our rights under such provisions if other strategies to mitigate unjust rewards are difficult to achieve. Such circumstances include, but are not limited to, breach of our restrictive covenants, material violations of Company policy, intentional misconduct resulting in restatements of financial statements of the Company, violations of an agreement between the individual and the Company, criminal acts, fraud and violations of securities laws. In September 2010, we adopted new guidelines with respect to clawback provisions to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act, with final clawback language to be determined after the SEC adopts related rules. The new guidelines also expanded our prior approach to cover all executive officer incentive award agreements. In addition to the clawback provisions, we include confidentiality, non-compete, non-solicitation and, in select situations, non-disparagement provisions. In March 2016, in the wake of the proposed rules on clawbacks the SEC proposed in July 2015, we approved adding a provision to our STI materials stating that any award granted is subject to any clawback policy the Company may subsequently adopt.
Prohibition on Hedging and Pledging Company Securities. We prohibit all employees, including NEOs, and members of the Board from hedging Company securities, including by way of forward contracts, equity swaps, collars, exchange funds or otherwise. In addition, our executive officers and Board members are prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan.
Compensation and Human Resources Committee Report on Executive Compensation
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis, above, with management. Based on this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended January 30, 2016, and in this proxy statement.
COMPENSATION AND HUMAN RESOURCES COMMITTEE David W. Kenny (Chair)
Russell P. Fradin (Chair)
Lisa M. Caputo Kathy J. Higgins Victor
David W. Kenny
Richelle P. Parham
Eugene A. Woods Compensation and Human Resources Committee Interlocks and Insider Participation
The Compensation Committee is comprised entirely of independent directors. At no time during fiscal 20162022 was any member of the Compensation Committee a current or former officer or employee of the Company or any of its subsidiaries. During fiscal 2016,2022, no member of the Compensation Committee had a relationship that must be described pursuant to SEC disclosure rules on related party transactions. In fiscal 2016,2022, none of our executive officers served on the board of directors or compensation committee of another company that had one or more executive officers serving on our Board or Compensation Committee. | | | | | | | | | | | | | | | | | | | 61 | | | | | | 2022 Proxy Statement |
TABLE OF CONTENTS
Compensation of Executive Officers
Summary Compensation Table
The table below summarizes the total compensation earned by each of our NEOs during fiscal 20162022 and the two preceding fiscal years.years (if applicable). | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | |
Salary(1) | | Bonus | | Stock Awards(2)(3) | | Option Awards(2) | | Non-Equity Incentive Plan Compensation(4) | | All Other Compensation(5) | | Total |
| Hubert Joly Chairman and Chief Executive Officer | | 2016 | | $ | 1,175,000 |
| | $ | — |
| | $ | 8,011,688 |
| | $ | 1,842,715 |
| | $ | 3,814,050 |
| | $ | 29,028 |
| | $ | 14,872,481 |
| | 2015 | | 1,175,000 |
| | — |
| | 6,986,928 |
| | 1,654,070 |
| | 3,078,500 |
| | 42,796 |
| | 12,937,294 |
| | 2014 | | 1,175,000 |
| | — |
| | 8,167,213 |
| | 2,000,360 |
| | 2,514,500 |
| | 24,146 |
| | 13,881,219 |
| Sharon L. McCollam Chief Administrative Officer and Chief Financial Officer | | 2016 | | $ | 925,000 |
| | $ | — |
| | $ | 3,039,724 |
| | $ | 1,397,391 |
| | $ | 2,251,913 |
| | $ | 9,669 |
| | $ | 7,623,697 |
| | 2015 | | 925,000 |
| | — |
| | 2,696,985 |
| | 1,275,987 |
| | 1,817,625 |
| | 269,558 |
| | 6,985,155 |
| | 2014 | | 925,000 |
| | — |
| | 3,131,454 |
| | 1,543,133 |
| | 1,484,625 |
| | 215,221 |
| | 7,299,433 |
| Shari L. Ballard(6) President, U.S. Retail and Chief Human Resources Officer | | 2016 | | $ | 790,385 |
| | $ | — |
| | $ | 2,672,270 |
| | $ | 1,228,476 |
| | $ | 1,927,311 |
| | $ | 24,641 |
| | $ | 6,643,083 |
| | 2015 | | 700,000 |
| | — |
| | 799,099 |
| | 378,065 |
| | 1,146,250 |
| | 30,494 |
| | 3,053,908 |
| | 2014 | | 700,000 |
| | — |
| | 927,819 |
| | 457,228 |
| | 936,250 |
| | 17,131 |
| | 3,038,428 |
| R. Michael Mohan Chief Merchandising Officer
| | 2016 | | $ | 790,385 |
| | $ | — |
| | $ | 1,336,135 |
| | $ | 614,238 |
| | $ | 1,927,311 |
| | $ | 10,323 |
| | $ | 4,678,392 |
| | 2015 | | 650,000 |
| | — |
| | 1,556,015 |
| | 972,974 |
| | 1,004,333 |
| | 12,477 |
| | 4,195,799 |
| | 2014 | | 498,462 |
| | — |
| | 2,106,552 |
| | 1,047,696 |
| | 401,250 |
| | 14,581 |
| | 4,068,541 |
| Keith J. Nelsen General Counsel and Secretary
| | 2016 | | $ | 640,385 |
| | $ | — |
| | $ | 1,102,314 |
| | $ | 506,742 |
| | $ | 1,027,899 |
| | $ | 10,482 |
| | $ | 3,287,822 |
| | 2015 | | 550,000 |
| | — |
| | 865,684 |
| | 409,575 |
| | 720,500 |
| | 12,081 |
| | 2,557,840 |
| | 2014 | | 543,750 |
| | — |
| | 1,005,159 |
| | 495,324 |
| | 582,704 |
| | 41,323 |
| | 2,668,260 |
|
| Corie Barry
Chief Executive Officer | | | 2022 | | | $1,278,462 | | | $— | | | $9,598,480 | | | $— | | | $4,681,026 | | | $73,189 | | | $15,631,157 | | | 2021 | | | 927,692 | | | — | | | 6,959,274 | | | 1,740,435 | | | 2,320,000 | | | 86,102 | | | 12,033,503 | | | 2020 | | | 1,013,462 | | | — | | | 6,780,674 | | | 1,695,326 | | | 1,913,334 | | | 37,867 | | | 11,440,663 | | | Matt Bilunas
Executive Vice President, Chief Financial Officer | | | 2022 | | | 796,154 | | | — | | | 2,999,784 | | | — | | | 2,188,503 | | | 31,135 | | | 6,015,576 | | | 2021 | | | 711,539 | | | — | | | 1,599,881 | | | 400,107 | | | 1,162,500 | | | 18,418 | | | 3,892,445 | | | 2020 | | | 629,808 | | | — | | | 1,416,581 | | | 1,000,620 | | | 798,000 | | | 35,777 | | | 3,880,786 | | | Jason Bonfig(6) Executive Vice President, Chief Merchandising Officer | | | 2022 | | | 646,154 | | | — | | | 3,350,051 | | | — | | | 1,184,007 | | | 8,622 | | | 5,188,834 | | | Damien Harmon(6) Executive Vice President, Omnichannel | | | 2022 | | | 613,462 | | | — | | | 3,200,237 | | | — | | | 1,080,884 | | | 64,775 | | | 4,959,358 | | | Kamy Scarlett
Executive Vice President, Human Resources & Best Buy Canada | | | 2022 | | | 863,462 | | | — | | | 1,599,766 | | | — | | | 2,371,833 | | | 52,175 | | | 4,887,236 | | | 2021 | | | 738,462 | | | — | | | 2,000,045 | | | 250,077 | | | 1,200,000 | | | 54,973 | | | 4,243,557 | | | 2020 | | | 800,000 | | | 500,000 | | | 1,000,553 | | | 2,248,690 | | | 1,344,000 | | | 123,146 | | | 6,016,389 | |
| | (1)
| These amounts reflect actual earnings based onwhich are a blend of prior annual base salary rates and the go-forward base salary rates approved by the Compensation Committee during its annual review in March of each year, as well as any off-cycle increases or reductions approved by the Compensation Committee during the year. Further, these amounts are before any deferrals under the Deferred Compensation Plan. We do not provide guaranteed, above-market or preferential earnings on compensation deferred under the Deferred Compensation Plan. The investment options available for notional investment of deferred compensation are similar to those available under the Retirement Savings Plan and can be found, along with additional information about deferred amounts, in the Nonqualified Deferred Compensation section. |
| | (2)
| These amounts reflect the aggregate grant date fair value for stock-based awards granted to our NEOs for all fiscal years reflected,reflected; however, fiscal 20162022 amounts are explained in greater detail under the heading Grants of Plan-Based Awards.and in footnote three below. The grant date fair value reflected for any award subject to performance share awardconditions is the value at the grant date of the probable outcome of the award. 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"718”). The amountsAs permitted by ASC Topic 718, we account for any forfeitures as they occur rather than estimating future service-based forfeitures, and, accordingly, the grant date fair values reported havedo not been adjusted to eliminate service-based forfeiture assumptions.assume any estimated forfeitures. The other assumptions used in calculating these amounts are set forth in Note 7, 1, Summary of Significant Accounting Policies, and Note 9, Shareholders'Shareholders’ Equity, of the Notes to the consolidated financial statementsConsolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2016.29, 2022. |
| | | | | | | | | | | | | (3) | | | 2022 Proxy Statement | | | 62 | | | | | | |
TABLE OF CONTENTS (3)
| The fiscal 20162022 amounts reflected in this column include the probable grant date fair value of: (a) one or more time-based restricted share awards that vest on a time-based schedule subject to (in the case of grants to Ms. Barry, Mr. Bilunas and Ms. Scarlett) achievement of positive Adjusted Net Earnings in any fiscal year during the three-year term of the award (described in greater detail in the Grants of Plan-Based Awards section)section) and (b) one or more performance share award (valued at the probable outcome of the award as of the grant date)awards that will be earned depending on the performance of our stock'sstock’s total shareholder return, relative to a peer group comprised of the S&P 500 Index, over a three-year period (also described in greater detail in the Grants of Plan-Based Awards section). The maximum value of the performance share awards for each NEO as of the grant date, assuming the highest level of performance, conditions, is noted in the following table: |
| | | | | | | | | | | | | | | | | | | | | | | | Name | | Probable Grant Date Fair Value of Performance Share Awards (reflected in Stock Awards Column) | | Target Performance Grant in Shares | | Maximum Performance Grant in Shares | | Maximum Grant Date Fair Value of Performance Share Awards | | Grant Date Fair Value of Time-Based Awards (reflected in Stock Awards Column) | | Stock Awards Column Total | Mr. Joly | | $ | 4,997,750 |
| | 118,374 |
| | 177,561 |
| | $ | 7,496,625 |
| | $ | 3,013,938 |
| | $ | 8,011,688 |
| Ms. McCollam | | 1,515,994 |
| | 35,907 |
| | 53,861 |
| | 2,273,990 |
| | 1,523,730 |
| | 3,039,724 |
| Ms. Ballard* | | 1,332,716 |
| | 31,566 |
| | 47,350 |
| | 1,999,076 |
| | 1,339,554 |
| | 2,672,270 |
| Mr. Mohan | | 666,358 |
| | 15,783 |
| | 23,675 |
| | 999,538 |
| | 669,777 |
| | 1,336,135 |
| Mr. Nelsen | | 549,747 |
| | 13,021 |
| | 19,532 |
| | 824,620 |
| | 552,567 |
| | 1,102,314 |
|
*Ms. Ballard had two time-based awards and two performance share awards during fiscal 2016, which have been aggregated here. For additional detail, see the Grants of Plan-Based Awards section.
| Ms. Barry | | | 36,294 | | | $4,798,430 | | | 54,441 | | | $7,197,645 | | | Mr. Bilunas | | | 7,562 | | | 999,772 | | | 11,343 | | | 1,499,658 | | | Mr. Bonfig | | | 1,607 | | | 212,461 | | | 2,411 | | | 318,692 | | | Mr. Harmon | | | 1,324 | | | 175,046 | | | 1,986 | | | 262,569 | | | Ms. Scarlett | | | 6,049 | | | 799,738 | | | 9,074 | | | 1,199,607 | |
| | (4)
| These amounts reflect STI payments made for all fiscal years shown. The fiscal 20162022 STI plan is described in the section Compensation Discussion and Analysis – Executive Compensation Elements – Short-Term Incentive.Incentive. |
| | (5)
| The fiscal 20162022 amounts reflected in this column include All Other Compensation as described in the following table: |
| | | | | | | | | | | | | | | | | | Name | | Retirement Plan Contribution(a) |
| | Life Insurance Premiums(b) |
| | Other |
| | Total |
| Mr. Joly | | $ | 11,404 |
| | $ | 492 |
| | $ | 17,132 |
| (c) | $ | 29,028 |
| Ms. McCollam | | 9,177 |
| | 492 |
| | — |
| (d) | 9,669 |
| Ms. Ballard | | 9,990 |
| | 492 |
| | 14,159 |
| (c) | 24,641 |
| Mr. Mohan | | 9,831 |
| | 492 |
| | — |
| (d) | 10,323 |
| Mr. Nelsen | | 9,990 |
| | 492 |
| | — |
| (d) | 10,482 |
|
| Ms. Barry | | | $9,065 | | | $641 | | | $63,483(c) | | | $73,189 | | | Mr. Bilunas | | | 13,446 | | | 641 | | | 17,048(d) | | | 31,135 | | | Mr. Bonfig | | | 7,981 | | | 641 | | | —(e) | | | 8,622 | | | Mr. Harmon | | | 11,831 | | | 612 | | | 52,333(f) | | | 64,775 | | | Ms. Scarlett | | | 12,388 | | | 641 | | | 39,146(g) | | | 52,175 | |
| | (a)
| These amounts reflect our matching contributions to the NEOs'NEOs’ Retirement Savings Plan accounts and include true-up contributions made during fiscal 2016 to NEOs who had not previously received the prior year's maximum matching contribution.accounts. |
| | (b)
| These amounts reflect the portions of premiums paid by us for group term life insurance coverage. |
(c)
| The amount reflects premiums paid by us for supplemental executive long-term disability insurance ($35,266), Company-paid costs associated with the executive physical benefit, Company-paid tax preparation and planning services, and the incremental cost of Ms. Barry’s use of the Company’s leased private jet for travel to outside board meetings ($13,741). The Company considers travel to outside board meetings to be business-related as part of Ms. Barry’s professional development, as determined by our Board, and therefore, Ms. Barry is not required to reimburse the Company for those flights. Nevertheless, the Company has reported the aggregate incremental cost to the Company of those flights above, based on the actual invoiced amount from the Company’s third-party provider for the variable costs incurred on each trip, such as occupied hourly fees, as well as other direct operating costs to the Company, including fuel costs, any applicable ferry fees, crew fees and travel expenses for international flights, and passenger ground transportation handling fees. The aggregate incremental cost does not include certain fixed costs that do not change based on usage, such as monthly lease and management fees that are billed regardless of usage and the aircraft lease deposit. In addition, as our jet use policy permits, family members and invited guests of Ms. Barry occasionally ride along as additional passengers on business flights, and Ms. Barry reimbursed the Company for the cost of such ride-alongs at the greater of the incremental cost, if any, to accommodate the personal passengers on the flight and the imputed income amount determined using the IRS Standard Industry Fare Level (“SIFL”) rate. |
(c)(d)
| These amounts reflect portions ofThe amount reflects premiums paid by us for supplemental executive long-term disability insurance. |
(e)
| | (d) | In accordance with the SEC’s disclosure rules,Any perquisites and other personal benefits provided to the named executive officers are not includedMr. Bonfig for fiscal 2016 for Ms. McCollam and Messrs. Mohan and Nelsen because the aggregate incremental value of perquisites was2022 were less than $10,000 for each of these named executive officers.and information regarding any such perquisites and personal benefits has therefore not been included. |
(f)
| The amount reflects premiums paid by us for supplemental executive long-term disability insurance, Company-paid tax preparation and planning services, and Company-paid living and commuting expenses associated with Mr. Harmon’s status as a remote employee during fiscal 2022 ($40,795, including commercial airfare, rent expense, vehicle lease and utilities). |
(g)
| The amount reflects premiums paid by us for supplemental executive long-term disability insurance ($32,686), and Company-paid costs associated with the executive physical benefit. |
(6)
| Mr. Bonfig and Mr. Harmon became executive officers of the Company on July 1, 2021. |
| | | | | | | | | | | | | (6) | Effective March 1, 2016, Ms. Ballard took on a new role. While remaining President of U.S. Retail, she will also focus on accelerating our efforts around waste and efficiency. A new Chief Human Resources Officer, Paula Baker, was promoted internally effective March 1, 2016. | | | | | 63 | | | | | | 2022 Proxy Statement |
TABLE OF CONTENTS
Grants of Plan-Based Awards
The table below summarizes the grants made to each of our NEOs during fiscal 20162022 under the 2014Best Buy Co., Inc. 2020 Omnibus Stock and Incentive Plan and the Short-Term Incentive Plan: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | All Other Option Awards: Number of Securities Underlying Options (#) | | Exercise or Base Price of Option Awards ($ / Sh) | | | | | | | | | | | | | | | | | | | | | | Grant Date Fair Value of Stock and Option Awards ($)(2) | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts Under | | Estimated Future Payouts Under | | | | | | | | | Non-Equity Incentive Plan Awards(1) | | Equity Incentive Plan Awards | | | | | Name | | Grant Date | | Threshold ($) | | Target ($) | | Maximum ($) | | Threshold (#) | | Target (#) | | Maximum (#) | | | | | Mr. Joly | | — |
| | $ | 587,500 |
| | $ | 2,350,000 |
| | $ | 4,700,000 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | $ | — |
| | $ | — |
| | | 3/12/2015 |
| (3) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 158,445 |
| | 40.85 | | 1,842,715 |
| | | 3/12/2015 |
| (4) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 77,142 |
| | — |
| | — |
| | 3,013,938 |
| | | 3/12/2015 |
| (5) | — |
| | — |
| | — |
| | 59,187 |
| | 118,374 |
| | 177,561 |
| | — |
| | — |
| | — |
| | 4,997,750 |
| Ms. McCollam | | | | 346,875 |
| | 1,387,500 |
| | 2,775,000 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | 3/12/2015 |
| (3) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 120,154 |
| | 40.85 | | 1,397,391 |
| | | 3/12/2015 |
| (4) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 39,000 |
| | — |
| | — |
| | 1,523,730 |
| | | 3/12/2015 |
| (5) | — |
| | — |
| | — |
| | 17,954 |
| | 35,907 |
| | 53,861 |
| | — |
| | — |
| | — |
| | 1,515,994 |
| Ms. Ballard | | — |
| | 296,875 |
| | 1,187,499 |
| | 2,374,998 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | 3/12/2015 |
| (3) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 52,815 |
| | 40.85 | | 614,238 |
| | | 3/12/2015 |
| (4) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 17,143 |
| | — |
| | — |
| | 669,777 |
| | | 3/12/2015 |
| (5) | — |
| | — |
| | — |
| | 7,892 |
| | 15,783 |
| | 23,675 |
| | — |
| | — |
| | — |
| | 666,358 |
| | | 3/12/2015 |
| (3)(6) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 52,815 |
| | 40.85 | | 614,238 |
| | | 3/12/2015 |
| (4)(6) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 17,143 |
| | — |
| | — |
| | 669,777 |
| | | 3/12/2015 |
| (5)(6) | — |
| | — |
| | — |
| | 7,892 |
| | 15,783 |
| | 23,675 |
| | — |
| | — |
| | — |
| | 666,358 |
| Mr. Mohan | | — |
| | 296,875 |
| | 1,187,499 |
| | 2,374,998 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | 3/12/2015 |
| (3) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 52,815 |
| | 40.85 | | 614,238 |
| | | 3/12/2015 |
| (4) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 17,143 |
| | — |
| | — |
| | 669,777 |
| | | 3/12/2015 |
| (5) | — |
| | — |
| | — |
| | 7,892 |
| | 15,783 |
| | 23,675 |
| | — |
| | — |
| | — |
| | 666,358 |
| Mr. Nelsen | | — |
| | 158,333 |
| | 633,333 |
| | 1,266,666 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | 3/12/2015 |
| (3) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 43,572 |
| | 40.85 | | 506,742 |
| | | 3/12/2015 |
| (4) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 14,143 |
| | — |
| | — |
| | 552,567 |
| | | 3/12/2015 |
| (5) | — |
| | — |
| | — |
| | 6,511 |
| | 13,021 |
| | 19,532 |
| | — |
| | — |
| | — |
| | 549,747 |
|
| Ms. Barry | | | — | | | $— | | | $2,553,334 | | | $5,106,668 | | | — | | | — | | | — | | | — | | | $— | | | 3/20/2021(3) | | | — | | | — | | | — | | | 18,147 | | | 36,294 | | | 54,441 | | | — | | | 4,798,430 | | | 3/20/2021(4) | | | — | | | — | | | — | | | — | | | 40,613 | | | 40,613 | | | — | | | 4,800,050 | | | Mr. Bilunas | | | — | | | — | | | 1,193,751 | | | 2,387,502 | | | — | | | — | | | — | | | — | | | — | | | 3/20/2021(3) | | | — | | | — | | | — | | | 3,781 | | | 7,562 | | | 11,343 | | | — | | | 999,772 | | | 3/20/2021(4) | | | — | | | — | | | — | | | — | | | 8,461 | | | 8,461 | | | — | | | 1,000,006 | | | 3/20/2021(5) | | | — | | | — | | | — | | | — | | | — | | | — | | | 8,461 | | | 1,000,006 | | | Mr. Bonfig | | | — | | | — | | | 645,833 | | | 1,291,666 | | | — | | | — | | | — | | | — | | | — | | | 3/20/2021(3) | | | — | | | — | | | — | | | 804 | | | 1,607 | | | 2,411 | | | — | | | 212,461 | | | 3/20/2021(5) | | | — | | | — | | | — | | | — | | | — | | | — | | | 5,394 | | | 637,517 | | | 3/20/2021(5) | | | — | | | — | | | — | | | — | | | — | | | — | | | 21,153 | | | 2,500,073 | | | Mr. Harmon | | | — | | | — | | | 581,875 | | | 1,163,750 | | | — | | | — | | | — | | | — | | | — | | | 3/20/2021(3) | | | — | | | — | | | — | | | 662 | | | 1,324 | | | 1,986 | | | — | | | 175,046 | | | 3/20/2021(5) | | | — | | | — | | | — | | | — | | | — | | | — | | | 4,443 | | | 525,118 | | | 3/20/2021(5) | | | — | | | — | | | — | | | — | | | — | | | — | | | 21,153 | | | 2,500,073 | | | Ms. Scarlett | | | — | | | — | | | 1,293,750 | | | 2,587,500 | | | — | | | — | | | — | | | — | | | — | | | 3/20/2021(3) | | | — | | | — | | | — | | | 3,025 | | | 6,049 | | | 9,074 | | | — | | | 779,738 | | | 3/20/2021(4) | | | — | | | — | | | — | | | — | | | 6,769 | | | 6,769 | | | — | | | 800,028 | |
(1)
| These amounts reflect the potential threshold, target and maximum payout for each NEO under our fiscal 20162022 STI, which is described in greater detail under the heading Compensation Discussion and Analysis – Executive Compensation Elements – Short-Term Incentive. A threshold payout is not indicated as there was no specified minimum payment under our fiscal 2022 STI. The actual payout to each NEO for fiscal 20162022 is provided in the following sections: Compensation Discussion and Analysis – Executive Compensation Elements – Short-Term Incentive and the Summary Compensation Table. |
| | (2)
| These amounts reflect the aggregate grant date fair value, measured in accordance with ASC Topic 718. The amountsAs permitted by ASC Topic 718, we account for any forfeitures as they occur rather than estimating future service-based forfeitures, and, accordingly, the grant date fair values reported havedo not been adjusted to eliminate service-based forfeiture assumptions.assume any estimated forfeitures. The other assumptions used in calculating these amounts are set forth in Note 7, 1, Summary of Significant Accounting Policies, and Note 9, Shareholders'Shareholders’ Equity, of the Notes to the consolidated financial statementsConsolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2016.29, 2022. The value reflected for any performance shareperformance-conditioned award is the value at the grant date ofbased upon the probable outcome of the award – see footnote (3) to the Summary Compensation Table. |
| | (3)
| The amounts reflect nonqualified stock options,performance share awards, as discussed under the heading Compensation Discussion and Analysis – Executive Compensation Elements – Long-Term Incentive,that, if earned, will vest at or between the threshold (50% of target) and maximum (150% of target) levels depending on the performance of our stock’s total shareholder return, relative to the S&P 500 Index, over the 36-month period commencing on January 31, 2021, and ending on February 3, 2024. The NEO is also entitled to an accrual of dividend equivalents, equal to the cash amount that would have a termbeen payable on the number of ten yearsperformance shares held by them as of the close of business on the record date for each declared divided, which shall be credited to them as the equivalent amount of shares that could have been purchased as of the close of business on the dividend payment date. The accrued dividend equivalents will be payable when the performance shares on which such dividend equivalents were credited have become earned, vested and become exercisablepayable. |
(4)
| The amounts reflect performance-conditioned time-based restricted shares or restricted stock units, as discussed under the heading Compensation Discussion and Analysis – Executive Compensation Elements – Long-Term Incentive, which will vest in three equal installments of one-third on each of the first three anniversaries of the grant date, provided the NEO has been continually employed with us through those dates.dates and provided that we have achieved positive Adjusted Net Earnings as of the end of any fiscal year during the three-year term of the award. The option exercise priceNEO is also entitled to an accrual of dividend equivalents, equal to the closing price of our common stockcash amount that would have been payable on the grant date,number of restricted shares held by them as quotedof the close of business on the NYSE.record date for each declared divided, which shall be credited to them as the equivalent amount of shares that could have been purchased as of the close of business on the dividend payment date. The accrued dividend equivalents will be payable when the restricted shares on which such dividend equivalents were credited have become earned, vested and payable. |
| | (4)(5)
| The amounts reflectamount reflects time-based restricted shares, as discussed under the heading Compensation Discussion and Analysis – Executive Compensation Elements – Long-Term Incentive, which will vest in three equal installments of one-third on each of the first three anniversaries of the grant date, provided the NEO has been continually employed with us through those dates. The NEO is also entitled to an accrual of dividend equivalents, equal to the cash amount that would have been payable on the number of restricted shares held by them as of the close of business on the record date for each declared divided, which shall be credited to them as the equivalent amount of shares that could have been purchased as of the close of business on the dividend payment date. The accrued dividend equivalents will be payable when the restricted shares on which such dividend equivalents were credited have become earned, vested and payable. |
| | | | | | | | | | | | | (5) | | | The amounts reflect performance share awards, as discussed under the heading Compensation Discussion and Analysis – Executive Compensation Elements – Long-Term Incentive, that, if earned, will vest at or between the threshold (50% of target) and maximum (150% of target) levels depending on the performance of our stock's total shareholder return, relative to a peer group comprised of the S&P 500 Index, over the 36-month period commencing on March 1, 2015 and ending on February 28, 2018.2022 Proxy Statement
| | | 64 | | | | | | |
| | (6) | As discussed under the heading Compensation Discussion and Analysis – Executive Compensation Elements – Long-Term Incentive, in addition to her fiscal 2016 LTI award, Ms. Ballard received a one-time long-term incentive equity award having the same terms as the fiscal 2016 LTI award.
|
TABLE OF CONTENTS
Outstanding Equity Awards at Fiscal Year-End
The following table provides a summary of the NEOs'NEO’s equity-based awards outstanding as of the end of fiscal 2016:2022: | Ms. Barry | | | 3/20/2021 | | | | | | | | | $ | | | | | | 41,419(3) | | | $4,044,151 | | | 18,508(4) | | | $1,807,072 | | | 3/20/2020 | | | 29,167 | | | 58,336(5) | | | 51.65 | | | 3/19/2030 | | | 35,134(3) | | | 3,430,484 | | | 42,645(6) | | | 4,163,858 | | | 3/20/2020 | | | | | | | | | | | | | | | | | | | | | 65,885(7) | | | 6,432,963 | | | 6/11/2019 | | | 41,886 | | | 20,943(5) | | | 65.52 | | | 6/10/2029 | | | 8,904(3) | | | 869,387 | | | 34,494(8) | | | 3,367,994 | | | 6/11/2019 | | | | | | | | | | | | | | | | | | | | | 33,630(9) | | | 3,283,633 | | | 3/20/2019 | | | 20,895 | | | 10,448(5) | | | 69.11 | | | 3/19/2029 | | | 4,682(3) | | | 457,150 | | | 16,445(8) | | | 1,605,641 | | | 3/20/2019 | | | | | | | | | | | | | | | | | | | | | 17,591(9) | | | 1,717,536 | | | 10/1/2015 | | | 33,253 | | | | | | 37.16 | | | 9/30/2025 | | | | | | | | | | | | | | | 3/12/2015 | | | 12,293 | | | | | | 40.85 | | | 3/11/2025 | | | | | | | | | | | | | | | 8/18/2014 | | | 14,730 | | | | | | 29.91 | | | 8/17/2024 | | | | | | | | | | | | | | | 6/19/2013 | | | 3,246 | | | | | | 27.66 | | | 6/18/2023 | | | | | | | | | | | | | | | 4/16/2013 | | | 3,243 | | | | | | 23.66 | | | 4/15/2023 | | | | | | | | | | | | | | | Mr. Bilunas | | | 3/20/2021 | | | | | | | | | | | | | | | 8,631(3) | | | 842,731 | | | 3,857(4) | | | 376,597 | | | 3/20/2021 | | | | | | | | | | | | | | | 8,631(10) | | | 842,731 | | | | | | | | | 3/20/2020 | | | 6,705 | | | 13,411(5) | | | 51.65 | | | 3/19/2030 | | | 8,078(3) | | | 788,736 | | | 9,806(6) | | | 957,458 | | | 3/20/2020 | | | | | | | | | | | | | | | | | | | | | 15,150(7) | | | 1,479,246 | | | 8/20/2019 | | | | | | | | | | | | | | | 1,807(3) | | | 176,435 | | | 4,142(8) | | | 404,376 | | | 8/20/2019 | | | | | | | | | | | | | | | | | | | | | 4,094(9) | | | 399,689 | | | 3/20/2019 | | | | | | 49,050(11) | | | 69.11 | | | 3/19/2029 | | | 2,570(10) | | | 250,935 | | | 2,715(8) | | | 265,093 | | | 3/20/2019 | | | | | | | | | | | | | | | | | | | | | 2,909(9) | | | 283,986 | | | Mr. Bonfig | | | 3/20/2021 | | | | | | | | | | | | | | | 5,502(10) | | | 537,215 | | | 820(4) | | | 80,065 | | | 3/20/2021 | | | | | | | | | | | | | | | 21,574(10) | | | 2,106,485 | | | | | | | | | 3/20/2020 | | | | | | | | | | | | | | | 7,630(10) | | | 744,993 | | | 2,781(6) | | | 271,537 | | | 3/20/2020 | | | | | | | | | | | | | | | 13,464(10) | | | 1,314,625 | | | 4,298(7) | | | 419,608 | | | 3/20/2019 | | | | | | 49,050(11) | | | 69.11 | | | 3/19/2029 | | | 2,570(10) | | | 250,935 | | | 2,715(8) | | | 265,093 | | | 3/20/2019 | | | | | | | | | | | | | | | | | | | | | 2,909(9) | | | 283,986 | | | Mr. Harmon | | | 3/20/2021 | | | | | | | | | | | | | | | 4,532(10) | | | 442,504 | | | 676(4) | | | 65,956 | | | 3/20/2021 | | | | | | | | | | | | | | | 21,574(10) | | | 2,106,485 | | | | | | | | | 3/20/2020 | | | | | | | | | | | | | | | 6,283(10) | | | 613,472 | | | 2,292(6) | | | 223,791 | | | 3/20/2020 | | | | | | | | | | | | | | | | | | | | | 3,540(7) | | | 345,646 | | | 3/20/2019 | | | | | | | | | | | | | | | 1,708(10) | | | 166,769 | | | 1,808(8) | | | 176,484 | | | 3/20/2019 | | | | | | | | | | | | | | | | | | | | | 1,937(9) | | | 189,080 | | | Ms. Scarlett(12) | | | 3/20/2021 | | | | | | | | | | | | | | | 6,904(3) | | | 674,107 | | | 3,086(4) | | | 301,268 | | | 3/20/2020 | | | 1,236 | | | 8,382(5) | | | 51.65 | | | 3/19/2030 | | | 5,048(3) | | | 492,887 | | | 6,129(6) | | | 598,436 | | | 3/20/2020 | | | | | | | | | | | | | | | 20,198(13) | | | 1,972,133 | | | 9,474(7) | | | 925,041 | | | 3/26/2019 | | | | | | 96,166(11) | | | 70.50 | | | 3/25/2029 | | | | | | | | | | | | | | | 3/20/2019 | | | 8,706 | | | 4,354(5) | | | 69.11 | | | 3/19/2029 | | | 1,948(3) | | | 190,203 | | | 6,860(8) | | | 669,762 | | | 3/20/2019 | | | | | | | | | | | | | | | | | | | | | 7,337(9) | | | 716,336 | | | 1/24/2019 | | | | | | 57,109(11) | | | 57.60 | | | 1/23/2029 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | Name | |
Grant Date(1) | | Number of Securities Underlying Unexercised Options Exercisable (#) | | Number of Securities Underlying Unexercised Options Unexercisable (#) | | Option Exercise Price ($) | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | Mr. Joly | | 3/12/2015 | | | | 158,445(3) | | $ | 40.85 |
| | 3/11/2025 | | 77,142(4) | | $ | 2,154,576 |
| | 59,187(5) | | $ | 1,653,093 |
| | | 8/18/2014 | | 61,330(3) | | 122,660(3) | | 29.91 |
| | 8/17/2024 | | 61,588(4) | | 1,720,153 |
| | 149,257(6) | | 4,168,748 |
| | | 4/16/2013 | | 166,905(3) | | 83,453(3) | | 23.66 |
| | 4/15/2023 | | 43,554(4) | | 1,216,463 | | 290,376(7) | | 8,110,202 |
| | | 9/4/2012 | | 350,468(8) | | | | 18.02 |
| | 9/3/2022 | | | | | | | | | Ms. McCollam | | 3/12/2015 | | | | 120,154(3) | | 40.85 |
| | 3/11/2025 | | 39,000(4) | | 1,089,270 |
| | 17,954(5) | | 501,455 |
| | | 8/18/2014 | | 47,311(3) | | 94,623(3) | | 29.91 |
| | 8/17/2024 | | 31,674(4) | | 884,655 |
| | 46,056(6) | | 1,286,344 |
| | | 4/16/2013 | | 128,755(3) | | 64,378(3) | | 23.66 |
| | 4/15/2023 | | 22,400(4) | | 625,632 |
| | 89,603(7) | | 2,502,612 |
| | | 12/10/2012 | | 383,142(3) | | | | 12.39 |
| | 12/9/2022 | | | | | | | | | Ms. Ballard | | 3/12/2015 | | 105,630(3) | | | | 40.85 |
| | 3/11/2025 | | 34,286(4) | | 957,608 |
| | 15,783(5) | | 440,819 |
| | | 8/18/2014 | | 28,036(3) | | 14,018(3) | | 29.91 |
| | 8/17/2024 | | 9,385(4) | | 262,123 |
| | 13,646(6) | | 381,133 |
| | | 4/16/2013 | | 38,150(3) | | 19,075(3) | | 23.66 |
| | 4/15/2023 | | 6,637(4) | | 185,372 |
| | 26,549(7) | | 741,514 |
| | | 1/16/2013 | | 11,084(3) | | | | 14.67 |
| | 1/15/2023 | | | | | | | | | | | 9/19/2012 | | 11,084(3) | | | | 17.94 |
| | 9/18/2022 | | | | | | | | | | | 6/20/2012 | | 11,084(3) | | | | 20.31 |
| | 6/19/2022 | | | | | | | | | | | 4/18/2012 | | 8,334(3) | | | | 22.06 |
| | 4/17/2022 | | | | | | | | | | | 2/1/2012 | | 11,250(9) | | 3,750(9) | | 24.18 |
| | 1/31/2022 | | 417(10) | | 11,647 |
| | | | | | | 9/21/2011 | | 15,000(9) | | | | 24.12 |
| | 9/20/2021 | | | | | | | | | | | 6/20/2011 | | 15,000(9) | | | | 31.54 |
| | 6/19/2021 | | | | | | | | | | | 4/6/2011 | | 20,000(9) | | | | 29.75 |
| | 4/5/2021 | | | | | | | | | | | 1/12/2011 | | 20,000(9) | | | | 35.67 |
| | 1/11/2021 | | | | | | | | | | | 9/20/2010 | | 20,000(9) | | | | 38.32 |
| | 9/19/2020 | | | | | | | | | | | 6/23/2010 | | 16,563(9) | | | | 36.63 |
| | 6/22/2020 | | | | | | | | | | | 4/7/2010 | | 16,563(9) | | | | 44.20 |
| | 4/6/2020 | | | | | | | | | | | 1/13/2010 | | 16,563(9) | | | | 39.73 |
| | 1/12/2020 | | | | | | | | | | | 9/17/2009 | | 16,563(9) | | | | 37.59 |
| | 9/16/2019 | | | | | | | | | | | 6/23/2009 | | 33,125(9) | | | | 32.98 |
| | 6/22/2019 | | | | | | | | | | | 10/31/2008 | | 66,250(9) | | | | 26.88 |
| | 10/30/2018 | | | | | | | | | | | 10/18/2007 | | 66,200(9) | | | | 47.84 |
| | 10/17/2017 | | | | | | | | | | | 10/23/2006 | | 66,200(9) | | | | 55.46 |
| | 10/22/2016 | | | | | | | | | Mr. Mohan | | 3/12/2015 | | | | 52,815(3) | | 40.85 |
| | 3/11/2025 | | 15,783(4) | | 440,819 |
| | 7,892(5) | | 220,424 |
| | | 8/18/2014 | | 20,443(3) | | 40,886(3) | | 29.91 |
| | 8/17/2024 | | 13,686(4) | | 382,250 |
| | 19,901(6) | | 555,835 |
| | | 3/12/2014 | | 15,128(3) | | 30,257(3) | | 25.74 |
| | 3/11/2024 | | 10,527(4) | | 294,019 |
| | | | | | | 4/16/2013 | | 31,791(3) | | 15,896(3) | | 23.66 |
| | 4/15/2023 | | 5,531(4) | | 154,481 |
| | 22,124(7) | | 617,923 |
| | | 3/11/2013 | | 19,970(3) | | 35,330(3) | | 20.08 |
| | 3/10/2023 | | 11,514(4) | | 321,586 |
| | | | | | | 1/16/2013 | | 1,330(3) | | | | 14.67 |
| | 1/15/2023 | | | | | | | | | | | 9/19/2012 | | 1,330(3) | | | | 17.94 |
| | 9/18/2022 | | | | | | | | | | | 4/18/2012 | | 3,000(3) | | | | 22.06 |
| | 4/17/2022 | | | | | | | | | | | 2/1/2012 | | 3,750(9) | | 1,250(9) | | 24.18 |
| | 1/31/2022 | | | | | | | | | | | 9/21/2011 | | 5,000(9) | | | | 24.12 |
| | 9/20/2021 | | | | | | | | | | | 6/20/2011 | | 5,000(9) | | | | 31.54 |
| | 6/19/2021 | | | | | | | | | | | 4/6/2011 | | 5,000(9) | | | | 29.75 |
| | 4/5/2021 | | | | | | | | | | | 1/12/2011 | | 5,000(9) | | | | 35.67 |
| | 1/11/2021 | | | | | | | | | | | 9/20/2010 | | 5,000(9) | | | | 38.32 |
| | 9/19/2020 | | | | | | | | | | | 6/23/2010 | | 5,000(9) | | | | 36.63 |
| | 6/22/2020 | | | | | | | | | | | 4/7/2010 | | 6,250(9) | | | | 44.20 |
| | 4/6/2020 | | | | | | | | | | | 1/13/2010 | | 6,250(9) | | | | 39.73 |
| | 1/12/2020 | | | | | | | | | | | 9/17/2009 | | 6,250(9) | | | | 37.59 |
| | 9/16/2019 | | | | | | | | | | | 6/23/2009 | | 12,500(9) | | | | 32.98 |
| | 6/22/2019 | | | | | | | | | | | 10/31/2008 | | 18,333(9) | | | | 26.88 |
| | 10/30/2018 | | | | | | | | | | | 8/5/2008 | | 20,000(9) | | | | 41.19 |
| | 8/4/2018 | | | | | | | | | | | 10/18/2007 | | 4,878(9) | | | | 47.84 |
| | 10/17/2017 | | | | | | | | | | | 10/23/2006 | | 5,025(9) | | | | 55.46 |
| | 10/22/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | Name | |
Grant Date(1) | | Number of Securities Underlying Unexercised Options Exercisable (#) | | Number of Securities Underlying Unexercised Options Unexercisable (#) | | Option Exercise Price ($) | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | Mr. Nelsen | | 3/12/2015 | | | | 43,572(3) | | 40.85 |
| | 3/11/2025 | | 14,143(4) | | $ | 395,014 |
| | 6,511(5) | | $ | 181,852 |
| | | 8/18/2014 | | 15,186(3) | | 30,373(3) | | 29.91 |
| | 8/17/2024 | | 10,167(4) | | 283,964 |
| | 14,783(6) | | 412,889 |
| | | 4/16/2013 | | 41,328(3) | | 20,665(3) | | 23.66 |
| | 4/15/2023 | | 7,190(4) | | 200,817 |
| | 28,761(7) | | 803,295 |
| | | 1/16/2013 | | 3,325(3) | | | | 14.67 |
| | 1/15/2023 | | | | | | | | | | | 9/19/2012 | | 3,325(3) | | | | 17.94 |
| | 9/18/2022 | | | | | | | | | | | 2/1/2012 | | 7,031(9) | | 2,344(9) | | 24.18 |
| | 1/31/2022 | | 261(10) | | 7,290 |
| | | | | | | 9/21/2011 | | 6,875(9) | | | | 24.12 |
| | 9/20/2021 | | | | | | | | | | | 6/20/2011 | | 9,375(9) | | | | 31.54 |
| | 6/19/2021 | | | | | | | | | | | 4/6/2011 | | 5,000(9) | | | | 29.75 |
| | 4/5/2021 | | | | | | | | | | | 1/12/2011 | | 5,000(9) | | | | 35.67 |
| | 1/11/2021 | | | | | | | | | | | 9/20/2010 | | 5,000(9) | | | | 38.32 |
| | 9/19/2020 | | | | | | | | | | | 6/23/2010 | | 5,000(9) | | | | 36.63 |
| | 6/22/2020 | | | | | | | | | | | 4/7/2010 | | 5,250(9) | | | | 44.20 |
| | 4/6/2020 | | | | | | | | | | | 1/13/2010 | | 5,250(9) | | | | 39.73 |
| | 1/12/2020 | | | | | | | | | | | 9/17/2009 | | 5,250(9) | | | | 37.59 |
| | 9/16/2019 | | | | | | | | | | | 6/23/2009 | | 10,500(9) | | | | 32.98 |
| | 6/22/2019 | | | | | | | | | | | 10/31/2008 | | 10,000(9) | | | | 26.88 |
| | 10/30/2018 | | | | | | | | | | | 8/5/2008 | | 20,000(9) | | | | 41.19 |
| | 8/4/2018 | | | | | | | | | | | 10/18/2007 | | 4,403(9) | | | | 47.84 |
| | 10/17/2017 | | | | | | | | | | | 2/21/2007 | | 13,000(9) | | | | 50.39 |
| | 2/20/2017 | | | | | | | | |
| | (1)
| For a better understanding of the equity-based awards included in this table, we have provided the grant date of each award. |
| | (2)
| These amounts were determined based on the closing price of Best Buy common stock on the NYSE of $97.64 on January 29, 2016,28, 2022, the last trading day in fiscal 2016. 2022. |
| | | | | | | | | | | | | | | | | | | 65 | | | | | | 2022 Proxy Statement |
TABLE OF CONTENTS (3)
| The closing price quotedamount reflects performance-conditioned time-based restricted shares or restricted stock units, including restricted shares or restricted stock units remaining from the original grant and any restricted shares or restricted stock units accrued as dividend equivalents, if applicable (as indicated in the table below), that vest over a three-year period at the rate of one-third per year, beginning one year from the grant date, provided the NEO has been continually employed with us through those dates and provided that we have achieved positive Adjusted Net Earnings as of the end of any fiscal year during the three-year term of the award (the “Performance Condition”). For these awards, the Performance Condition was achieved as of the end of the fiscal year noted in the table below. |
| Ms. Barry | | | 3/20/2021 | | | 2022 | | | 40,613 | | | 806 | | | 3/20/2020 | | | 2021 | | | 33,688 | | | 1,446 | | | 6/11/2019 | | | 2020 | | | 8,356 | | | 548 | | | 3/20/2019 | | | 2020 | | | 4,341 | | | 341 | | | Mr. Bilunas | | | 3/20/2021 | | | 2022 | | | 8,461 | | | 170 | | | 3/20/2020 | | | 2021 | | | 7,744 | | | 334 | | | 8/20/2019 | | | 2020 | | | 1,703 | | | 104 | | | Ms. Scarlett | | | 3/20/2021 | | | 2022 | | | 6,769 | | | 135 | | | 3/20/2020 | | | 2021 | | | 4,840 | | | 208 | | | 3/20/2019 | | | 2020 | | | 1,809 | | | 139 | |
(4)
| The amount reflects an outstanding performance share award assuming a threshold payout (50% of the target grant) plus accrued dividend equivalents (as indicated in the table below) as of fiscal year-end. The number of shares ultimately earned will be based on the NYSEperformance of our stock’s total shareholder return, relative to the S&P 500 Index, over the 36-month period commencing on January 31, 2021, and ending on February 3, 2024. As of the end of fiscal 2022, performance was $27.93.below the threshold payout level for these shares. Under the terms of the awards, dividend equivalent shares accrue assuming a target payout and are adjusted and issued at the end of the performance period based on actual performance but are shown in the table assuming a threshold payout. |
| Ms. Barry | | | 3/20/2021 | | | 18,147 | | | 361 | | | Mr. Bilunas | | | 3/20/2021 | | | 3,781 | | | 76 | | | Mr. Bonfig | | | 3/20/2021 | | | 804 | | | 17 | | | Mr. Harmon | | | 3/20/2021 | | | 662 | | | 14 | | | Ms. Scarlett | | | 3/20/2021 | | | 3,025 | | | 61 | |
| | (3)(5)
| The amount reflects nonqualified stock options that become exercisable over a three-year period at the rate of one-third per year, beginning one year from the grant date, provided the NEO has been continually employed with us through those dates. |
(6)
| The amount reflects an outstanding performance share award assuming a target payout (100% of the target grant) plus accrued dividend equivalents (as indicated in the table below) as of fiscal year-end. The number of shares ultimately earned will be based on the performance of our stock’s total shareholder return, relative to the S&P 500 Index, over the 36-month period commencing on February 2, 2020, and ending on January 28, 2023. As of the end of fiscal 2022, performance was between the threshold and target payout level for these shares. Dividend equivalent shares accrue assuming a target payout and are adjusted and issued at the end of the performance period based on actual performance. |
| Ms. Barry | | | 3/20/2020 | | | 40,884 | | | 1,761 | | | Mr. Bilunas | | | 3/20/2020 | | | 9,399 | | | 407 | | | Mr. Bonfig | | | 3/20/2020 | | | 2,663 | | | 118 | | | Mr. Harmon | | | 3/20/2020 | | | 2,194 | | | 98 | | | Ms. Scarlett | | | 3/20/2020 | | | 5,875 | | | 254 | |
| | | | | | | | | | | | | (4) | | | 2022 Proxy Statement | | | 66 | | | | | | |
TABLE OF CONTENTS (7)
| The amount reflects an outstanding performance share award assuming a maximum payout (150% of the target grant) plus accrued dividend equivalents (as indicated in the table below) as of fiscal year-end. The number of shares ultimately earned will be based on the compound annual growth rate of our enterprise revenue, over the 36-month period commencing on February 2, 2020, and ending on January 28, 2023. As of the end of fiscal 2022, performance was at the maximum payout level for these shares. Under the terms of the awards, dividend equivalent shares accrue assuming a target payout and are adjusted and issued at the end of the performance period based on actual performance but are shown in the table assuming a maximum payout. |
| Ms. Barry | | | 3/20/2020 | | | 63,167 | | | 2,718 | | | Mr. Bilunas | | | 3/20/2020 | | | 14,522 | | | 629 | | | Mr. Bonfig | | | 3/20/2020 | | | 4,115 | | | 183 | | | Mr. Harmon | | | 3/20/2020 | | | 3,389 | | | 152 | | | Ms. Scarlett | | | 3/20/2020 | | | 9,077 | | | 398 | |
(8)
| The amount reflects an outstanding performance share award assuming a maximum payout (150% of the target grant) plus accrued dividend equivalents (as indicated in the table below) as of fiscal year-end. The number of shares ultimately earned will be based on the performance of our stock’s total shareholder return, relative to the S&P 500 Index, over the 36-month period commencing on February 3, 2019, and ending on January 29, 2022. As of the end of fiscal 2022, performance was between the target and maximum payout level for these shares. Under the terms of the awards, dividend equivalent shares accrue assuming a target payout and are adjusted and issued at the end of the performance period based on actual performance but are shown in the table assuming a maximum payout. |
| Ms. Barry | | | 6/11/2019 | | | 32,141 | | | 2,354 | | | 3/20/2019 | | | 15,215 | | | 1,230 | | | Mr. Bilunas | | | 8/20/2019 | | | 3,881 | | | 261 | | | 3/20/2019 | | | 2,507 | | | 209 | | | Mr. Bonfig | | | 3/20/2019 | | | 2,507 | | | 209 | | | Mr. Harmon | | | 3/20/2019 | | | 1,667 | | | 141 | | | Ms. Scarlett | | | 3/20/2019 | | | 6,339 | | | 521 | |
(9)
| The amount reflects an outstanding performance share award assuming a maximum payout (150% of the target grant) plus accrued dividend equivalents (as indicated in the table below) as of fiscal year-end. The number of shares ultimately earned will be based on the compound annual growth rate of our enterprise revenue, over the 36-month period commencing on February 3, 2019, and ending on January 29, 2022. As of the end of fiscal 2022, performance was at the maximum payout level for these shares. Under the terms of the awards, dividend equivalent shares accrue assuming a target payout and are adjusted and issued at the end of the performance period based on actual performance but are shown in the table assuming a maximum payout. |
| Ms. Barry | | | 6/11/2019 | | | 31,337 | | | 2,294 | | | | | | 3/20/2019 | | | 16,280 | | | 1,311 | | | Mr. Bilunas | | | 8/20/2019 | | | 3,834 | | | 260 | | | 3/20/2019 | | | 2,682 | | | 227 | | | Mr. Bonfig | | | 3/20/2019 | | | 2,682 | | | 227 | | | Mr. Harmon | | | 3/20/2019 | | | 1,784 | | | 153 | | | Ms. Scarlett | | | 3/20/2019 | | | 6,783 | | | 554 | |
| | | | | | | | | | | | | | | | | | | 67 | | | | | | 2022 Proxy Statement |
TABLE OF CONTENTS (10)
| The amount reflects time-based restricted shares or restricted stock units, including restricted shares or restricted stock units remaining from the original grant and any restricted shares or restricted stock units accrued as dividend equivalents, if applicable (as indicated in the table below), that vest over a three-year period at the rate of one-third per year, beginning one year from the grant date, provided the NEO has been continually employed with us through those dates. |
| Mr. Bilunas | | | 3/20/2021 | | | 8,461 | | | 170 | | | 3/20/2019 | | | 2,384 | | | 186 | | | Mr. Bonfig | | | 3/20/2021 | | | 5,394 | | | 108 | | | 3/20/2021 | | | 21,153 | | | 421 | | | 3/20/2020 | | | 7,315 | | | 315 | | | 3/20/2020 | | | 12,908 | | | 556 | | | 3/20/2019 | | | 2,384 | | | 186 | | | Mr. Harmon | | | 3/20/2021 | | | 4,443 | | | 89 | | | 3/20/2021 | | | 21,153 | | | 421 | | | 3/20/2020 | | | 6,024 | | | 259 | | | 3/20/2019 | | | 1,585 | | | 123 | |
| | (5)(11)
| The amount reflects an outstanding performance share award assuming a payout at threshold (50% of the target grant). The number of shares ultimately earned will be based on the performance of our stock's total shareholder return, relative to a peer group comprised of the S&P 500 Index, over the 36-month period commencing on March 1, 2015 and ending on February 28, 2018. As of the end of fiscal 2016, performance was beneath the threshold payout level for these shares. |
| | (6) | The amount reflects an outstanding performance share award assuming payout at target. The number of shares ultimately earned will be based on the performance of our stock's total shareholder return, relative to a peer group comprised of the S&P 500 Index, over the 36-month period commencing on August 1, 2014 and ending on July 31, 2017. As of the end of fiscal 2016, performance was between the threshold and target payout level for these shares. |
| | (7) | The amount reflects an outstanding performance share award assuming a maximum payout (150% of the target grant). The number of shares ultimately earned will be based on the performance of our stock's total shareholder return, relative to a peer group comprised of the S&P 500 Index, over the 36-month period commencing on April 1, 2013 and ending on March 31, 2016. As of the end of fiscal 2016, performance was between the target and maximum payout level for these shares. |
| | (8) | The amount reflectsrepresents nonqualified stock options that becamewill become exercisable in four equal installments of 25% each, with the first installment vesting on the grant date and the remaining three installments vesting on eachfourth anniversary of the next three anniversaries of the grant date. |
| | (9) | The amount reflects nonqualified stock options that become exercisable over a four-year period at the rate of 25% per year, beginning one year from the grant date, provided the NEO has been continually employed with us through those dates.that date. |
(12)
| Ms. Scarlett will meet the age and service conditions for qualified retirement, as defined in our award agreements, in June 2023, which is during the term of her fiscal 2022 time-based awards and prior to the end of the performance period for her fiscal 2022 performance share award (see awards with March 20, 2021, grant date). The effect of qualified retirement on all of our outstanding equity awards is discussed in the Potential Payments Upon Termination of Change-of-Control section. |
(10)(13)
| The amount reflects time-based restricted shares, which willincluding 19,362 restricted shares remaining from the original grant and 836 restricted shares accrued as dividend equivalents, that vest in equal installments over a four-year period at the rate of 25% per year, beginning one yearfull two years from the grant date, provided the NEOMs. Scarlett has been continually employed with us through those dates.that date. |
| | | | | | | | | | | | | | | | 2022 Proxy Statement | | | 68 | | | | | | |
TABLE OF CONTENTS
Option Exercises and Stock Vested
The table below provides a summary of the value realized in connection with stock option awards exercised and stock awards vested for our NEOs during fiscal 2016.2022. | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | Name | | Number of Shares Acquired on Exercise (#) | | Value Realized on Exercise(1) ($) | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting(2) ($) | Mr. Joly | | — |
| | $ | — |
| | 499,688(3) | | $ | 18,238,473 |
| Ms. McCollam | | — |
| | — |
| | 317,756(4) | | 11,460,330 |
| Ms. Ballard | | — |
| | — |
| | 60,203(5) | | 2,143,230 |
| Mr. Mohan | | 30,000(6) |
| | 557,658 |
| | 92,857(7) | | 3,455,950 |
| Mr. Nelsen | | 14,975(8) |
| | 277,491 |
| | 52,066(9) | | 1,244,973 |
|
| Ms. Barry | | | — | | | $— | | | 71,643(3) | | | $8,446,248 | | | Mr. Bilunas | | | — | | | — | | | 13,764(4) | | | 1,623,175 | | | Mr. Bonfig | | | — | | | — | | | 18,346(5) | | | 2,192,365 | | | Mr. Harmon | | | — | | | — | | | 5,576(6) | | | 659,499 | | | Ms. Scarlett | | | 2,955(7) | | | 179,989 | | | 16,717(8) | | | 1,973,375 | |
| | (1)
| Value based on market value of Best Buy common stock at the time of exercise, minus the exercise cost. |
| | (2)
| Value based on the closing market price of Best Buy common stock on the vesting date. |
| | (3)
| The amount represents: |
| | (a)
| the partial vesting of the time-based restricted shares granted under our fiscal 2015 LTI program: one-third (30,794 shares) of the August 18, 2014 grant,7,502 shares that were granted on March 12, 2018, which vested on August 18, 2015;March 12, 2021; 4,606 shares that were granted on March 20, 2019, which vested on March 20, 2021; 8,797 shares that were granted on June 11, 2019, which vested on June 12, 2021; and 17,231 shares that were granted on March 20, 2020, which vested on March 20, 2021; |
| | (b) | the partial vesting of the time-based restricted shares granted under our fiscal 2014 LTI program: one-third (43,554 shares) of the April 16, 2013 grant, which vested on April 16, 2014; |
| | (c) | the final vesting for Mr. Joly's September 4, 2012 time-based restricted stock unit award: (i) 73,992 restricted stock units, which vested in 8 equal installments of 9,249 restricted stock units on the fourth day of each month in fiscal 2016 through September 4, 2015 and (ii) 19,739 restricted stock units earned as dividend equivalents, which also vested during fiscal 2016. The vested units are payable to Mr. Joly in the form of shares of our common stock (one share per unit); however, issuance of the shares to Mr. Joly is deferred until after his separation from the Company per the terms of the award agreement; and |
| | (d)
| the shares (299,859) and dividend equivalents (31,750)(16,506) acquired upon the vesting and settlement of a performance share award whichthat was granted on September 4, 2012March 12, 2018, and was based on the performance of our stock'sstock’s total shareholder return, relative to a peer group comprised of the S&P 500 Index, over a 36-month period whichthat ended on SeptemberJanuary 30, 2015. |
| | (4) | The amount represents: |
| | (a) | the partial vesting of the time-based restricted shares granted under our fiscal 2015 LTI program: one-third (15,836) of the August 18, 2014 grant, which vested on August 18, 2015; |
| | (b) | the partial vesting of the time-based restricted shares granted under our fiscal 2014 LTI program: one-third (22,399 shares) of the April 16, 2013 grant, which vested on April 16, 2015; |
| | (c) | the final vesting for Ms. McCollam's December 10, 2012 time-based restricted share award (35,872 shares and 4,061 shares earned as dividend equivalents), which occurred on December 10, 2015;2021; and |
| | (d)(c)
| the shares (218,819) and dividend equivalents (20,769)(17,001) acquired upon the vesting and settlement of a performance share award whichthat was granted on December 10, 2012March 12, 2018, and was based on the performancecompound annual growth rate of our stock's total shareholder return, relative to a peer group comprised of the S&P 500 Index,enterprise revenue, over a 36-month period whichthat ended on SeptemberJanuary 30, 2015.2021. |
| | (5)(4)
| The amount represents: |
| | (a)
| the partial vesting of the time-based restricted shares granted under our fiscal 2015 LTI program: one-third (4,692) of the1,685 shares that were granted on March 12, 2018, which vested on March 12, 2021; 2,535 shares that were granted on March 20, 2019, which vested on March 20, 2021; 1,801 shares that were granted on August 18, 2014 grant,20, 2019, which vested on August 18, 2015;20, 2021; and 3,964 shares that were granted on March 20, 2020, which vested on March 20, 2021; |
| | (b) | the partial vesting of the time-based restricted shares granted under our fiscal 2014 LTI program: one-third (6,637 shares) of the April 16, 2013 grant, which vested on April 16, 2015; |
| | (c) | the partial vesting of four time-based restricted share awards granted under our fiscal 2013 LTI program: (i) one-third (926 shares) of the April 18, 2012 grant, which vested on April 20, 2015, (ii) one-third (926 shares) of the June 20, 2012 grant, which vested on June 22, 2015, (iii) one-third (926 shares) of the September 19, 2012 grant, which vested on September 21, 2015 and (iv) one-third (926 shares) of the January 16, 2013 grant, which vested on January 19, 2016; |
| | (d) | the final vesting (25,668 shares) of Ms. Ballard's June 21, 2012 time-based restricted share award, which occurred on June 22, 2015; |
| | (e) | the partial vesting of three time-based restricted share awards granted under our fiscal 2012 LTI program: (i) 25% (417 shares) of the February 2, 2011 grant, which vested on February 2, 2015, (ii) 25% (417 shares) of the June 20, 2011 grant, which vested on June 22, 2015, and (iii) 25% (417 shares) of the September 21, 2011 grant, which vested on September 21, 2015; and |
| | (f)
| the shares (16,668) and dividend equivalents (1,583)(1,860) acquired upon the vesting and settlement of a performance share award whichthat was granted on September 19, 2012March 12, 2018, and was based on the performance of our stock'sstock’s total shareholder return, relative to a peer group comprised of the S&P 500 Index, over a 36-month period whichthat ended on SeptemberJanuary 30, 2015. |
| | (6) | On September 16, 2015, Mr. Mohan exercised options to purchase 27,340 shares at an exercise price of $20.08, 1,330 shares at an exercise price of $20.31,2021; and 1,330 shares at an exercise price of $14.67. These options were exercised when the market prices of a share of Best Buy common stock were $38.43 (27,340 shares) and $38.50 (2,660 shares). |
| | (7) | The amount represents: |
| | (a) | the partial vesting of the time-based restricted shares granted under our fiscal 2015 LTI program: one-third (6,843) of the August 18, 2014 grant, which vested on August 18, 2015; |
| | (b) | the partial vesting (5,263 shares) of Mr. Mohan's March 12, 2014 time-based restricted share award, which occurred on March 12, 2015; |
(c)
| | (c) | the partial vesting of the time-based restricted shares granted under our fiscal 2014 LTI program: one-third (5,531 shares) of the April 16, 2013 grant, which vested on April 16, 2015; |
| | (d) | the partial vesting (11,514 shares) of Mr. Mohan's March 11, 2013 time-based restricted share award, which vested on March 11, 2015; |
| | (e) | the partial vesting of four time-based restricted share awards granted under our fiscal 2013 LTI program: (i) one-third (334 shares) of the April 18, 2012 grant, which vested on April 20, 2015, (ii) one-third (334 shares) of the June 20, 2012 grant, which vested on June 22, 2015, (iii) one-third (334 shares) of the September 19, 2012 grant, which vested on September 21, 2015, and (iv) one-third (334 shares) of the January 16, 2013 grant, which vested on January 19, 2015; |
| | (f) | the final vesting (5,545 shares) of Mr. Mohan's June 21, 2012 time-based restricted share award, which occurred on June 22, 2015; |
| | (g) | the shares (6,000) and dividend equivalents (570)(1,919) acquired upon the vesting and settlement of a performance share award whichthat was granted on September 19, 2012March 12, 2018, and was based on the performancecompound annual growth rate of our stock's total shareholder return, relative to a peer group comprised of the S&P 500 Index,enterprise revenue, over a 36-month period whichthat ended on SeptemberJanuary 30, 2015; and2021. |
(5)
| The amount represents: |
(h)(a)
| the vesting of restricted shares granted under our LTI program: 1,685 shares that were granted on March 12, 2018, which vested on March 12, 2021; 2,535 shares that were granted on March 20, 2019, which vested on March 20, 2021; and 10,347 shares that were granted on March 20, 2020, which vested on March 20, 2021; |
(b)
| the shares (46,557) and dividend equivalents (3,698)(1,860) acquired upon the vesting and settlement of a performance share award whichthat was granted on March 13, 201312, 2018, and was based on the performance of our stock'sstock’s total shareholder return, relative to a peer group comprised of the S&P 500 Index, over a 36-month period whichthat ended on SeptemberJanuary 30, 2015.2021; and |
(c)
| the shares (1,919) acquired upon the vesting and settlement of a performance share award that was granted on March 12, 2018, and was based on the compound annual growth rate of our enterprise revenue, over a 36-month period that ended on January 30, 2021. |
(8)(6)
| The amount represents the vesting of restricted shares granted under our LTI program: 809 shares that were granted on January 7, 2019, which vested on January 7, 2022; 1,685 shares that were granted on March 20, 2019, which vested on March 20, 2021; and 3,082 shares that were granted on March 20, 2020, which vested on March 20, 2021. |
(7)
| On September 21, 2015, Mr. NelsenJune 11, 2021, Ms. Scarlett exercised 2,955 stock options to purchase 3,325 shares at an exercisehaving a strike price of $20.31, 2,500 shares at an exercise price of $22.06, 2,500 shares at an exercise price of $24.12, 3,325 shares at an exercise price of $17.94 and 3,325 shares at an exercise price of $14.67. These options were all exercised$51.65 when the market price of a share of Best Buy common stock was $37.99.$112.56. |
| | (9)(8)
| The amount represents: |
| | (a)
| the partial vesting of the time-based restricted shares granted under our fiscal 2015 LTI program: one-third (5,083) of the August 18, 2014 grant,2,247 shares that were granted on March 12, 2018, which vested on August 18, 2015;March 12, 2021; 1,924 shares that were granted on March 20, 2019, which vested on March 20, 2021; and 2,479 shares that were granted on March 20, 2020, which vested on March 20, 2021; |
| | (b) | the partial vesting of the time-based restricted shares granted under our fiscal 2014 LTI program: one-third (7,190 shares) of the April 16, 2013 grant, which vested on April 16, 2015; |
| | (c) | the partial vesting of four time-based restricted share awards granted under our fiscal 2013 LTI program: (i) one-third (834 shares) of the April 18, 2012 grant, which vested on April 20, 2015, (ii) one-third (834 shares) of the June 20, 2012 grant, which vested on June 22, 2015, (iii) one-third (834 shares) of the September 19, 2012 grant, which vested on September 21, 2015 and (iv) one-third (834 shares) of the January 16, 2013 grant, which vested on January 19, 2016; |
| | (d) | the final vesting (19,251 shares) of Mr. Nelsen's June 21, 2012 time-based restricted share award, which occurred on June 22, 2015; |
| | (e) | the partial vesting of three time-based restricted share awards granted under our fiscal 2012 LTI program: (i) 25% (260 shares) of the February 2, 2011 grant, which vested on February 2, 2015; (ii) 25% (261 shares) of the June 20, 2011 grant, which vested on June 22, 2015, and (iii) 25% (261 shares) of the September 21, 2011 grant, which vested on September 21, 2015; and |
| | (f)
| the shares (15,000) and dividend equivalents (1,424)(4,959) acquired upon the vesting and settlement of a performance share award whichthat was granted on September 19, 2012March 12, 2018, and was based on the performance of our stock'sstock’s total shareholder return, relative to a peer group comprised of the S&P 500 Index, over a 36-month period whichthat ended on SeptemberJanuary 30, 2015.2021; and |
(c)
| the shares (5,108) acquired upon the vesting and settlement of a performance share award that was granted on March 12, 2018, and was based on the compound annual growth rate of our enterprise revenue, over a 36-month period that ended on January 30, 2021. |
| | | | | | | | | | | | | | | | | | | 69 | | | | | | 2022 Proxy Statement |
TABLE OF CONTENTS Nonqualified Deferred Compensation
Deferred Compensation Plan.The following table shows the account balances at January 30, 2016, and the contributions and earnings during fiscal 2016, for participating NEOs under the Best Buy Co., Inc. Sixth Amended and Restated Deferred Compensation Plan as amended ("(“Deferred Compensation Plan"Plan”), which is described in greater detail below the table. The table also includes the value of restricted stock units that have vested but, as of the end of fiscal 2016, have not been issued to Mr. Joly as shares pursuant to the terms of his award agreement. | | | | | | | | | | | | | | | | | | | | | | | Name | | Executive Contributions in Last Fiscal Year |
| | Registrant Contributions in Last Fiscal Year |
| | Aggregate Earnings (Losses) in Last Fiscal Year |
| | Aggregate Withdrawals/ Distributions |
| | Aggregate Balance at Last Fiscal Year End |
| | Mr. Joly | | $ | 2,647,896 |
| (1) | $ | — |
| | $ | 649,872 |
| (2) | $ | — |
| | $ | 10,362,030 |
| (3) | Ms. McCollam | | — |
| | — |
| | — |
| | — |
| | — |
| | Ms. Ballard | | — |
| | — |
| | (88,576 | ) | | — |
| | 1,752,142 |
| (4) | Mr. Mohan | | — |
| | — |
| | (5,413 | ) | | — |
| | 121,840 |
| (5) | Mr. Nelsen | | — |
| | — |
| | — |
| | — |
| | — |
| |
| | (1) | This amount reflects the value of the portion of Mr. Joly's September 4, 2012 restricted stock unit award (73,992 units) that vested during fiscal 2016. The 73,992 vested units are payable to Mr. Joly in the form of shares of our common stock (one share per unit). The shares were a part of the equity granted to Mr. Joly to compensate him for certain forfeitures he incurred upon termination of his employment with his former employer. The shares will be issued to Mr. Joly within six months following his separation from the Company, pursuant to his employment arrangement with the Company as disclosed on the Current Report on Form 8-K filed by the Company on August 21, 2012. |
| | (2) | This amount reflects the value of the dividend equivalents earned by Mr. Joly relative to his September 4, 2012 restricted stock unit award which vested during fiscal 2016 (19,739 dividend equivalent units). The 19,739 units are payable to Mr. Joly in the form of shares of our common stock (one share per unit). The shares will be issued to Mr. Joly within six months following his separation from the Company. |
| | (3) | This amount reflects the end of fiscal year value of all vested restricted stock units and related dividend equivalents from Mr. Joly's September 4, 2012 award (in total, 332,964 units and 38,036 dividend equivalent units), calculated based on the closing price of our common stock ($27.93) as quoted on the NYSE on January 29, 2016, the last business day in fiscal 2016. The entire amount has been previously reported in the “Stock Awards” column of the Summary Compensation Table.
|
| | (4) | This amount includes $859,369 that has previously been reported as either "Salary" or "Non-Equity Incentive Plan Compensation" in the Summary Compensation Table.
|
| | (5) | No portion of this amount has been previously reported in the Summary Compensation Table.
|
Deferred Compensation Plan. The Company's Deferred Compensation Plan is unfunded and unsecured. We believe the plan provides a tax-deferred retirement savings vehicle that plays an important role in attracting and retaining executive talent. The Deferred Compensation Plan allows highly compensated employees, including the NEOs, to defer:
Up to 75% of base salary; and
Up to 100% of a cash bonus (earned and paid in the same year) and short-term incentive compensation (earned and paid in different years), as applicable.
Amounts deferred under and contributed to the Deferred Compensation Plan are credited or charged with the performance of investment options selected by the participants. The investment options are notional and do not represent actual investments, but rather serve as a measurement of performance. During fiscal 2022, none of the NEOs carried a balance in or made any contributions to the Deferred Compensation Plan. The options available under the Deferred Compensation Plan and their one-year annualized averageannual rates of return as of the end of fiscal 2016,December 31, 2021, were as follows: | | | | Investment | | Investment | | | Rate of Return(1) | | NVIT Money Market | Fidelity VIP Balanced Service | — | % | 18.13% | | | Vanguard VIF International | | | -1.54% | | | PIMCO VIT Total Return Admin | | (1.19 | )%-1.26% | | | Vanguard VIF Small Company Growth | | | 14.22% | | | PIMCO VIT High-Yield BondHigh Yield Admin | | (3.22 | )%3.65% | | Fidelity VIP II Asset Manager | Vanguard VIF Equity Income | (5.24 | )% | 25.33% | | Vanguard VIF Diversified Value | | (3.11 | )% | Vanguard VIF Equity Index | | (0.76 | )%28.55% | | MFS VIT Growth Series | NVIT Government Money Market | 3.79 | % | 0.00% | | | Franklin VIPTVIP Small Cap Value Securities | | (6.49 | )%25.37% | | Wells Fargo Advantage VT Small Cap | T. Rowe Price Blue Chip Growth | | (12.81 | )% | Vanguard VIF International17.62% | | (8.72 | )% |
| | (1) | Rate of return is net of investment management fees, fund expenses or administrative charges, as applicable. |
Participants who elect to defer compensation under the Deferred Compensation Plan also select when the deferred amounts will be distributed to them. Distributions may be made in a specific year, or at a specified time that begins on or after the participant'sparticipant’s retirement. Distributions are paid in a lump sum or in quarterly installments, depending on the participant'sparticipant’s election at the time of deferral. However, if a participant'sparticipant’s employment ends prior to retirement, a distribution is made promptly in a lump sum or in quarterly installments, depending on their initial election and account balance.
We do not provide employer-matching contributions for amounts deferred under the plan. Participants are fully vested in their contributions.
Potential Payments Upon Termination or Change-of-Control Upon termination of employment or in the event the Company experiences a change-of-control, our NEOs may be eligible to receive certain payments and their outstanding equity awards may be impacted. Following is a summary of the effects of various termination and change-of-control scenarios for each form of compensation, including a quantitative disclosure of the estimated payments and realizable value for each scenario assuming an effective date of January 29, 2022, the end of fiscal 2022, for each NEO.
Cash payments.compensation. Pursuant to the terms of ourthe Company’s severance plan as of the end of fiscal 2022, and subject to entering into a separation agreement with us, our executive officers are generally eligible for: severance pay equal to two years of base salary; a payment equal to 150% of the cost of 23 months of medical, dental and vision benefits; a payment equal to 17 months of basic life insurance coverage; and payment of $25,000 in lieu of providing outplacement services and other tax and financial assistance upon involuntary termination due to job elimination, reduction in force, business restructuring or other circumstances as we determine at our discretion, our NEOs (other than Mr. Joly and Ms. McCollam, who have employment agreements) are eligible for: severance pay equal to two years of base salary; a payment equal to the cost of 24 months of basic employee benefits such as medical, dental and life insurance; and payment of $25,000 in lieu of providing outplacement services and other tax and financial assistance.discretion. For more detail regarding our severance plan, see the Compensation Discussion and Analysis — Executive Compensation Elements — Other Compensation — Severance Plan.section.
Mr. Joly and | | | | | | | | | | | | | | | | 2022 Proxy Statement | | | 70 | | | | | | |
TABLE OF CONTENTS Ms. McCollam'sBarry’s employment agreements entitle themagreement entitles her to participate in the Company'sCompany’s severance plan, as detailed above, but also provide enhanced benefits under certain termination scenarios. They both receive an enhancedprovides that she is eligible for the same severance offeringpay if she were to be involuntarily terminated without Cause or were to voluntarily terminate her employment for Good Reason. Additionally, upon involuntary termination without Cause or voluntary termination for Good Reason on or within 12 months following (or in anticipation of) a change-of-control, Ms. Barry is eligible for enhanced severance equal to (a) two times the sum of their base salary plus target bonus and (b) a pro-ratapro rata annual bonus payment, dependent on actual performance under the Company's STICompany’s short-term incentive plan for the fiscal year in which the termination occurs. Additionally, The following table provides, for the specified NEOs, as of the end of fiscal 2022, the potential severance amount they are both eligible for severance paymentsunder the scenarios discussed above. | Ms. Barry | | | $2,687,755 | | | $2,687,755 | | | $2,687,755 | | | $9,164,422 | | | Mr. Bilunas | | | — | | | — | | | 1,687,560 | | | — | | | Mr. Bonfig | | | — | | | — | | | 1,357,491 | | | — | | | Mr. Harmon | | | — | | | — | | | 1,346,820 | | | — | | | Ms. Scarlett | | | — | | | — | | | 1,873,965 | | | — | |
(1)
| Pursuant to our Severance Plan, our NEOs are eligible for cash severance, as detailed above the table, if they are involuntarily terminated as a result of job elimination, reduction in force or business restructuring (or other circumstances at our discretion). |
Under our STI plan, which is discussed in more detail in the Compensation Discussion and Analysis – Executive Compensation Elements – Short-Term Incentive section, our NEOs must remain employed with us through the end of the performance period in order to receive any payouts under the plan. If an NEO is terminated with Cause, they are terminated involuntarily without Cause or if they terminatenot eligible for any STI plan payments. In fiscal 2022, all of the NEOs were employed with us through the end of fiscal 2022, which was the end of the fiscal 2022 STI plan. Each of their employment voluntarily for Good Reason (outside of a change-of-control) as detailedfiscal 2022 payments are discussed in the tables that follow.Compensation Discussion and Analysis – Executive Compensation Elements – Short-Term Incentive and Summary Compensation Table sections.
Nonqualified stock options. Our award agreements dictate what happens to unvested stock options and how long vested stock options are exercisable following different types of termination events. The following chart illustrates the treatment of outstandingthese various treatments under each possible scenario for stock options granted to our NEOs under various scenarios:our long-term incentive award programs. | | | | | Event | | Event | | | Effect on Vested Stock Options(1) | | | Effect on Unvested Stock Options | | | Voluntary termination without Good Reason(2)
| | | Stock options granted under our LTI program are exercisable for a 60-day period following the termination date.
Sign-on stock options granted to Mr. Joly and Ms. McCollam in fiscal 2013 (on September 4, 2012 and December 10, 2012, respectively) (the "Sign-On Stock Options") are exercisable for a 90-day period following the termination date.
| | | All stock options are forfeited.
| | | VoluntaryInvoluntary termination for Good Reason(2)Cause
| | | Not exercisable. | | | All stock options are forfeited. | | | Involuntary termination without Cause | | | Stock options granted under our LTI program are exercisable for a 60-day period following the termination date.
Mr. Joly and Ms. McCollam's Sign-On Stock Options are exercisable for a two-year period following the termination date.
| | | All stock options are forfeited. | | Involuntary termination for Cause | | Not exercisable. | | All stock options are forfeited. | Involuntary termination without
CauseTermination(2) within 12 months of a change-of-control
| | | Stock options granted under our LTI program are exercisable for a 60-day period following the termination date.
Mr. Joly and Ms. McCollam's Sign-On Stock Options are exercisable for a two-year period following the termination date.
| | All stock options are forfeited. | Termination(3) within 12 months of a change-of-control
| | Stock options granted under our LTI program are exercisable for a 60-day period following the termination date.
Mr. Joly and Ms. McCollam's Sign-On Stock Options are exercisable for a two-year period following the termination date.
| | All stock options vest 100%.
| | | Death or disability | | | Generally exercisable for a one-year period. | | | All stock options vest 100%. | | | Qualified retirement(4)(3) | | | Generally exercisable for a one- to three-year period depending on the terms and conditions of the respective award agreement. | | | Stock options granted since fiscal 2015 continueContinue to vest according to their normal vesting terms.
Stock options granted prior to fiscal 2015 vest 100%.
| |
| | (1)
| Stock options may not be exercised after their expiration dates under any circumstance. |
(2)
| | (2) | For awards granted prior to fiscal 2015, this means involuntary termination without Cause or voluntary termination for Good Reason. Good Reason is usually deemed to exist if the Company makes a material adverse change to the NEO'sNEO’s title, responsibilities or salary or requires the NEO to work more than 50 miles from the corporate office location in Richfield, MN (except for temporary business-related travel). For awards granted in fiscal 2015 and thereafter, this means only involuntary termination without Cause. |
(3)
| Qualified Retirement is defined in our employment and award agreements as: retirement by an employee, including our NEOs, on or after their 60th birthday, so long as they have been employed with the Company continuously for at least the five-year period immediately preceding their retirement date. |
| | | | | | | | | | | | | (3) | | | | | | 71 | | | | | | 2022 Proxy Statement |
TABLE OF CONTENTS The table below provides, for the specified NEOs, as of the end of fiscal 2022, the value of their unvested, in-the-money stock options (as detailed in the Outstanding Equity Awards at Fiscal Year End section), under the situations discussed above. All values below were calculated using the closing price of our common stock as quoted on the NYSE on January 28, 2022, the last business day in fiscal 2022. | Ms. Barry | | | $3,653,643 | | | $3,653,643 | | | Mr. Bilunas | | | 2,016,168 | | | 2,016,168 | | | Mr. Bonfig | | | 1,399,397 | | | 1,399,397 | | | Mr. Harmon | | | — | | | — | | | Ms. Scarlett | | | 5,406,297 | | | 5,406,297 | |
(1)
| Specifically, termination on or within 12 months of a change-of-control. For awards granted prior to fiscal 2015, this means involuntary termination without Cause or voluntary termination for Good Reason. For awards granted in fiscal 2015 and thereafter, this means only involuntary termination without Cause. |
Restricted share awards. Pursuant to our award agreements, all unvested restricted share and restricted stock unit awards (including both time-based awards and time-based awards subject to performance conditions) held by our NEOs fully vest in the event of death or termination due to disability. Additionally, upon qualified retirement any unvested restricted shares and restricted stock units would continue to vest according to their normal vesting schedule, subject to achievement of performance conditions (where applicable). Under all other termination scenarios, unvested restricted shares and restricted stock units are forfeited and there are no change-of-control provisions which impact them. The table below provides, for the specified NEOs, as of the end of fiscal 2022, the value of their unvested restricted share and restricted stock unit awards (as detailed in the Outstanding Equity Awards at Fiscal Year End section) in the event of their death or disability. All values below were calculated using the closing price of our common stock as quoted on the NYSE on January 28, 2022, the last business day in fiscal 2022. (4) | Qualified Retirement is defined in our employment and award agreements as: retirement by an employee, including our NEOs, on or after their 60th birthday, so long as they have been employed continuously for at least the five-year period immediately preceding their retirement date.Ms. Barry
| | | $8,801,172 | | | Mr. Bilunas | | | 2,058,837 | | | Mr. Bonfig | | | 4,954,254 | | | Mr. Harmon | | | 3,329,231 | | | Ms. Scarlett | | | 3,329,329 | |
Time-based restricted share awards. The following chart illustrates the treatment of unvested time-based restricted shares under various scenarios. | | | | | | Outstanding Awards | | Event | | Effect on Unvested Shares | Fiscal 2016 and fiscal 2015 LTI program time-based restricted share awards (all NEOs) | | -Death or disability | | -Vest 100% | | -Qualified retirement | | -Continue to vest according to normal vesting terms without risk of forfeiture | Fiscal 2014 LTI program time-based restricted share awards (all NEOs) | | -Qualified retirement | | -Vest 100% | Fiscal 2012 LTI program time-based restricted share awards (Ms. Ballard and Mr. Nelsen) | | -Death or disability | | -All restrictions on the shares lapse and they become non-forfeitable and transferable | | -Qualified retirement | | | -Change-of-control(1)
| |
| | (1) | Means involuntary termination without Cause or voluntary termination for Good Reason within 12 months following a change-of-control. |
Performance share awards. The following chart illustrates the treatment of outstanding performance share awards under various scenarios.scenarios pursuant to our award agreements. | Event | | | | Outstanding Awards | | Event | | Effect on Unearned Shares | | Fiscal 2016 and fiscal 2015 LTI program performance share awards (all NEOs)
| | -Death or disability | | | -Deemed earned on a pro-ratapro rata basis (number of days employed through termination / total number of days in performance period) based on the level of performance achieved as of the termination date(as determined as of the last completed fiscal quarter or fiscal year, depending on the performance metric)
| | | -Involuntary termination without Cause
-Qualified retirement | | | -Deemed earned on a pro-ratapro rata basis (number of days employed through termination / total number of days in performance period) based on the level of performance achieved as of the end of the performance period | | -Qualified retirement | | | -Change-of-control | | | -Deemed earned based on the level of performance achieved or at target, whichever is greater, as of the date of the change-of-control.change-of-control (as determined as of the last completed fiscal quarter or fiscal year, depending on the performance metric). Issuance of earned shares is subject to the NEO'sNEO’s continued employment through the end of the performance period
| | | -Termination following a change-of-control due to: death or disability, or involuntary termination without Cause or qualified retirement | | | -A pro-ratapro rata portion (determined by number of days employed through termination / total number of days in performance period) of those shares deemed earned as of the date of the change-of-control are issued to the NEO | |
| | | | | | | | | | | | | Fiscal 2014 LTI program performance share awards (all NEOs)
| | -Death or disability | | -Deemed earned2022 Proxy Statement
| | | 72 | | | | | | |
TABLE OF CONTENTS The table below provides, for the specified NEOs, as of the end of fiscal 2022, the value of their outstanding performance share awards (as detailed in the Outstanding Equity Awards at Fiscal Year End section), under the situations discussed above, with the exception of qualified retirement, which does not currently apply to any of our NEOs. All values below were calculated using the closing price of our common stock as quoted on the NYSE on January 28, 2022, the last business day in fiscal 2022, and assume the same vesting percentage (50%, 100% or 150%) as reflected in the Outstanding Equity Awards at Fiscal Year End section. | Ms. Barry | | | $17,307,636 | | | $17,307,636 | | | $23,933,761 | | | Mr. Bilunas | | | 3,048,832 | | | 3,048,832 | | | 4,506,330 | | | Mr. Bonfig | | | 1,015,595 | | | 1,015,595 | | | 1,383,461 | | | Mr. Harmon | | | 752,003 | | | 752,003 | | | 1,055,049 | | | Ms. Scarlett | | | 2,452,859 | | | 2,452,859 | | | 3,476,130 | |
(1)
| Reflects value realizable upon a pro-rata basis (number of days employed through termination / total number of days in performance period) based onchange-of-control event, but assumes that the level of performance achieved as ofNEO will stay with the termination date | | -Involuntary termination without Cause | | | -Voluntary termination for Good Reason | | | -Change-of-control | | -Deemed earned based on the level of performance achieved or at target, whichever is greater, as of the date of the change-of-control. Issuance of earned shares is subject to the NEO's continued employmentCompany through the end of the performance period | | -Termination following a change-of-control due to: death, disability, involuntary termination without Cause or voluntary termination for Good Reason | | -A pro-rata portion (determined by number of days employed through termination / total number of days ineach outstanding performance period) of those shares deemed earned as of the date of the change-of-control are issued to the NEOshare award. |
Restrictive Covenants. As further described in theCompensation Discussion and Analysis – Executive Compensation Elements – Other Compensation – Clawback and Restrictive Covenant Provisions,section, our executive officer long-term incentiveseparation agreements and LTI award agreements generally include confidentiality, non-compete, non-solicitation and in select situations, non-disparagementnon-solicitation provisions as generally described below:
Confidentiality. Award recipients agree to maintain the confidentiality of Best Buy’s “confidential information” and to use such information for the exclusive benefit of Best Buy. This obligation has the appropriate application to the post-termination period.
Non-Compete. Award recipients agree not to engage in “competitive activity” for a period of one year following the earlierlater of termination of employment for any reason, or the last scheduled award vesting date.
Non-Solicitation. Award recipients agree not to solicit Company employees for employment or parties with which we do business from engaging such business for a period of one year following the earlierlater of termination of employment for any reason, or the last scheduled award vesting date. Non-Disparagement. A non-disparagement provision is includedin specific circumstances.
Upon violation of a restrictive covenant, unexercised options and unvested shares related to the respective award agreement under which they were issued are canceledmay be cancelled and forfeited, and likewise, the Company may require that the related issued shares (or their fair market value, as measured on the option exercise date or share vesting date) must be returned to the Company. Additionally, the Company may seek injunctive or other appropriate equitable relief.
Quantitative Disclosure. The tables below provide for each NEO, as of the end of fiscal 2016, the potential severance amount and the value of their unvested stock options (if in-the-money) and restricted share awards (as detailed in the Outstanding Equity Awards at Fiscal Year-End section) under the various scenarios discussed above, excluding retirement (as none of our NEOs meet the age and service requirements for qualified retirement under our agreements) and voluntary termination without Good Reason and involuntary termination for Cause (as none of our NEOs qualify for any payments under these scenarios).
Equity award values used in the following tables were calculated using the closing price of our common stock as quoted on the NYSE on January 29, 2016, the last business day in fiscal 2016.
Voluntary Termination for Good Reason | | | | | | | | | | | | | | Name | | Cash Payments | | Performance Share Awards(1) | | Total | Mr. Joly | | $ | 2,406,970 |
| (2) | $ | 7,346,959 |
| | $ | 9,753,929 |
| Ms. McCollam | | 4,625,000 |
| (3) | 2,267,081 |
| | 6,892,081 |
| Ms. Ballard | | — |
| | 671,718 |
| | 671,718 |
| Mr. Mohan | | — |
| | 559,759 |
| | 559,759 |
| Mr. Nelsen | | — |
| | 727,697 |
| | 727,697 |
|
| | (1) | Performance share awards granted in fiscal 2014 vest on a pro-rata basis to the extent that the performance goals have been attained through the termination date if the NEO terminates their employment voluntarily for Good Reason. If the Compensation Committee deems that performance goals have been achieved and has determined the number of shares earned, the actual number of shares that would vest is calculated based on the number of days the NEO was employed through termination over the total number of days in the performance period. The values in this column were calculated using an estimated vesting percentage of 144% which is based on performance trends for the fiscal 2014 performance share awards as of the end of fiscal 2016. |
| | (2) | The amount reflects a severance payment pursuant to Mr. Joly's employment agreement, equal to 24 months of base salary and 150% of the cost of 24 months of COBRA health coverage and group life insurance based on the cost of coverage in place at the time of termination. |
| | (3) | The amount reflects a severance payment pursuant to Ms. McCollam's employment agreement, equal to 24 months of base salary plus two times her target STI bonus payment (150% of base salary). |
Involuntary Termination without Cause | | | | | | | | | | | | | | Name | | Cash Payments | | Performance Share Awards(1) | | Total | Mr. Joly | | $ | 2,406,970 |
| (2) | $ | 9,167,038 |
| | $ | 11,574,008 |
| Ms. McCollam | | 4,625,000 |
| (3) | 2,828,700 |
| | 7,453,700 |
| Ms. Ballard | | — |
| (4) | 838,121 |
| | 838,121 |
| Mr. Mohan | | — |
| (4) | 802,437 |
| | 802,437 |
| Mr. Nelsen | | — |
| (4) | 907,965 |
| | 907,965 |
|
| | (1) | All outstanding performance share awards vest on a pro-rata basis to the extent that the performance goals have been attained through either the termination date or the end of the performance period (depending on the award) if the NEO is terminated involuntarily without Cause. If the Compensation Committee deems that performance goals have been achieved and has determined the number of shares earned, the actual number of shares that would vest is calculated based on the number of days the NEO was employed through termination over the total number of days in the performance period. |
The values in this column were calculated using an estimated vesting percentage based on performance trends for each outstanding performance share award as of the end of fiscal 2016, as follows: | | | | | | | | | | | | | | Fiscal Year of
Performance Share Award
| | Performance Period | | Estimated vesting percentage
| | | 73 | | | as of January 30, 2016
| Fiscal 2016 | | March 1, 2015 - February 28, 2018 | | — | % | Fiscal 2015 | | August 1, 2014 - July 31, 2017 | | 87 | % | Fiscal 2014 | | April 1, 2013 - March 31, 2016 | | 144 | %2022 Proxy Statement |
| | (2) | The amount reflects a severance payment pursuant to Mr. Joly's employment agreement and includes 24 months of base salary and 150% of the cost of 24 months of COBRA health coverage and group life insurance based on the cost of coverage in place at the time of termination. |
| | (3) | The amount reflects a severance payment pursuant to Ms. McCollam's employment agreement, equal to 24 months of base salary plus two times her target STI bonus payment (150% of base salary). |
| | (4) | Pursuant to our Severance Plan, these NEOs are eligible for cash severance, as detailed above under the heading Cash payments, if they are involuntarily terminated as a result of job elimination, reduction in force or business restructuring (or other circumstances at our discretion). Since the applicability of the Severance Plan is more narrow than is implied by the table name "Involuntary Termination without Cause", the severance payments the NEOs are eligible for under those limited circumstances (Ms. Ballard: $1,628,619; Mr. Mohan: $1,644,852; and Mr. Nelsen: $1,353,802) are not included in the table.
|
| | | | | | | | | | | | | | | | | | | | | | Name | | Cash Payments | | Stock Options(2) | | Time-Based Restricted Shares | | Performance-Share Awards(3) | | Total | Mr. Joly | | $ | 10,921,020 |
| (4) | $ | 356,344 |
| | $ | — |
| | $ | 15,255,321 |
| | $ | 26,532,685 |
| Ms. McCollam | | 6,911,967 |
| (4) | 274,894 |
| | — |
| | 4,690,052 |
| | 11,876,913 |
| Ms. Ballard | | — |
| | 95,513 |
| | 11,647 |
| (5) | 1,974,116 |
| | 2,081,276 |
| Mr. Mohan | | — |
|
| 416,167 |
| | — |
| | 1,589,435 |
| | 2,005,602 |
| Mr. Nelsen | | — |
|
| 97,030 |
| | 6,033 |
| (5) | 1,547,193 |
| | 1,650,256 |
|
| | (1) | This table reflects the specific instances where our employment and award agreements have provisions related to change-of-control, some of which apply upon the change-of-control itself and some of which apply upon termination following the change-of-control. As such, the totals reflected are not necessarily indicative of the actual value that each NEO would realize upon a change-of-control or upon termination following a change-of-control. Additionally, if an NEO is terminated following a change-of-control, the NEO would potentially realize additional value not reflected here depending on the nature of the termination, as detailed in the other tables within this section. |
| | (2) | All unvested stock options granted to our NEOs fully vest upon involuntary termination without Cause or voluntary termination for Good Reason within 12 months following a change-of-control. |
| | (3) | All outstanding performance share awards are deemed earned upon a change-of-control based on the level of actual performance achieved as of the date of the change-of-control or at target, whichever is greater. Issuance of the earned shares is subject to the NEO's continued employment through the end of the performance period for each award. If the NEO's employment were to be terminated following the change-of-control, but prior to the end of the performance period, a pro-rata portion of the shares deemed earned would potentially be issued to the NEO depending on the type of termination (as described earlier in this section under the heading Performance share awards).
|
The values in this column were calculated using the greater of the actual estimated vesting percentage based on performance trends for each outstanding performance share award as of the end of fiscal 2016 or target (100%), as follows:
| | | | | | Fiscal Year of
Performance Share Award
| | Performance Period | | Estimated vesting percentage
as of January 30, 2016 or
Target (100%)
| Fiscal 2016 | | March 1, 2015 - February 28, 2018 | | 100% | Fiscal 2015 | | August 1, 2014 - July 31, 2017 | | 100% | Fiscal 2014 | | April 1, 2013 - March 31, 2016 | | 144% |
| | (4) | The amounts reflect cash severance payments pursuant to Mr. Joly and Ms. McCollam's employment agreements. In the event Mr. Joly or Ms. McCollam voluntarily terminate their employment for Good Reason or are involuntarily terminated without Cause in anticipation of or within 12 months following a change-of-control, they are entitled to an enhanced severance offering of: (i) two times the sum of base salary plus target annual bonus; (ii) a pro-rata annual bonus for the fiscal year in which such termination occurs based on actual performance (for fiscal 2016 payouts, see Compensation Discussion and Analysis – Executive Compensation Elements – Short-Term Incentive) and (iii) 150% of the cost of 24 months of COBRA health coverage and group life insurance based on the cost of coverage in place at the time of termination.
|
| | (5) | The amounts represent the unvested portions of the time-based restricted shares granted under our fiscal 2012 LTI program which become non-forfeitable upon involuntary termination without Cause or voluntary termination for Good Reason within 12 months following a change-of-control. |
Death or Disability
| | | | | | | | | | | | | | | | | | Name | | Stock Options(1) | | Time-Based Restricted Shares | | Performance Share Awards(2) | | Total | Mr. Joly | | $ | 356,344 |
| | $ | 3,874,729 |
| (3) | $ | 9,167,038 |
| | $ | 13,398,111 |
| Ms. McCollam | | 274,894 |
| | 1,973,925 |
| (3) | 2,828,700 |
| | 5,077,519 |
| Ms. Ballard | | 95,513 |
| | 1,231,378 |
| (4) | 838,121 |
| | 2,165,012 |
| Mr. Mohan | | 416,167 |
| | 1,155,073 |
| (3) | 802,437 |
| | 2,373,677 |
| Mr. Nelsen | | 97,030 |
| | 685,011 |
| (4) | 907,965 |
| | 1,690,006 |
|
| | (1) | All outstanding unvested stock options fully vest upon death or disability. |
| | (2) | All outstanding performance share awards vest on a pro-rata basis to the extent that the performance goals have been attained through the date of the NEO's death or termination due to disability. If the Compensation Committee deems that performance goals have been achieved and has determined the number of shares earned, the actual number of shares that would vest is calculated based on the number of days the NEO was employed through termination over the total number of days in the performance period. |
The values in this column were calculated using an estimated vesting percentage based on performance trends for each outstanding performance share award as of the end of fiscal 2016, as follows: | | | | | | | Fiscal Year of
Performance Share Award
| | Performance Period | | Estimated vesting percentage
as of January 30, 2016
| Fiscal 2016 | | March 1, 2015 - February 28, 2018 | | — | % | Fiscal 2015 | | August 1, 2014 - July 31, 2017 | | 87 | % | Fiscal 2014 | | April 1, 2013 - March 31, 2016 | | 144 | % |
| | (3) | The amounts represent unvested time-based restricted shares granted under our fiscal 2016 and fiscal 2015 LTI programs, which fully vest upon death or disability. |
| | (4) | The amounts represent the unvested time-based restricted shares granted under our fiscal 2016 and fiscal 2015 LTI programs, which fully vest upon death or disability and unvested time-based restricted shares granted under our fiscal 2012 LTI program, which would become non-forfeitable upon death or disability. |
TABLE OF CONTENTS
Overview
Each year, the Compensation Committee reviews the total compensation paid to non-management directors. The purpose of the review is to ensure that the level of compensation is appropriate to attract and retain a diverse group of directors with the breadth of experience necessary to perform the Board'sBoard’s duties, and to fairly compensate directors for their service. As part of their analysis, the Compensation Committee considers the total value of the compensation as compared with director compensation at other Fortune 100 companies and our peer group of companies, which is described in Compensation
Discussion and Analysis — Factors in Decision-Making. In March 2015,2021, the Compensation Committee and Board reviewed and approved the fiscal 20162022 compensation for non-management directors, including the value and terms of the equity compensation component, as detaileddescribed in more detail below.
Cash Compensation
The fiscal 20162022 cash compensation for our non-management directors consisted of the following annual retainers: | | | | | | Annual Amount |
| Annual retainer | $ | 80,000 |
| Lead independent director stipend* | 25,000 |
| Annual committee chair retainer - Audit | 25,000 |
| Annual committee chair retainer - Compensation & Human Resources | 20,000 |
| Annual committee chair retainer - Nominating | 15,000 |
| Annual committee chair retainer - Finance and Investment Policy | 10,000 |
|
*Approved at the June 2015 Compensation Committee meeting.
| Annual retainer | | | $100,000 | | | Non-executive chair retainer | | | 65,000(1) | | | Annual committee chair retainer - Audit | | | 25,000 | | | Annual committee chair retainer - Compensation & Human Resources | | | 20,000 | | | Annual committee chair retainer - Nominating, Corporate Governance and Public Policy | | | 20,000 | | | Annual committee chair retainer - Finance and Investment Policy | | | 20,000(2) | |
(1)
| The Compensation Committee and Board approved an additional $200,000 in compensation for the non-executive chair, one-third of which is in the form of a cash stipend (as reflected here) and two-thirds of which is in the form of equity (as discussed below). |
(2)
| Increased from $15,000. |
All annual retainers are paid in quarterly installments and annual retainers for non-management directors who serve on the Board or as chair of a committee for only a portion of a fiscal year are prorated. All annual retainers are paid in quarterly installments.
Equity Compensation
On June 8, 2015,15, 2021, the Compensation Committee approved an annual equity award with a value of $185,000 for alleach of the then-serving non-management directors in the form of restricted stock units. The awards each had a value of $195,000, which translated into 5,3981,775 restricted stock units. The Compensation Committee also approved an additional equity award for the non-executive chairman having a value of $135,000, which translated into 1,228 restricted stock units. The restricted stock units are entitled to dividend equivalents, which are subject to the same restrictions and vesting criteria as the underlying units. All restricted stock units granted to our directors fully vest one year from the grant date of grant and must be held until the director leaves the Board. Director equity awards are prorated through a director’s termination date if a director leaves the Board before the restricted stock units have vested, unless the director is terminated for Cause, in which case all unvested restricted stock units are forfeited.
The Compensation Committee also considers prorated annual equity awards for new directors who are appointed to the Board between each annual grant in June.grant. As such, the Compensation Committee approved prorated equity awards for new directors, Karen L. McLoughlin (3,606Mr. Marte (906 restricted stock units) and Claudia F. Munce (1,383Mr. Rendle (430 restricted stock units) in September 2015 and March 2016, respectively. Since Ms. McLoughlin was appointed to the Board during fiscal 2016, additional detail regarding her fiscal 2016 compensation can be found below in the Director Compensation Table.2021. | | | | | | | | | | | | | | | | 2022 Proxy Statement | | | 74 | | | | | | |
Preview of Fiscal 2017 Director Compensation
On March 16, 2016, the Compensation Committee reviewed the cash and equity compensation of our non-management directors for fiscal 2017 and approved the following compensation adjustments in order to align our directors' pay with current market practice.
| | | | | | | | Fiscal 2016 Amount |
| | Change for Fiscal 2017 | Annual retainer | $ | 80,000 |
| | Increase by $5,000 | Lead independent director stipend | 25,000 |
| | No change | Annual committee chair retainer - Audit | 25,000 |
| | No change | Annual committee chair retainer - Compensation & Human Resources | 20,000 |
| | No change | Annual committee chair retainer - Nominating | 15,000 |
| | No change | Annual committee chair retainer - Finance and Investment Policy | 10,000 |
| | No change | Annual equity award | 185,000 |
| | Increase by $5,000 |
TABLE OF CONTENTS
Director Compensation Table
The following table summarizes the compensation earned during fiscal 20162022 by our non-management directors: | | | | | | | | | | | | | | | | | | | | | | Name(1) | | Fees Earned or Paid In Cash |
| | Stock Awards(2) |
| | Option Awards(3) |
| | All Other Compensation(4) |
| | Total |
| Bradbury H. Anderson* | | $ | 80,000 |
| | $ | 180,293 |
| | $ | — |
| | $ | — |
| | $ | 260,293 |
| Lisa M. Caputo | | 80,000 |
| | 180,293 |
| | — |
| | — |
| | 260,293 |
| J. Patrick Doyle | | 80,000 |
| | 180,293 |
| | — |
| | — |
| | 260,293 |
| Russell P. Fradin(5) | | 116,209 |
| | 180,293 |
| | — |
| | — |
| | 296,502 |
| Kathy J. Higgins Victor(6) | | 95,000 |
| | 180,293 |
| | — |
| | — |
| | 275,293 |
| David W. Kenny(7) | | 96,209 |
| | 180,293 |
| | — |
| | — |
| | 276,502 |
| Sanjay Khosla(8) | | 28,352 |
| | — |
| | — |
| | 8,541 |
| | 36,893 |
| Allen U. Lenzmeier(9) | | 28,352 |
| | — |
| | — |
| | 8,541 |
| | 36,893 |
| Karen L. McLoughlin(10) | | 30,549 |
| | 128,770 |
| | | | | | 159,319 |
| Thomas L. Millner | | 80,000 |
| | 180,293 |
| | — |
| | — |
| | 260,293 |
| Hatim A. Tyabji(11) | | 65,563 |
| | — |
| | — |
| | 17,083 |
| | 82,646 |
| Gérard R. Vittecoq(12) | | 90,000 |
| | 180,293 |
| | — |
| | — |
| | 270,293 |
|
*Indicates a director who is not standing for re-election at the Meeting.
| Lisa M. Caputo(4) | | | $120,000 | | | $195,073 | | | $— | | | $315,073 | | | J. Patrick Doyle(5) | | | 165,000 | | | 330,030 | | | — | | | 495,030 | | | David W. Kenny(6) | | | 120,000 | | | 195,073 | | | — | | | 315,073 | | | Mario J. Marte | | | 100,000 | | | 302,153 | | | — | | | 402,153 | | | Karen L. McLoughlin(7) | | | 120,000 | | | 195,073 | | | — | | | 315,073 | | | Thomas L. Millner(8) | | | 125,000 | | | 195,073 | | | — | | | 320,073 | | | Claudia F. Munce | | | 100,000 | | | 195,073 | | | — | | | 295,073 | | | Richelle P. Parham | | | 100,000 | | | 195,073 | | | — | | | 295,073 | | | Steven E. Rendle(9) | | | 87,363 | | | 245,894 | | | — | | | 333,257 | | | Eugene A. Woods | | | 100,000 | | | 195,073 | | | — | | | 295,073 | |
(1)
| | (1) | Mr. Joly,Ms. Barry, our only management director during fiscal 2016,2022, did not receive any compensation for his serviceserving as a director. |
| | (2)
| The amounts in this column reflect the aggregate grant date fair value for restricted stock units granted to our non-management directors during fiscal 2016,2022, measured in accordance with ASC Topic 718.718, including annual awards and the prorated new director awards that are described above the table. As of January 30, 2016,29, 2022, our non-management directors held outstanding stock units including both unvested restricted stock units and restricted stock units that have vested, but that are subject to a holding requirement until the director leaves the board ("(“deferred units"units”) as follows: Mr. AndersonMs. Caputo — 5,3981,799 unvested units and 12,368 deferred units; Ms. Caputo — 5,398 unvested units and 12,63836,461 deferred units; Mr. Doyle — 5,3983,044 unvested units and 2,990 deferred units; Mr. Fradin — 5,398 unvested units and 12,368 deferred units; Ms. Higgins Victor — 5,398 unvested units and 12,36828,905 deferred units; Mr. Kenny — 5,3981,799 unvested units and 8,34532,438 deferred units; Ms. McLoughlin — 3,606Mr. Marte – 2,725 unvested units and 0 deferred units; Ms. McLoughlin — 1,799 unvested units and 22,301 deferred units; Mr. Millner — 5,3981,799 unvested units and 6,83230,925 deferred units; Mr. VittecoqMs. Munce — 5,3981,799 unvested units and 12,36820,078 deferred units; Ms. Parham — 1,799 unvested units and 8,767 deferred units; and Mr. Woods — 1,799 unvested units and 7,747 deferred units. |
| | (3)
| We did not grant stock option awards to our non-management directors in fiscal 2016.2021. As of January 30, 2016,29, 2022, none of our non-management directors held outstanding stock options as follows: Mr. Anderson — 0 stock options; Ms. Caputo — 12,500 stock options; Mr. Doyle — 0 stock options; Mr. Fradin — 0 stock options; Ms. Higgins Victor — 40,000 stock options; Mr. Kenny — 0 stock options; Ms. McLoughlin — 0 stock options; Mr. Millner — 0 stock options; Mr. Vittecoq — 21,250 stock options. |
| | (4) | Pursuant to the terms of the restricted stock units granted to our non-management directors on June 19, 2013, directors are entitled to an accrual of dividend equivalents from the vesting date (June 19, 2014) through the date the restricted stock units are issued to the director as shares (upon departure from the Board). Dividend equivalent accruals are to be settled in cash at the time the shares are delivered to the departing director. The amounts in this column reflect the dividend equivalent payments received by directors who retired during fiscal 2016. |
| | (5) | Mr. Fradin became Lead Independent Director on June 9, 2015. Mr. Fradin is also chair of the Compensation Committee. |
| | (6)
| Ms. Higgins VictorCaputo is chair of the Nominating Committee. |
(5)
| Mr. Doyle serves as our Lead Independent Director. |
(7)(6)
| Mr. Kenny becameis chair of the Audit Committee on June 9, 2015.Compensation Committee. |
| | (8) | Mr. Khosla retired from the Board on June 9, 2015. |
(7)
| | (9) | Mr. Lenzmeier retired from the Board on June 9, 2015. |
| | (10) | Ms. McLoughlin joined the Board on September 14, 2015. |
| | (11) | Mr. Tyabji retired from the Board on June 9, 2015. Prior to retiring, Mr. Tyabji served as Chairman of the Board and chair of the Audit Committee. |
| | (12) | Mr. Vittecoq is chair of the Finance and Investment Policy Committee. |
(8)
| Mr. Millner is chair of the Audit Committee. |
(9)
| Mr. Rendle was appointed to the Board effective March 18, 2021. |
Director Stock Ownership Guidelines
The Compensation Committee has established stock ownership guidelines requiring our non-management directors to own, indirectly or directly, 10,000 shares. We expectHistorically, we have expected that, until the ownership target is met, directors will retain: (i)would retain 50% of the net proceeds received from the exercise of a stock option in the form of Best Buy common stock; and (ii) 50% of sharestheir granted equity (net of taxes) issued in connection with the lapse of restrictions on restricted share awards. The ownership target does not need to be met within a certain timeframe and our directors are considered in compliance with the guidelines as long as progress towards the ownership target is being made, consistent with the expectations noted above.. In further support of director stock
ownership, equity grants awarded to directors sincewe began in fiscal 2014 havegranting director equity subject to a holding requirement throughfor the conclusionduration of each director'sa director’s service on ourthe Board. In fiscal 2016,2022, all of our non-management directors were in compliance with the ownership guidelines, either by meeting the ownership target or by making progress towards the ownership target.
Our stock ownership guidelines for executive officers are discussed in the Compensation Discussion and Analysis — Executive Compensation Elements — Other Compensation section.
Deferred Compensation Plan
Each calendar year, we offer our directors the opportunity to defer up to 100% of their annual and committee chair retainers under the Deferred Compensation Plan which is described in the section Compensation of Executive Officers — Nonqualified Deferred Compensation. No Company contributions or matching contributions are made for the benefit of directors under the Deferred Compensation Plan.
Other Benefits
We reimburse all directors for travel and other necessary business expenses incurred in performance of their services for us. In addition, all directors are covered under a directors'directors’ and officers'officers’ indemnity insurance policy. | | | | | | | | | | | | | | | | | | | 75 | | | | | | 2022 Proxy Statement |
TABLE OF CONTENTS Equity Compensation Plan Information The following table provides information about shares of our common stock that may be issued under our equity compensation plans as of January 29, 2022: | Equity compensation plans approved by security holders | | | 3,554,273 | | | $57.83 | | | 25,928,855 | | | Equity compensation plans not approved by security holders | | | — | | | — | | | — | | | Total | | | 3,554,273 | | | 57.83 | | | 25,928,855 | |
(1)
| Includes grants of stock options and restricted stock units (which may be market-based, performance-based or time-based) awarded under our Best Buy Co., Inc. 2020 Omnibus Incentive Plan. |
(2)
| Includes weighted-average exercise price of outstanding stock options only. |
(3)
| Excludes securities to be issued upon exercise of outstanding options and rights. Includes 3,624,848 shares of our common stock which have been reserved for issuance under our 2008 and 2003 Employee Stock Purchase Plans. |
CEO Pay Ratio
ITEM OF BUSINESS NO. 3 — ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 14A of the Securities Exchange Act of 1934, as amended,Pursuant to SEC rules, we are providing our shareholders with an opportunity to cast an advisory vote, a "Say on Pay," regarding the fiscal 2016following information about the ratio of the annual total compensation of our NEOs,median employee to the annual total compensation of Ms. Barry, our CEO. Due to the flexibility afforded by the rules of the SEC in calculating the pay ratio amount, the ratio we calculated may not be comparable to the CEO pay ratio presented by other companies.
In fiscal 2022, our last completed fiscal year, Ms. Barry’s annual total compensation was $15,631,157 as describedreflected in the Compensation of Executive and DirectorOfficers — Summary Compensation Table section of this proxy statement. Our median employee’s annual total compensation for fiscal 2022 was $29,999. As a result, we estimate that Ms. Barry’s annual total compensation was approximately 521 times that of our median employee.
In June 2011,determining the median employee: We prepared a list of all Best Buy employees as of January 29, 2022. As of January 29, 2022, we had approximately 105,320 employees, including 94,790 U.S. employees, and 10,530 non-U.S. employees. In identifying our median employee, we included our approximately 10,370 Canadian employees, but, in considerationaccordance with SEC rules, we excluded our employees in China and Mexico, where we had about 150 employees and 10 employees, respectively, representing approximately 0.15% in the aggregate of our worldwide workforce. After excluding employees in these countries, as of January 29, 2022, we had 105,160 employees. As permitted under SEC rules, we excluded employees from the resultscompanies we acquired during fiscal 2022, which included Current Health Limited and Two Peaks, LLC. As of January 29, 2022, there were approximately 210 employees working for the fiscal 2011 advisory vote onacquired companies. As permitted under SEC rules, we used compensation that would equate to W-2 wages for the frequencyprior twelve months as our consistently applied compensation measure, which we believe provides a reasonable estimate of "Say on Pay" votes,annual compensation for our employees. We annualized W-2 wages for employees, other than occasional/seasonal employees, who were not employed for the Board determined to hold such votes on an annual basis untilfull twelve months. The median amount was then identified from the next vote on the frequency of "Say on Pay" votes. Accordingly, the next "Say on Pay" vote will be held at the Company's 2016 Meeting.annualized list. | | | | | | | | | | | | | | | | 2022 Proxy Statement | | | 76 | | | | | | |
TABLE OF CONTENTS Information about the Advisory Vote to Approve Named Executive Officer Compensation
The Compensation Committee establishes, recommends and governs all of the compensation and benefits policies and actions for the Company's NEOs, as defined in the Introduction to the Executive and Director Compensation — Compensation Discussion and Analysis section of this proxy statement. While the advisory vote to approve NEO compensation is not binding on us, it will provide useful information to our Board and the Compensation Committee regarding our shareholders' views of our executive compensation philosophy, policies and practices. The Compensation Committee values our shareholders' opinions and will take the results of the vote into consideration when determining the future compensation arrangements for our NEOs. To the extent there are significant negative "Say on Pay" advisory votes, we plan to consult directly with shareholders to better understand the concerns that influenced the vote and consider constructive feedback in making future decisions about our executive compensation program.
As detailed in our CD&A, we believe our fiscal 2016 executive compensation program reflects market appropriate practices and balances risk and reward in relation to our overall business strategy and ongoing business transformation. Our executive compensation program is focused on pay-for-performance and seeks to mitigate risks related to compensation in order to further align management's interests with shareholders' interests in long-term value creation.
Accordingly, we ask that our shareholders cast an advisory vote to approve the following resolution:
RESOLVED, that the shareholders of the Company approve, on an advisory basis, the compensation of the named executive officers for the fiscal year ended January 30, 2016, as described in the Executive and Director Compensation — Compensation Discussion and Analysis section and the compensation tables and related material disclosed in the Company's proxy statement for its 2016 Regular Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission.
Board Voting Recommendation
Our Board recommends an advisory vote FOR approval of the fiscal 2016 compensation of our NEOs as disclosed in this proxy statement pursuant to the SEC's compensation disclosure rules.
The affirmative vote of at least a majority of the voting power of the shares present, in person or by proxy, and entitled to vote (excluding broker non-votes) is required for advisory approval of our NEO compensation.
IT IS INTENDED THAT, UNLESS OTHERWISE INSTRUCTED, THE SHARES REPRESENTED BY PROXY (OTHER THAN BROKER NON-VOTES) WILL BE VOTED "FOR" THE ADVISORY VOTE ON EXECUTIVE COMPENSATION.
OTHER BUSINESS
Management and the Board are not aware of any other item of business that will be addressed at the Meeting. 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.
PROPOSALS FOR THE NEXT REGULAR MEETING OF SHAREHOLDERS
Any shareholder proposal intended to be presented for consideration at our 20172023 Regular Meeting of Shareholders and to be included in our proxy statement for that meeting must be received by our Secretary no later than January 3, 2017,December 28, 2022, at our principal executive office, addressed as follows:
Mr. Keith J. NelsenTodd G. Hartman
General Counsel, Chief Risk Officer and Secretary
Best Buy Co., Inc.
7601 Penn Avenue South
Richfield, Minnesota 55423
In accordanceOur By-laws establish advance notice procedures with our By-laws,respect to shareholder proposals and the nomination of candidates for election as directors and the proposal of any shareholder proposal, including any director nominations, received andbusiness not intended to be presented for consideration at our 2017 Regular Meeting of Shareholders, though not included in ourthe Company’s 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 thatany 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 byat our Secretary at the address set forth above noprincipal executive offices not less than 120 days nor more than 150 days and no less than 120 days beforeprior to the anniversary of the prior year's regularimmediately preceding annual meeting of shareholders. Accordingly, such proposals will be considered untimely if received before January 15, 2017,10, 2023, or after February 14, 2017.9, 2023. Any such shareholder proposal must also comply with the procedural requirements of our By-laws. The advance notice requirement in our By-laws supersedes the notice period in Rule 14a-4(c)(1) of the Securities Exchange Act of 1934 regarding discretionary proxy voting authority with respect to shareholder business. In addition to satisfying the foregoing requirements under our By-laws, to comply with the universal proxy rules (once effective), shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 10, 2023.
By Order of the Board of Directors Todd G. Hartman
Secretary April 27, 2022 | | | | | | | | | By Order of the Board of Directors | | | | | | | | | | | | | | | Keith J. Nelsen | May 3, 2016 | | Secretary | | 77 | | | | | | 2022 Proxy Statement |
TABLE OF CONTENTS Reconciliations of Non-GAAP Financial Measures
Forward-LookingReconciliations of operating income and Cautionary Statementsdiluted earnings per share (“EPS”) (GAAP financial measures) to non-GAAP operating income and non-GAAP diluted EPS (non-GAAP financial measures) were as follows ($ in millions, except per share amounts):
| Operating income | | | $3,039 | | | $2,391 | | | % of revenue | | | 5.9% | | | 5.1% | | | Restructuring - inventory markdowns(1) | | | (6) | | | 23 | | | Price-fixing settlement(2) | | | — | | | (21) | | | Restructuring charges(3) | | | (34) | | | 254 | | | Intangible asset amortization(4) | | | 82 | | | 80 | | | Acquisition-related transaction costs(4) | | | 11 | | | — | | | Non-GAAP operating income | | | $3,092 | | | $2,727 | | | % of revenue | | | 6.0% | | | 5.8% | | | | | | | | | | | | Diluted EPS | | | $9.84 | | | $6.84 | | | Restructuring - inventory markdowns(1) | | | (0.02) | | | 0.09 | | | Price-fixing settlement(2) | | | — | | | (0.08) | | | Restructuring charges(3) | | | (0.14) | | | 0.97 | | | Intangible asset amortization(4) | | | 0.33 | | | 0.30 | | | Acquisition-related transaction costs(4) | | | 0.04 | | | — | | | Gain on investments, net(5) | | | — | | | (0.05) | | | Income tax impact of non-GAAP adjustments(6) | | | (0.04) | | | (0.16) | | | Non-GAAP diluted EPS | | | $10.01 | | | $7.91 | |
This proxy material contains forward-looking statements withinFor additional information regarding the meaningnature of charges discussed below, refer to Note 2, Acquisitions; Note 3, Restructuring; Note 4, Goodwill and Intangible Assets; and Note 11, Income Taxes, of the Private Securities Litigation Reform ActNotes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data, of 1995 as contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that reflect management’s current views and estimates regarding future market conditions, company performance and financial results, business prospects, new strategies, the competitive environment and other events. You can identify these statements by the fact that they use words such as “anticipate,” “believe," "assume,” “estimate,” “expect,” “intend,” “project,” “guidance,” “plan,” “outlook,” and other words and terms of similar meaning. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from the potential results discussed in the forward-looking statements. Among the factors that could cause actual results and outcomes to differ materially from those contained in such forward-looking statements are the following: macro-economic conditions (including fluctuations in housing prices, oil markets and jobless rates), conditions in the industries and categories in which we operate, changes in consumer preferences, changes in consumer confidence, consumer spending and debt levels, online sales levels and trends, average ticket size, the mix of products and services offered for sale in our physical stores and online, credit market changes and constraints, product availability, competitive initiatives of competitors (including pricing actions and promotional activities of competitors), strategic and business decisions of our vendors (including actions that could impact promotional support, product margin and/or supply), the success of new product launches, the impact of pricing investments and promotional activity, weather, natural or man-made disasters, attacks on our data systems, the company’s ability to prevent or react to a disaster recovery situation, changes in law or regulations, changes in tax rates, changes in taxable income in each jurisdiction, tax audit developments and resolution of other discrete tax matters, foreign currency fluctuation, availability of suitable real estate locations, the company’s ability to manage its property portfolio, the impact of labor markets, the company’s ability to retain qualified employees, failure to achieve anticipated expense and cost reductions from operational and restructuring changes, disruptions in our supply chain, the costs of procuring goods the company sells, failure to achieve anticipated revenue and profitability increases from operational and restructuring changes (including investments in our multi-channel capabilities and brand consolidations), inability to secure or maintain favorable vendor terms, failure to accurately predict the duration over which we will incur costs, acquisitions and development of new businesses, divestitures of existing businesses, failure to complete or achieve anticipated benefits of announced transactions, integration challenges relating to new ventures, and our ability to protect information relating to our employees and customers. A further list and description of these risks, uncertainties and other matters can be found in the company’s Annual Report and other reports filed from time to time with the Securities and Exchange Commission (“SEC”), including, but not limited to, Best Buy’s Annual Report on Form 10-K filed with the SEC on March 23, 2016. Best Buy cautions that the foregoing list of important factors is not complete, and any forward-looking statements speak only as of the date they are made, and Best Buy assumes no obligation to update any forward-looking statement that it may make.for fiscal 2022.
(1)
| Represents inventory markdowns recorded within cost of sales associated with the decision to exit operations in Mexico. |
(2)
| Represents a price-fixing litigation settlement received in relation to products purchased and sold in prior fiscal years. |
(3)
| Represents charges in fiscal 2021 and subsequent adjustments in fiscal 2022 related to actions taken in the Domestic segment to better align the company’s organizational structure with its strategic focus and the decision to exit operations in Mexico in the International segment. |
(4)
| Represents charges associated with acquisitions, including: (1) the non-cash amortization of definite-lived intangible assets, including customer relationships, tradenames and developed technology; and (2) acquisition-related transaction and due diligence costs, primarily comprised of professional fees. |
(5)
| Represents an increase in the fair value of a minority investment. |
(6)
| The non-GAAP adjustments primarily relate to the U.S. and Mexico. As such, the income tax charge is generally calculated using the statutory tax rate of 24.5% for U.S. non-GAAP items for all periods presented. There is no income tax charge for Mexico non-GAAP items and a minimal amount of U.S. non-GAAP items, as there was no tax benefit recognized on these expenses in the calculation of GAAP income tax expense. |
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