Former Best Buy CEO Hubert Joly on Tuesday told the electronics retailer that he will not stand for re-election to the company's board at its June shareholders meeting this year. At that time he will step down as executive chairman, according to a filing with the Securities and Exchange Commission.
Carlyle Group executive partner J. Patrick Doyle, lead independent director and a board member since 2014, will become chairman, effective upon Joly's retirement at the conclusion of the meeting, per the filing.
However, Joly will stay on as a part-time consultant for a year, possibly renewed in one-year increments, for which he'll be paid $37,500 per quarter, according to an agreement included with the filing.
Joly is widely credited with inoculating Best Buy against both Amazon and the "retail apocalypse," differentiating the electronics retailer with highly trained store associates and high-touch services in customers' homes, and trimming its store fleet with an eye on cost cutting.
Indeed, while Best Buy had seemed poised to stumble, he instead led a turnaround that was so thoroughly based on a service orientation that the company eventually bought health and safety solutions company GreatCall for $800 million. At first glance, it seems like a curious move for a half century-old brick-and-mortar specialist, even one that has kept up with the times. But several analysts even at the time two years ago viewed it as a natural next step in an era when retail is no longer simply defined by the sale of goods, and the acquisition has consistently paid off for the retailer in the quarters since.
Under Joly's leadership, Best Buy was also able to turn the tables on Amazon, forging a strategic partnership to sell the e-commerce giant's Fire televisions in a deal that, according to several observers, Amazon needed much more than Best Buy.
Last year, the retailer's leadership transition seemed smooth as silk as Chief Financial and Strategic Transformation Officer Corie Barry took over from Joly as CEO. That was threatened earlier this year by revelations of misconduct on Barry's part. After an investigation with which she apparently fully cooperated, that was resolved before it became a crisis, and Barry remains.
With Joly off the board and no longer chairman, the company enters a new phase, complicated at least in the short term by the outbreak of COVID-19, a disease caused by a member of the coronavirus family, as electronics manufacturing and supply chains have been particularly affected, according to a report last month from industry group IPC.
That makes the agreement to have Joly stick around especially wise. His advisory position is part-time, and it's not clear that he will continue after this year. He's agreed to provide services including "but not be limited to, advice on matters related to the business activities of the Company, general consultation and support on specific topics, and development and promotion of teen tech center systems and related activities in support of our joint efforts to provide tech opportunities to disadvantaged children and youth," according to an agreement between Joly and Best Buy included with the filing.
In that letter of agreement, Barry noted the company's gratitude. However, like any contract worker, he will have to provide his own office setup. To help with that, per the letter, Best Buy "hereby transfers" the laptop he has already been using as ex-CEO and board chairman. If he wants a new one, he'll have to head to Best Buy.