Best Buy's board of directors limited Barry's annual bonus despite achieving above-target results.
Corie Barry, CEO
Best Buy Co. Inc.
Total compensation: $8,434,482 for the year ended Jan. 30
Salary: $927,692
Non-equity incentive pay: $2,320,000
Other compensation: $86,102
Exercised stock options: $342,850
Value realized on vesting shares: $4,757,838
New stock options: 87,503
Median employee pay: $30,542
CEO pay ratio: 394 to 1
Total fiscal 2020 shareholder return: 28.4%
Note: The board of directors said in the annual proxy statement that the COVID-19 impact has affected all of its stakeholders from customers, employees and vendors.
It also affected the board's annual executive compensation process and the board elected to limit executive pay opportunities.
It reduced Barry's salary by 50% and the salaries of her executive team by 20% from April through September while also cutting their board retainers by 50% for half the year.
A surge in demand for home office products among other products drove record results by the end of the fiscal year. For the year ended Jan. 31 the company had revenue of $47.3 million, an 8% increase over the previous year, and it had earned $6.84 per share, a 19% increase from the $5.75 per share earned the year before. And adjusted EPS was $7.91 per share, a 30% annual increase.
That financial performance was above target for the year but the board elected to cap the annual incentive pay to the at-target amount. So Barry's annual cash incentive bonus of $2,320,000 could have been more.
Looking ahead to 2022 the board's focus on executive compensation continues to be on how best to recruit, retain and reward executives but it said in the proxy it is doing a careful review. "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," the board stated in the proxy.
During the early stages of the pandemic when most of its stores were closed the company said it did continue to pay employees for a month and then instituted hourly appreciation pay for its front-line workers when limed service returned. But by the end of the fiscal year total employment had shrunk from 125,000 to 102,000 as it closed some stores and shifted more focus to online sales.
The bulk of Barry's compensation for the year was from previously issued long-term equity awards including $4.8 million worth of restricted stock that vested during the year. The realized value of those awards during the year meant her total compensation increased 12.2% from the prior year.
The 394 to 1 CEO pay ratio is based off of Barry's total compensation of $12.o million as reported in the proxy's summary compensation table. That total includes the grant date value of new stock options and restricted shares that were issued to Barry last year.
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