The Five Dumbest Things on Wall Street This Week: July 27
3. Best Buy Bonus Bunkum
Remember the old Woody Allen quote that "80% of success is showing up?" Well, add another 20% and you've got the new executive bonus plan for our good friends over at Best Buy (BBY).
We're serious. If you want to cash in at Best Buy then simply show up! All you need is a pulse, no performance required.We here at the Dumbest Lab first became aware of the struggling electronics retailer's generous pay scheme after reading a Bloomberg report saying Best Buy's highly regarded compensation consultant quit after the company gave millions of dollars in retention bonuses to more than 100 managers without attaching performance targets to those awards. Don Delves, president of the Chicago-based Delves Group, apparently walked off in protest over the decision after spending seven years as an independent consultant to Best Buy's compensation committee. Let's take a step back here. We need to wrap our heads around this thing. Best Buy's former CEO Brian Dunn leaves in April after a sex scandal. The company's stock is down almost 40% this year because Amazon (AMZN) and Apple (AAPL) are eating its lunch. And Best Buy's recently resigned Chairman Richard Schulze is weighing the idea of taking the company private. But regardless of all that disarray, these guys feel the need to pony up to retain their so-called talent. That's just batty. Speaking of which, somebody get former Oriole "Iron Man" Cal Ripken on the line. Tell him we've got the perfect job for him and he won't have to lift a finger, let alone worry about his batting average. "We're confident that the compensation paid by Best Buy is fair, reflects market realities and is based on responsible practices that reflect the transformation of the organization," said Best Buy spokesman Bruce Hight in a statement. Excuse us Bruce, but what "market realities" are you referring to? Where are these folks going to go? Circuit City? Nobody Beats the Wiz? The competition doesn't even exist anymore, so it's not like you are going to get into a bidding war over their services. Heck, even Crazy Eddie wasn't insane enough to pay people just to hang around...Okay, maybe he was, but look where that got him.
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