I just read a story in the newspaper (yes, I still read printed newspapers) that Best Buy Corporation profits were down 90%. In the same story was a small byline that said the new CEO got a hiring bonus of $20 million.
This is a business that’s closing stores and laying off people and they are giving one man $20 million just on a bet. It’s not a performance bonus or any kind of compensation that represents a job well done. He is also getting a seven figure salary and he’ll get performance bonuses if things go well.
Maybe, if he can recover half of what was lost, he would deserve a small bonus. But of course he’ll get that since the performance bonus he’ll be getting will be based on improvement from the dismal current status. If he pulled them out of the collapse and returned the business to performance seen in the boom times he might even deserve the $20 million as a bonus. But, stockholders, employees and customers will just have to pay cost of their big bet. My bet is that Amazon and Wal-Mart will be seeing an uptick in electronics sales while Best Buy slowly fades into nothing.