We all know that Best Buy is one of the country’s largest electronics retailers. Last year, the company was faced with poor stock performance and plenty of negative signs that the business was continuing to head south. Hubert Joly took the helm of Best Buy in September of 2012 and has managed to turn the company around fairly quickly. So why is he selling over 450,000 shares suddenly? To pay for a divorce.
$10.4 Million in Stock
John Waggoner at USA Today reported this morning that “CEO Hubert Joly sold $10.4 million in stock … because of his divorce, not because of his outlook for the company.” No big deal, right? But really, consumers and Wall Street both pay attention to the actions of CEOs to see how healthy or well-led a company is. Selling shares in a very public manner to pay for a divorce is a bizarre move for a CEO of Joly’s caliber.
Even though it seems clear that the sale is to pay for a divorce and not a sign that Best Buy is headed downhill again, some skeptics might wonder if something isn’t quite right at the top of Best Buy’s leadership. As a publicly traded company, this can have very real consequences for Best Buy.
But Best Buy looks healthy, despite all the divorce drama. An AP story posted on Business Week reminds us that Best Buy’s “stock has more than tripled since the start of the year.” Many analysts believe the progress will continues.
Amie wrote an excellent post for the CEM blog about Best Buy’s tricky situation and what it meant for brick and mortar stores back in April of last year. Joly has pulled Best Buy out of a tough spot, but his latest moves are frankly unbecoming in a CEO.
Running a Small or Large Business and the Choices You Make
Running a business is a lot of work. The time and skill required to steer your business in the right direction can seem overwhelming at times, but business owners around the country push work through those challenges every day. The choices business owners make on a daily basis, whether at their own small business, or as the CEO of a huge company, matter greatly.
Small businesses and their owners are well known for being more lax when it comes to personal and emotional decisions that relate to or involve their business. These decisions are always risk. Sometimes, nothing could go wrong, and other times the harm to the business can be serious.
I can’t remember a time when a CEO has done something in such a public manner for a very private affair. Putting personal and emotional issues ahead of the health or reputation of a business sometimes pays off for the individual, but maybe we should learn a bit of caution from Joly’s situation.
Did you ever do something similarly risky with your small business? What do you think of Joly’s choices?
Editor’s Note: After speaking with Jonathan Sandler of Best Buy we feel it is necessary to point out that there is nothing else happening here but the selling of stock. Not only was the disclosure made very publicly but the PR team of Best Buy have proactively pursued journalists on this issue. This is simply a guy that needed money to pay for his divorce and nothing else should be read into it 🙂
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