PRE 14A 1 bbypreliminaryproxy2013.htm PRE 14A BBY Preliminary Proxy 2013


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.   )
 
 
 
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material pursuant to §240.14a-12
 
BEST BUY CO., INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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BEST BUY CO., INC.
 
 
 
7601 Penn Avenue South
 
 
 
Richfield, Minnesota 55423
 
 
 
 
 
 

NOTICE OF 2013 REGULAR MEETING OF SHAREHOLDERS

Time:
 
9:30 a.m., Central Time, on Thursday, June 20, 2013
Place:
 
Best Buy Corporate Campus — Theater
7601 Penn Avenue South
Richfield, Minnesota 55423
Internet:
 
Attend the Regular Meeting of Shareholders online, including submitting questions, at www.proxyvote.com or www.virtualshareholdermeeting.com/bby.
Items of Business:
 
1.
 
To elect the four Class 2 directors listed herein to serve on our Board of Directors for a term of two years and ratify two Class 1 directors listed herein to serve on our Board of Directors for a term of one year.
 
 
2.
 
To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending February 1, 2014.
 
 
3.
 
To conduct an advisory vote to approve our named executive officer compensation.
 
 
4.
 
To vote on management's proposal to amend and restate our Amended and Restated By-laws in order to implement declassification of our Board of Directors.
 
 
5.
 
To transact such other business as may properly come before the meeting.
Record Date:
 
You may vote if you were a shareholder of record of Best Buy Co., Inc., or if you held shares through a broker or other nominee as of the close of business on Monday, April 22, 2013.
Proxy Voting:
 
Your vote is important. You may vote via proxy as a shareholder of record:
 
 
 
 
1.
 
By visiting www.proxyvote.com on the Internet;
 
 
 
 
2.
 
By calling (within the U.S. or Canada) toll-free at 1-800-690-6903; or
 
 
 
 
3.
 
By signing and returning your proxy card, if you have received paper materials.
For shares held through a broker, bank or other nominee, you may vote by submitting voting instructions to your broker, bank or other nominee.
Regardless of whether you expect to attend the meeting in person, please vote your shares in one of the three ways outlined above.
 
 
 
 
 
By Order of the Board of Directors
 
 
Minneapolis, Minnesota
 
Keith J. Nelsen
May [8], 2013
 
Secretary







 
BEST BUY CO., INC.
 
 
 
7601 Penn Avenue South
 
 
 
Richfield, Minnesota 55423
 
 
 
 
 
 


Dear Fellow Shareholders,

This past year was a tumultuous one for Best Buy, by any measure.

It began with one chief executive and ended with another; saw the departure of several long-time executives and the introduction of several new ones; and, was the year in which our founder left the Company in an effort to take it private and, nine months later, became Chairman Emeritus in what was a clear signal of his support for the direction in which Best Buy is heading and the harmony with which he and senior management are now able to operate.

This past year was also significant because it was when the Company decided to take charge of its destiny, take on “showrooming” and declare it dead at the hands of our industry-leading Low Price Guarantee. In fact, if one were to sum it up, 2012 was the year in which the Company rejected the notion of “industry headwinds” and acknowledged that the Company's declining comparative sales and margins were due to its failure to execute. In the end, this was the year Best Buy began to Renew Blue.

Along the way the Board made several key decisions. Some received shareholder support and others did not. In the latter category fell our decision to offer our former CEO, Brian Dunn, a severance package. Many felt that the Company offered Mr. Dunn more than he was entitled to and that the payments did not accurately reflect his business performance in the previous year. This feedback ultimately took the form of a shareholder vote of “no” on "Say on Pay." It is fair to say that the Board and I have heard these concerns and take them into full account when determining future remuneration for senior executives.

In the middle of these tumultuous times, the Board also made the critical decision to extend continuity awards to key executives. Though we were being ably led at the time by our interim CEO, Mike Mikan, he was the interim chief executive. His ability to recruit and retain at the senior level was severely limited and the exposure the Company faced in losing key talent was enormous. The Board needed to act quickly, which is why the Compensation Committee approved a round of continuity grants needed to keep the Company running until a permanent CEO could be identified and put into place.

Another decision, one that resulted in a good outcome for all parties, was our determination to engage our founder, Richard Schulze, in good-faith discussions about his desire to buy the Company and take it private. While this triggered rounds of public speculation, rumor and conjecture the likes of which are rarely seen in corporate America, I think all reasonable observers would agree that we are now able to move forward with Dick once again acting as a strong and insightful voice inside our Company, supportive of where we are going and determined to lend his experience and talent to getting us there.

Finally, the Board made a decision about a permanent CEO. After an exhaustive search, we found a new CEO, Hubert Joly. He was as enthusiastic about joining Best Buy as we were to have him, and the merit of the Board's decision is evident in the hundreds of decisions, large and small, Hubert has made in the months since he started.

Most notably, Hubert stood up before shareholders and analysts in the middle of November, only ten weeks after he formally joined Best Buy, and shared his diagnosis of the Company's strengths and weaknesses and what he and his executive team intended to do about it. It was there that he laid out the Five Pillars of Renew Blue. Since then, he has systematically set out to demonstrate material movement on each of those pillars.





There are three areas in which the most visible and meaningful movement have occurred:

1)
Rejuvenating the Customer Experience: We announced our Low Price Guarantee, designed to address one of the top reasons customers coming to our website or stores did not purchase — and at the core of the “showrooming” phenomena.

This new policy gets to the heart of consumer price perception and is critical to our efforts to improve comparative store sales. To the extent that there is an impact to margins, we are covering it through greater efficiencies throughout our business.

2)
Working with Vendor Partners to Innovate and Drive Value: Behind the scenes we have made great progress in this area. The recent announcement with Samsung is proof of our determination to develop innovative, high-value partnerships with key vendors.

Many of our vendors are giants in the consumer electronics industry, spending billions in R&D. Without us, they would have few places in which their products could be showcased and explained by knowledgeable, impartial sales associates. With an increased focus on vendor relationships, our online and retail footprint becomes more and more valuable and our customers are better served.
 
3)
Increasing Return on Invested Capital for Shareholders: We have multiple opportunities to improve ROIC. One of our biggest commitments was to reduce SG&A expense by hundreds of millions of dollars and reduce Cost of Goods Sold by a nearly equal amount. During the fiscal 2013 Q4 earnings call, we announced $150 million in cost reduction initiatives had been enacted, and we indicated then that this was just a down payment on much more to come.

As part of this effort, we are removing management layers and complexity from our business, allowing us to act more nimbly and spend far less money.

There are many other areas of positive movement I could point to: our unique customer promise ("The latest devices and services in one place; knowledgeable, impartial advice; competitive prices; the ability to shop when and where a customer wants; and, support for the life of the product"), our meaningful online growth, high employee engagement and great success in attracting and retaining top talent, including a world-class Chief Administrative and Financial Officer, Sharon McCollam.

Yes, this past year started off with great challenge, but it has ended with even greater promise.

Our sales associates are known within the Company as “Blue Shirts” for the uniforms they proudly wear. It was for them that we named our transformation efforts “Renew Blue” and it is for them — and with them — that we will return this Company to its place of preeminence, making it the preferred authority and destination for technology products and services.

Thank you for your continued belief in Best Buy.


Hatim A. Tyabji
Chairman of the Board
Best Buy Co., Inc.






IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
REGULAR MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 20, 2013:
This Notice of 2013 Regular Meeting of Shareholders and Proxy Statement and our Transition Report on
Form 10-K for the fiscal year ended February 2, 2013, are available at www.proxyvote.com.
Help us make a difference by eliminating paper proxy mailings to your home or business. As permitted by rules adopted by the U.S. Securities and Exchange Commission ("SEC"), we are furnishing proxy materials to our shareholders primarily via the Internet. On or about May [8], 2013, we mailed to our shareholders a Notice of Internet Availability containing instructions on how to access our proxy materials, including our proxy statement and our annual report. The Notice of Internet Availability also includes instructions to access your form of proxy to vote via the Internet or by telephone. Other shareholders, in accordance with their prior requests, have received e-mail notification of how to access our proxy materials and vote via the Internet, or have been mailed paper copies of our proxy materials and proxy card.

Internet distribution of our proxy materials is designed to expedite receipt by our shareholders, lower the cost of the Regular Meeting of Shareholders and conserve precious natural resources. However, if you would prefer to receive paper proxy materials, please follow the instructions included in the Notice of Internet Availability. If you have previously elected to receive our proxy materials electronically, you will continue to receive email notification with instructions to access these materials via the Internet unless you elect otherwise.



ATTENDING THE REGULAR MEETING OF SHAREHOLDERS

Attending in person

Doors open at 9:00 a.m. Central Time

Meeting starts at 9:30 a.m. Central Time

You do not need to attend the meeting to vote if you submitted your proxy in advance of the meeting

Security measures may include bag search, bag scan, metal detector and hand-wand search

The use of cameras and recording devices is prohibited

Attending and participating via the Internet

Webcast starts at 9:30 a.m. Central Time

Shareholders may vote and submit questions while attending the meeting via the Internet

Instructions on how to attend and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at www.proxyvote.com

You may directly link to the virtual shareholder forum and virtual shareholder meeting at www.virtualshareholdermeeting.com/bby

Anyone can view the meeting live via the Internet at www.investors.bestbuy.com

Webcast replay will be available until June 27, 2013







TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


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BEST BUY CO., INC.
7601 Penn Avenue South
Richfield, Minnesota 55423
_______________________________________________________________________________

PROXY STATEMENT
_______________________________________________________________________________


REGULAR MEETING OF SHAREHOLDERS — JUNE 20, 2013


GENERAL INFORMATION

This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors ("Board") of Best Buy Co., Inc. ("Best Buy," "we," "us," "our" or the "Company") to be voted at our 2013 Regular Meeting of Shareholders (the "Meeting") to be held on Thursday, June 20, 2013, at 9:30 a.m., Central Time, at the Best Buy Corporate Campus — Theater, 7601 Penn Avenue South, Richfield, Minnesota, 55423 and on the Internet at www.proxyvote.com or www.virtualshareholdermeeting.com/bby, or at any postponement or adjournment of the Meeting. The proxy materials, including the proxy statement, our annual report and form of proxy, were either made available to you over the Internet or mailed to you beginning on or about May [8], 2013.

Background

What is the purpose of the Meeting?

At the Meeting, shareholders will vote on the items of business outlined in the Notice of 2013 Regular Meeting of Shareholders ("Meeting Notice") included as the cover page to this proxy statement. In addition, management will report on our business and respond to questions from shareholders.

Why did I receive this proxy statement and a proxy card or the Notice of Internet Availability?

You received this proxy statement and a proxy or the Notice of Internet Availability because you owned shares of Best Buy common stock as of April 22, 2013, the record date for the Meeting, and are entitled to vote on the items of business at the Meeting. This proxy statement describes the items of business that will be voted on at the Meeting and provides information on these items so that you can make an informed decision.

Who may vote?

In order to vote at the Meeting, you must be a shareholder of record of Best Buy as of April 22, 2013, which is the record date for the Meeting. If your shares are held in "street name" (that is, through a bank, broker or other nominee), you will receive instructions from the shareholder of record that you must follow in order for your shares to be voted as you choose.

When is the record date?

The Board has established April 22, 2013, as the record date for the Meeting.

How many shares of Best Buy common stock are outstanding?

As of the record date, there were XXX,XXX,XXX shares of Best Buy common stock outstanding. There are no other classes of capital stock outstanding.



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Voting Procedure

On what items of business am I voting?

You are being asked to vote on the following items of business:

1.
The election of the four Class 2 directors listed herein for a term of two years expiring in 2015 and the ratification of two Class 1 directors listed herein for a term of one year expiring in 2014;

2.
The ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending February 1, 2014;

3.
The advisory vote to approve our named executive officer compensation;

4.
The management proposal to amend and restate our Amended and Restated By-laws in order to implement declassification of our Board of Directors; and

5.
Such other business as may properly come before the Meeting.

How does the Board recommend that I vote?

Our Board recommends that you vote your shares:

“FOR” the election and ratification of directors as set forth in this proxy statement;
 
“FOR” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending February 1, 2014;
·
“FOR” the non-binding approval of our named executive officer compensation; and
 
“FOR” the approval of the amendment and restatement of our Amended and Restated By-laws to implement declassification of our Board of Directors.
 
If you are a record holder and you sign and submit your proxy card without indicating your voting instructions, your shares will be voted as indicated above.

How do I vote?

If you are a shareholder of record (that is, if your shares are owned in your name and not in "street name"), you may vote:

Via the Internet at www.proxyvote.com;

By telephone (within the U.S. or Canada) toll-free at 1-800-690-6903;

By signing and returning the enclosed proxy card if you have received paper materials; or

By attending the Meeting and voting in person.

If your shares are held in a brokerage account by a broker, bank or other nominee, you should follow the voting instructions provided by your broker, bank or other nominee.

If you wish to vote by telephone, you must do so before 11:59 p.m., Eastern Time, on Wednesday, June 19, 2013. After that time, telephone voting will not be permitted, and a shareholder of record wishing to vote must submit a signed proxy card or vote in person or via the Internet. Shareholders can vote in person or via the Internet during the Meeting. Shareholders of record will be on a list held by the inspector of elections. "Street name" shareholders, also known as beneficial owners, must obtain a proxy from the institution that holds their shares, whether it is their brokerage firm, a bank or other nominee, and present it to the inspector of elections with their ballot in order to vote at the Meeting. Shareholders attending via the Internet will need to follow the instructions at www.proxyvote.com or www.virtualshareholdermeeting.com/bby in order to vote or

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submit questions at the Meeting. Voting in person or via the Internet by a shareholder during the Meeting will replace any previous votes submitted by proxy.

In accordance with the rules of the SEC, we are making available to all shareholders who have not affirmatively opted to receive paper materials, all of their proxy materials via the Internet. However, you may opt to receive paper copies of proxy materials, at no cost to you, by following the instructions contained in the Notice of Internet Availability that we have mailed to all shareholders. We encourage you to take advantage of the option to vote your shares electronically through the Internet or by telephone. Doing so will result in cost savings for the Company.

How are my voting instructions carried out?

When you vote via proxy, you appoint the Chairman of the Board, Hatim A. Tyabji, and the Secretary of the Company, Keith J. Nelsen, (collectively, the "Proxy Agents") as your representatives to vote at the Meeting. The Proxy Agents will vote your shares at the Meeting, or at any postponement or adjournment of the Meeting, as you have instructed them on the proxy card. If you return a properly executed proxy card without specific voting instructions, the Proxy Agents will vote your shares in accordance with the Board's recommendations as disclosed in this proxy statement. If you submit a proxy, your shares will be voted regardless of whether you attend the Meeting. Even if you plan to attend the Meeting, it is advisable to vote your shares via proxy in advance of the Meeting in case your plans change.

If an item properly comes up for vote at the Meeting, or at any postponement or adjournment of the Meeting, that is not described in the Meeting Notice, including adjournment of the Meeting and any other matters incident to the conduct of the Meeting, the Proxy Agents will vote the shares subject to your proxy in their discretion. Discretionary authority for them to do so is contained in the proxy.

How many votes do I have?

You have one vote for each share you own, and you can vote those shares for each item of business to be addressed at the Meeting.

How many shares must be present to hold a valid Meeting?

For us to hold a valid Meeting, we must have a quorum, which means that a majority of the outstanding shares of our common stock that are entitled to vote are present or represented by proxy at the Meeting. Your shares will be counted as present at the Meeting if you:

Vote via the Internet or by telephone;

Properly submit a proxy card (even if you do not provide voting instructions); or

Attend the Meeting in person.

Broker non-votes, as defined below, will be included in determining the presence of a quorum at the Meeting so long as there is at least one routine matter which the broker, bank or other nominee can vote on, as is the case with the Meeting. In addition, abstentions on any matter are included in determining the presence of a quorum.

How many votes are required to approve an item of business and what are the effects of abstentions and broker non-votes on the voting results?

Pursuant to our Amended and Restated Articles of Incorporation and our Amended and Restated By-laws, each item of business to be voted on by the shareholders at the meeting, with the exception of Item 1 and Item 4, requires the affirmative vote of the holders of a majority of the voting power of the shares of Best Buy common stock present at a meeting and entitled to vote. Item 1, the election of directors, requires the affirmative vote of a majority of votes cast with respect to the director. Item 4, management's proposal to amend Section I, Article III of the Company's Amended and Restated By-laws requires an affirmative vote of at least sixty-six and two-thirds percent (66-2/3%) of our outstanding shares entitled to vote.

Under the rules of the New York Stock Exchange (“NYSE”), if you are a beneficial owner of shares and you do not provide your voting instructions to your broker, bank or nominee, that firm has discretion to vote your shares for certain routine matters. The ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm is considered a routine matter under NYSE rules. On the other hand, your broker, bank or nominee does not have discretion to


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vote your shares for non-routine matters.The election of directors, the advisory vote related to executive compensation, and management's proposal to amend the Company's Amended and Restated By-laws are not considered routine matters under NYSE rules.

When a broker, bank or nominee votes a beneficial owner's shares on certain but not all of the proposals, because it is unable to vote due to the beneficial owner's failure to provide voting instructions on a matter as to which the broker, bank or nominee has no discretion to vote otherwise, the missing votes are referred to as “broker non-votes.”

Abstentions will have the same effect as votes against Items 2, 3, and 4 described in this proxy statement, but will have no effect on Item 1. Broker non-votes will have no effect on Items 1 and 3, but will have the same effect as a vote against Item 4.

What if I change my mind after I vote via proxy?

If you are a shareholder of record, you may revoke your proxy at any time before your shares are voted by:

Submitting a later-dated proxy prior to the Meeting (by mail, Internet or telephone);

Voting in person at the Meeting (attendance will not, by itself, revoke a proxy); or

Providing timely written notice of revocation to Best Buy's Secretary at our principal office.

If your shares are held in a brokerage account by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or other nominee.

Where can I find the voting results of the Meeting?

We plan to publish the final voting results in a Current Report on Form 8-K ("Form 8-K") filed within four business days of the Meeting. If final voting results are not available within the four business day timeframe, we plan to file a Form 8-K disclosing preliminary voting results within the required four business days, to be followed as soon as practicable by an amendment to the Form 8-K containing final voting results.

Proxy Solicitation

How are proxies solicited?

We expect to solicit proxies primarily by Internet and mail, but our directors, officers, other employees and agents may also solicit proxies in person, by telephone, through electronic communication and by facsimile transmission. We will request that brokerage firms, banks, other custodians, nominees, fiduciaries and other representatives of shareholders forward the Notice of Internet Availability and, as applicable, the proxy materials and annual reports themselves, to the beneficial owners of our common stock. Our directors and employees do not receive additional compensation for soliciting shareholder proxies. We have retained Georgeson Inc. to act as our proxy solicitor for a fee estimated to be $25,000, plus reimbursement of out-of-pocket expenses.

Who will pay for the cost of soliciting proxies?

We pay all of the costs of preparing, printing and distributing our proxy materials and of our proxy solicitor, Georgeson, Inc., as described above. We will reimburse brokerage firms, banks and other representatives of shareholders for reasonable expenses incurred as defined in the NYSE schedule of charges.

How can multiple shareholders sharing the same address request to receive only one set of proxy materials and other investor communications?

You may elect to receive future proxy materials, as well as other investor communications, in a single package per address. This practice, known as "householding," is designed to reduce our paper use, and printing and postage costs. To make the election, please indicate on your proxy card under "Householding Election" your consent to receive such communications in a single package per address. Once we receive your consent, we will send a single package per household until you revoke your consent or request separate copies of our proxy materials by notifying our Investor Relations Department in writing at 7601 Penn Avenue South, Richfield, MN, 55423, or by telephone at 612-291-6147. We will start sending you individual copies of proxy materials and other investor communications following receipt of your revocation.

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Can I receive the proxy materials electronically?

Yes. All shareholders may access our proxy materials electronically via the Internet. We encourage our shareholders to access our proxy materials via the Internet because it reduces the expenses for, and the environmental impact of, our shareholder meetings. You may opt to receive paper copies of proxy materials, including our Transition Report, proxy statement, and proxy card at no cost to you, by following the instructions on your Notice of Internet Availability.

An electronic version of this proxy statement is posted on our website at www.investors.bestbuy.com — select the "SEC Filings" link or the "Corporate Governance" link.

Additional Information

Where can I find additional information about Best Buy?

Our reports on Forms 10-K, 10-Q and 8-K, and other publicly available information should be consulted for other important information about Best Buy. You can also find additional information about us on our website at www.investors.bestbuy.com.


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PROXY SUMMARY

It is well known that Best Buy had a tumultuous year, one in which the Company and its Board faced, and responded to, a range of unusual and difficult circumstances. In an effort to give context to this proxy statement and the decisions reflected herein, our Chairman has written a letter to all shareholders dated May [8], 2013, which is provided to you with this proxy statement.

As is made clear in that letter, the Board made a number of decisions in the context of the events of last year, as discussed more fully in this proxy statement:

Governance. Consistent with its ongoing commitment to best practices in corporate governance, the Board chose to take action during the year to strengthen its governance practices. First, in determining who to appoint as its new Chairman, the Board chose an independent director, Hatim A. Tyabji, the first independent Chairman in the Company's history. The Board further chose to support a shareholder proposal to declassify its Board structure at its June 2012 Regular Meeting of Shareholders. Upon passage of that advisory proposal, the Board committed to implementing declassification, as evidenced by the Item 4, management's proposal to amend our Amended and Restated By-laws, included in this proxy statement.

Appointment of a New Chief Executive Officer. The Board also did the critical work of identifying, recruiting and appointing a new Chief Executive Officer (“CEO”), Hubert Joly. Mr. Joly has worked to build an executive team, establish a strategy to transform Best Buy and begin implementation of that strategy. The early results of that work have been promising, through improved business performance, disciplined cost control and a recent resurgence in our share price.

Positive Resolution with Our Founder. The Board undertook the important work of addressing the highly-publicized interest by our founder, Richard M. Schulze, in taking the Company private. The hard work undertaken by all sides in this matter led to a reconciliation between Mr. Schulze and the Company in support of current management and the nomination by him of two directors to the Board, both of whom are currently on the Board and will stand for election at this year's Meeting. The return of our founder and largest shareholder in his role as Chairman Emeritus will allow Mr. Schulze to advise and support the Company.

Executive Compensation. The Board also had to make a number of compensation-related decisions, which are discussed in detail in Executive and Director Compensation — Compensation Discussion and Analysis (our "CD&A"). These decisions fall into two distinct categories:

Decisions to Address the Crisis. The first category comprises decisions made in response to the crisis, which reflect the difficult balance of interests the Board had to weigh given the extraordinary circumstances it faced.

Decisions to Drive Future Performance. This second category deals with decisions made in an effort to drive the progress of the Company going forward, through which the Company has affirmed its commitment to market-based and performance-driven compensation.

It is in the context of these circumstances and actions that we ask shareholders to consider and vote on the following shareholder items: 

Item 1: Election of Directors
We have four Class 2 director nominees standing for election and two Class 1 director nominees standing for ratification by our shareholders this year. You will find information about all of our directors' qualifications and experience within Item 1. All of our director nominees have unique skills, proven leadership, sound judgment and integrity.

Item 2: Ratification of Appointment of our Accounting Firm
We are asking our shareholders to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal 2014.

Item 3: Advisory Vote on Executive Compensation
For the third year, our shareholders have the opportunity to cast a non-binding, advisory vote on our executive compensation program, the "Say on Pay" vote, as set forth in Item 3. We have discussed in the CD&A how we have engaged our shareholders over the past year and how we have addressed their concerns in this area that resulted in last year's unfavorable vote. In evaluating this year's "Say on Pay" proposal, we recommend that you review our CD&A,

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which explains how and why the Compensation and Human Resources Committee arrived at its executive compensation decisions for fiscal 2013.

Item 4: Management Proposal to Amend the Company's Amended and Restated By-laws
You are being asked to consider a proposal put forth by management to amend our Amended and Restated By-laws ("By-laws") as necessary to effectuate declassification of our Board of Directors. In response to the shareholder support received for the shareholder proposal for declassification put forth at the 2012 Regular Meeting of Shareholders, the Board committed to implementing a declassified board structure. Amending our By-laws is the first step in that process. More information regarding the proposal can be found in Item 4.





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CORPORATE GOVERNANCE AT BEST BUY

Our Board is elected by our shareholders to oversee our business and affairs. In addition, the Board counsels, advises and oversees management in the long-term interests of the Company and our shareholders regarding a broad range of subjects including:

Selecting and evaluating the performance of our CEO;

Reviewing and approving major financial, strategic and operating decisions and other significant actions;

Overseeing the conduct of our business and the assessment of our business risks to evaluate whether our business is being properly managed;

Overseeing the processes for maintaining integrity with regard to our financial statements and other public disclosures, and compliance with legal and ethical standards; and

Planning for succession with respect to the position of CEO and monitoring management's succession planning for other senior executives.

Members of the Board monitor and evaluate our business performance through regular communication with our CEO and by attending Board meetings and Board committee meetings.

The Board values effective corporate governance and adherence to high ethical standards. As such, the Board has adopted Corporate Governance Principles for our directors and a Code of Business Ethics, both of which are posted on our website at www.investors.bestbuy.com — select the "Corporate Governance" link.

Board Structure and Declassification

Our Board is committed to having a sound governance structure that promotes the best interests of our shareholders. To that end, our Board has evaluated and actively continues to examine emerging corporate governance trends and best practices. Shareholder perspectives play an important role in that process. Some key points regarding our Board's governance structure and practices are as follows:

Consistent with its commitment to strong corporate governance principles, the Board has revised its position on a classified board structure. As evidenced by the management proposal included in this proxy statement to amend the Company's By-laws, the Board is seeking to declassify its board structure so that each director stands for re-election on an annual basis. If approved by shareholders, this change will be implemented starting with directors up for elections in 2014.

Our Board is overwhelmingly independent. Of our ten directors, only one, our CEO, is a Best Buy employee. Further, the Board has affirmatively determined that eight of our ten directors are independent under SEC and NYSE corporate governance rules, as applicable.

Our Board is very active and engaged. Our directors attended, on average, over 95% of fiscal 2013 Board and Board committee meetings.

Board Leadership

We separate the roles of CEO and Chairman of the Board in recognition of the differences between the two roles. Our CEO is responsible for setting our strategic priorities, in collaboration with the Board, and focuses on the development and execution of our strategies. He is also responsible for our ongoing leadership and performance. The Chairman of the Board provides guidance to the CEO, and sets the agenda for and presides over meetings of the full Board. He also focuses on Board oversight responsibilities, risk management and strategic planning. In addition, our Chairman periodically represents the Company at public functions and actively engages with our employees at designated Company functions.

Our former director Matthew H. Paull served as the Board's Lead Independent Director from June 2010 until his retirement in April 2013. The Board has not appointed another director to serve in this position in light of the fact that our current Chairman of the Board is independent. Our Chairman of the Board is currently presiding over executive sessions of the independent directors and fulfilling the other functions that the Lead Independent Director would otherwise fulfill. Consistent with NYSE

14



rules, our Corporate Governance Principles only require a Lead Independent Director to lead executive sessions of independent directors if our Chairman of the Board is not independent. Our Board established the position of Lead Independent Director to preside at all executive sessions of independent directors, as defined under the rules of the NYSE, in situations where the Chairman of the Board is not an independent director. In addition to presiding over executive sessions of the independent directors, any Lead Independent Director appointed in the absence of an independent Chairman is responsible for calling meetings of the independent directors as appropriate, serving as a stakeholder liaison on behalf of the independent directors and performing such other duties as may be requested from time to time by the Board, the independent directors, the CEO or the Chairman of the Board.

Board Composition

To ensure a diversity of perspectives, the Board seeks a wide range of experience and expertise. This combination of perspectives helps to ensure that we sustain our corporate culture, which is a cornerstone of our business legacy and a key competitive advantage.

In accordance with these interests and the principles of effective corporate governance, the Board set and has achieved its goal to have at least 75% of our directors be independent. In addition, the Board carefully plans for the director skill sets required today and in the future, and for an orderly succession and transition of directors.

Pursuant to agreements entered into between the Company and Richard M. Schulze, our founder and beneficial owner of approximately 20% of the Company as of the date of filing, Mr. Schulze is entitled to nominate two directors for appointment to our Board until he reaches the age of 75. In the event either of Mr. Schulze's nominated directors resigns from the Board or are forced to leave the Board due to death, disability or serious illness, or are not elected at the applicable meeting of shareholders by the requisite vote of shareholders, Mr. Schulze will have the right to designate their successor, subject to satisfaction of the Company’s director qualification standards and the Board’s approval, which shall not be unreasonably withheld. For more information regarding our agreements with Mr. Schulze, please see the Certain Relationships and Related Party Transactions section of this proxy statement, as well as the Current Reports on Form 8-K filed by the Company on August 26, 2012, December 14, 2012 and March 25, 2013.

Executive Sessions of Independent Directors

In order to promote open discussion among independent directors, the Board has a policy of conducting executive sessions of independent directors during each regularly scheduled Board meeting. During fiscal 2013, the executive sessions were chaired by the Lead Independent Director. Mr. Paull served as the Lead Independent Director from June 2010 until his retirement in April 2013. From that time forward, our independent Chairman, Hatim A. Tyabji, has chaired the executive sessions of independent directors as permitted under our Corporate Governance Principles and NYSE requirements, and he will continue to do so for as long as he remains our independent Chairman.

Board Meetings and Attendance

The Board held four regular meetings and three special meetings during the fiscal year ended February 2, 2013 (an 11-month transition year as a result of the change in our fiscal year-end beginning in the first quarter of fiscal 2013). Each incumbent director attended, in person or by telephone, at least 75% of the meetings of both the Board and Board committees on which he or she served. In fiscal 2013, the average attendance by our incumbent directors at Board and Board committee meetings exceeded 95%. Our Board requires director attendance at our Regular Meetings of Shareholders, and 100% of the then-serving directors attended the 2012 meeting.

Committees of the Board

The Board has the following four committees:

Audit Committee;

Compensation and Human Resources Committee ("Compensation Committee");

Nominating, Corporate Governance and Public Policy Committee ("Nominating Committee"); and

Finance and Investment Policy Committee.



15



The charters for each of the Board committees are posted on our website at www.investors.bestbuy.com — select the "Corporate Governance" link. The charters include information regarding each committee's composition, purpose and responsibilities.

The Board has determined that all members of the Audit Committee, Compensation Committee and Nominating Committee are independent directors as defined under the SEC and NYSE corporate governance rules for such committees, and are "outside directors" for purposes of Internal Revenue Code section 162(m), as applicable. The Board has further determined that two of the three members of the Audit Committee qualify as financial experts under SEC rules.

Among other duties, the Board committees have the following responsibilities:

Audit Committee.    This committee discharges the Board's oversight responsibility to our shareholders and the investment community regarding: (i) the integrity of our financial statements and financial reporting processes; (ii) our internal accounting systems and financial and operational controls; (iii) the qualifications and independence of our independent registered public accounting firm; (iv) the performance of our internal audit function and our independent registered public accounting firm; (v) the preparation of a report as required by the SEC to be included in this proxy statement; and (vi) our compliance with ethics programs, including our Code of Business Ethics, and legal, regulatory and risk oversight requirements.

Compensation Committee.    This committee discharges the Board's responsibilities related to executive officer and director compensation, including the establishment of our executive officer and director compensation philosophies, evaluating the performance of our CEO, approving CEO and executive officer compensation, and preparation of a report as required by the SEC to be included in this proxy statement. Oversight responsibilities of this committee include succession planning and compensation-related risk oversight. This committee also approves and oversees the development and evaluation of equity-based and other incentive compensation and certain other employee benefit plans of a compensatory nature.

Nominating Committee.    This committee discharges the Board's responsibilities related to general corporate governance, including Board organization, membership, training and evaluation. It also reviews and recommends corporate governance principles to the Board, screens candidates and presents qualified individuals for election to the Board, and oversees the evaluation of the performance of the Board and its committees. Finally, this committee oversees matters of public policy and corporate responsibility and sustainability that affect us domestically and internationally. For additional information regarding our director nomination process, see Item of Business No. 1 – Election of Directors – Director Nomination Process.

Finance and Investment Policy Committee.    This committee advises the Board regarding our financial policies and financial condition to help enable us to achieve our long-range goals. It evaluates and monitors the: (i) protection and safety of our cash and investments; (ii) achievement of reasonable returns on financial assets within acceptable risk tolerance; (iii) maintenance of adequate liquidity to support our activities; (iv) assessment of the cost and availability of capital; and (v) alignment of our strategic goals and financial resources.

The following table shows the date each committee was established, the number of meetings held in fiscal 2013 and the names of the directors serving on each committee as of February 2, 2013, our fiscal year end:
Committee
 
Date
Established
 
Number of
Meetings
During
Fiscal 2013

 
Members
Audit
 
June 1, 1984
 
11

 
Hatim A. Tyabji*†
Matthew H. Paull†
Gérard R. Vittecoq†
Compensation and Human Resources
 
February 13, 1997
 
7

 
Ronald James*
Lisa M. Caputo Kathy J. Higgins Victor
Sanjay Khosla
Nominating, Corporate Governance and Public Policy
 
February 13, 1997
 
4

 
Kathy J. Higgins Victor* Lisa M. Caputo
Sanjay Khosla
Finance and Investment Policy
 
September 13, 2006
 
5

 
Matthew H. Paull*
Ronald James
Gérard R. Vittecoq
*
Chair

16



Designated as an "audit committee financial expert" per SEC rules.
Please note, the Board's Global Strategy Committee was disbanded in August 2012, when the Board determined that the transformational strategy planning for the Company would be undertaken by the Board as a whole.
On April 17, 2013, several director transitions took place, including Mr. Paull's retirement from the Board, the appointment of Mr. Russell P. Fradin to the Board, and the notice by Mr. Ronald James of his intent to resign from the Board at the end of his term and not stand for re-election at the Meeting. In light of these director transitions, the Board approved changes to the Committee membership as presented below, to be effective on April 17, 2013.
Committee
 
 
 
 
 
Members
Audit
 
 
 
 
 
Hatim A. Tyabji*†
Allen U. Lenzmeier
Gérard R. Vittecoq†
Compensation and Human Resources
 
 
 
 
 
Ronald James*(1)
Lisa M. Caputo Russell P. Fradin Kathy J. Higgins Victor
                      
Nominating, Corporate Governance and Public Policy
 
 
 
 
 
Kathy J. Higgins Victor* Lisa M. Caputo
Sanjay Khosla
Finance and Investment Policy
 
 
 
 
 
Gérard R. Vittecoq*
Bradbury H. Anderson Ronald James(1)
Allen U. Lenzmeier
*
Chair
Designated as an "audit committee financial expert" per SEC rules.
(1)
Mr. James is retiring from the Board and will not be standing for re-election at the 2013 Regular Meeting of Shareholders scheduled for June 20, 2013. A new chair for the Compensation Committee will be appointed at that time.

Board Risk Oversight

Our Board is responsible for oversight of enterprise risk. The Board considers enterprise risk factors as critical in its review of business strategy and performance and ensures that there is an appropriate balance of risk and opportunity. Management is responsible for the day-to-day risk management processes, including assessing and taking actions necessary to manage risk incurred in connection with the operation of our business. Management reviews significant enterprise risks and our general risk management strategy with the Board. We believe this division of responsibilities is the most effective approach for addressing the risks we face and that our Board leadership structure supports this approach.

In connection with the Board's oversight function, the Board committees have responsibility for reviewing and discussing with management those risk exposures either (i) specified in their charters or (ii) identified from time to time by the committees themselves, as follows:

Our Audit Committee is responsible for oversight of risk associated with our financial controls and compliance activities. The Audit Committee also oversees management's processes to identify and quantify the material risks that we face. In connection with its risk oversight role, the Audit Committee meets privately with representatives of our independent registered public accounting firm, our internal audit staff and our legal staff. Our internal audit staff, who report directly to the Audit Committee at least quarterly, assists management in identifying, evaluating and implementing risk management controls and procedures to address identified risks.

Our Compensation Committee is responsible for oversight of risk associated with our compensation plans.

Our Nominating Committee is responsible for oversight of Board processes, corporate governance-related risk and activities in the public policy and social responsibility arenas.

Our Finance and Investment Policy Committee is responsible for oversight of risk associated with our investment portfolio and liquidity risks.


17




In connection with their oversight of compensation-related risks, Compensation Committee members periodically review the most important enterprise risks to ensure that compensation programs do not encourage risk-taking that is reasonably likely to have a material adverse effect on us. The review process identified our existing risk management framework and the key business risks that may materially affect us; reviewed all compensation plans and identified those plans that are most likely to impact these risks or introduce new risks; and balanced these risks against our existing processes and compensation program safeguards. The review process also took into account mitigating features contained within our compensation plan design which includes elements such as:

metric-based pay,

time matching,

payment for outputs,

goal diversification,

stock ownership guidelines,

payment caps, and

clawbacks.

The Compensation Committee also considered additional controls outside of compensation plan design which contribute to risk mitigation, including the independence of our performance measurement teams and our internal control environment.

Based upon the process we employed, the Compensation Committee determined that our compensation programs do not encourage risk-taking that is reasonably likely to result in a material adverse effect on us.

Director Orientation and Continuing Education

Our Nominating Committee oversees the orientation and continuing education of our directors. Director orientation familiarizes directors with our strategic plans, significant financial, accounting and risk management issues, compliance programs and other controls, policies, principal officers and internal auditors and our independent registered public accounting firm. The orientation also addresses Board procedures, directors' responsibilities, our Corporate Governance Principles and our Board committee charters.

We also offer continuing education programs and provide opportunities to attend commercial director education seminars outside of the Company to assist our directors in maintaining their expertise in areas related to the work of the Board and the directors' committee assignments.

Director Independence

Pursuant to its Corporate Governance Principles, the Board has established independence standards consistent with the requirements of the SEC and NYSE corporate governance rules, as applicable. To be considered independent under the NYSE rules, the Board must affirmatively determine that a director or director nominee does not have a material relationship with us (directly, or as a partner, shareholder or officer of an organization that has a relationship with us). In addition, NYSE rules generally provide that no director or director nominee may be deemed independent if the director or director nominee

— has in the past three years:

Received (or whose immediate family member has received as a result of service as an executive officer) more than $120,000 during any 12-month period in direct compensation from Best Buy, other than director and committee fees and certain pension payments and other deferred compensation;

Been an employee of Best Buy;

Had an immediate family member who was an executive officer of Best Buy;


18



Personally worked on (or whose immediate family member has personally worked on) our audit as a partner or an employee of our internal auditors or independent registered public accounting firm; or

Been (or whose immediate family member has been) employed as an executive officer of another company whose compensation committee at that time included a present executive officer of Best Buy; or

— is:

A partner or employee of our independent registered public accounting firm, or a director whose immediate family member is a partner of such firm or is employed by such firm and personally works on our audit; or

An employee (or has an immediate family member who is an executive officer) of another company that has made payments to Best Buy, or received payments from Best Buy, for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other company's consolidated gross revenues.

Under our director independence standards described above, the Board has determined that each director who served during any part of the last completed fiscal year and each director nominee is independent, with the exception of Hubert Joly, our current CEO; Bradbury H. Anderson, current director and our former CEO whose employment with the Company concluded November 1, 2010; Brian J. Dunn, our former CEO and former director; former director George L. Mikan III, for the period of time that he served as our interim CEO; and Richard M. Schulze, our founder and former Chairman of the Board. As part of its determination of Mr. Lenzmeier's independence, the Board considered the relationship discussed in the Certain Relationships and Related Party Transactions section of this proxy statement. The Board based these determinations primarily on a review of the responses of the directors to questions regarding employment and compensation history, affiliations, family and other relationships, and on discussions with our directors.

Communications with the Board

Shareholders and interested parties who wish to contact the Board, any individual director, or the non-management or independent directors as a group, are welcome to do so in writing, addressed to such person(s) in care of:

Mr. Keith J. Nelsen
Executive Vice President, General Counsel, Chief Risk Officer and Secretary
Best Buy Co., Inc.
7601 Penn Avenue South
Richfield, Minnesota 55423

Mr. Nelsen will forward all written shareholder correspondence to the appropriate director(s), except for spam, junk mail, mass mailings, customer complaints or inquiries, job inquiries, surveys, business solicitations or advertisements, or patently offensive or otherwise inappropriate material. Mr. Nelsen may, at his discretion, forward certain correspondence, such as customer-related inquiries, elsewhere within the Company for review and possible response. Comments or questions regarding our accounting, internal controls or auditing matters will be referred to the Audit Committee. Comments or questions regarding the nomination of directors and other corporate governance matters will be referred to the Nominating Committee. Comments or questions regarding executive compensation will be referred to the Compensation Committee.



19



ITEM OF BUSINESS NO. 1 — ELECTION OF DIRECTORS

General Information

Our Amended and Restated By-laws provide that our Board consist of one or more directors, that the number of directors may be increased or decreased from time to time by the affirmative vote of a majority of the directors serving at the time that the action is taken, that there will be two classes of directors and that each class of directors will consist, as nearly as possible, of one-half of the total number of directors constituting the entire Board. The number of directors on our Board is reviewed and set by our Board no less often than annually. In April 2013, the Board approved the number of directors serving on the Board to be nine members, to be effective as of the date of the Meeting, in light of the number of continuing directors and director nominees standing for re-election at the Meeting. The Board will continue to evaluate the size of the Board and make adjustments as needed to meet the current and future needs of the Company.

If Item 4 in this proxy statement is approved by shareholders, our directors will stand for re-election on an annual basis beginning with the directors nominated in 2014. For more information regarding the amendment to our Amended and Restated By-laws to facilitate the declassification of our Board, please see Item 4, Management's Proposal to Amend and Restate the Company's Amended and Restated By-laws.

Director Qualification Standards

We only consider director candidates who embody the highest standards of personal and professional integrity and ethics and are committed to a culture of transparency and open communication at the Board level and throughout the Company. Successful candidates are dedicated to accountability and continuous improvement with a belief in innovation as a key business success factor. They are also actively engaged and have an innate intellectual curiosity and entrepreneurial spirit. Commitment to enhancing shareholder value and representing the interests of all shareholders is also required.

In evaluating candidates for nomination as a director, the Nominating Committee considers other criteria, including a history of achievement and superior standards, an ability to think strategically, a willingness to share examples based upon experience, policy-making experience, and an ability to articulate a point of view, take tough positions, and constructively challenge management. Directors must also be committed to actively engaging in his or her Board roles, with sufficient time to carry out the duties of Board and Board committee membership. The Nominating Committee will also consider gender, ethnic and geographical diversity in evaluating candidates along with independence and general criteria such as an ability to provide informed and thoughtful counsel, mature judgment and listening skills.

Our Corporate Governance Principles specify that diversity on the Board be considered by the Nominating Committee in the director identification and nomination process. When considering candidates, the Nominating Committee seeks nominees with a broad range of experience from a variety of industries and professional disciplines, such as finance, academia, law and government, along with a diversity of gender, ethnicity, age and geographic location. The Nominating Committee does not assign specific weights to particular criteria, and no particular criterion is necessarily applied to all prospective nominees. The Board believes that diversity in the backgrounds and qualifications of Board members provides a significant mix of experience, knowledge and abilities that allows the Board to fulfill its responsibilities.

Finally, one or more of our directors must possess the education or experience required to qualify as an "audit committee financial expert" pursuant to SEC rules.

Director Nomination Process

The Nominating Committee is responsible for screening and recommending to the full Board director candidates for nomination. The Nominating Committee often engages a third-party search firm to assist in identifying appropriate candidates to consider as additions to our Board. When the Board is seeking to fill an open director position, the Nominating Committee will also consider nominations received from our shareholders, provided that proposed candidates meet the requisite director qualification standards discussed above.

When the Board elects to add a director to the Board, the Nominating Committee will announce the search and post any additional search criteria on our website at www.investors.bestbuy.com — select the "Corporate Governance" link. Candidates recommended by shareholders, if qualified, will be considered in the same manner as any other candidate.

The Nominating Committee will then evaluate the resumes of any qualified candidates recommended by a search firm or shareholders, as well as by members of the Board.

20



All candidates are evaluated based on the qualification standards discussed above and the current and future needs of the Board.

Shareholder nominations must be accompanied by a candidate resume which addresses the extent to which the nominee meets the director qualification standards and any additional search criteria posted on our website. Nominations will be considered only if we are then seeking to fill an open director position. All nominations by shareholders should be submitted as follows:

Chair, Nominating, Corporate Governance and Public Policy Committee
c/o Mr. Keith J. Nelsen
Executive Vice President, General Counsel, Chief Risk Officer and Secretary
Best Buy Co., Inc.
7601 Penn Avenue South
Richfield, Minnesota 55423

Voting Information

You may vote for all, some or none of the nominees for election to the Board. However, you may not vote for more individuals than the number nominated. Each of the nominees has agreed to continue serving as a director if elected. However, if any nominee becomes unwilling or unable to serve and the Board elects to fill the vacancy, the Proxy Agents named in the proxy will vote for an alternative person nominated by the Board. Our Amended and Restated Articles of Incorporation prohibit cumulative voting, which means you can vote only once for any nominee. The affirmative vote of a majority of the votes cast with respect to the director is required to elect each director nominee.

PROXY CARDS THAT ARE PROPERLY SIGNED AND RETURNED WILL BE VOTED FOR THE ELECTION OF ALL OF THE NOMINEES UNLESS OTHERWISE SPECIFIED.

Board Voting Recommendation

The Board recommends that shareholders vote FOR the election of Bradbury H. Anderson, Sanjay Khosla, Allen U. Lenzmeier and Hatim A. Tyabji as Class 2 directors, and the ratification of Russell P. Fradin and Hubert Joly as Class 1 directors. If elected, each Class 2 director will hold office until the election of directors at our 2015 Regular Meeting of Shareholders and until his or her successor has been duly elected and qualified, or until his or her earlier death, resignation or removal. If ratified, each Class 1 director will hold office until the election of directors at our 2014 Regular Meeting of Shareholders and until his or her successor has been duly elected and qualified, or until his or her earlier death, resignation or removal. If our shareholders approve the management proposal discussed in Item 4 of this proxy statement, all directors will stand for re-election for a one-year term, to be re-elected on an annual basis beginning with the Class 1 directors up for election at the 2014 Regular Meeting of Shareholders.

All of the nominees are currently members of the Board.


21



Nominees and Directors

The biographies of each of the nominees and continuing directors below includes information regarding the person's service as a director, business experience, public company director positions held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings during the last ten years if any, and the experiences, qualifications, attributes or skills that caused the Nominating Committee and the Board to determine that the person should serve as a director.

There are no family relationships among the nominees or between any nominee and any director, executive officer or person chosen to become an executive officer. There are also no material proceedings to which any director, officer, affiliate of the Company, any 5% shareholder or any associate is a party adverse to the Company or its subsidiaries or has a material interest adverse to the Company or its subsidiaries.

On March 25, 2013, we announced the appointment of Bradbury H. Anderson and Allen U. Lenzmeier as directors to our Board. Mr. Anderson and Mr. Lenzmeier were nominated by Richard M. Schulze, our founder and beneficial owner of approximately 20% of the Company. Pursuant to an agreement entered into between the Company and Mr. Schulze, Mr. Schulze is entitled to nominate two directors for appointment to our Board until he reaches the age of 75. In the event either of Mr. Schulze's nominated directors resigns from the Board or are forced to leave the Board due to death, disability or serious illness, or are not elected at the applicable meeting of shareholders by the requisite percentage of shareholders for approval, Mr. Schulze will have the right to designate their successor, subject to the satisfaction of the Company’s director qualification standards and the Board’s approval, which shall not be unreasonably withheld. For more information regarding our agreement with Mr. Schulze, please see the Certain Relationships and Related Party Transactions section of this proxy statement, as well as the Current Reports on Form 8-K filed by the Company on August 26, 2012, December 14, 2012 and March 25, 2013.

22



Class 2 Director Nominees:
(Ages and Committee roles as of April 22, 2013)
Bradbury H. Anderson
Best Buy Committees:
Public Directorships:
Age: 63
 
l
Finance and Investment Policy Committee
 
l
General Mills, Inc.
Director Since:
 
 
 
l
Waste Management, Inc.
March 2013
 
 
 
Private Directorships:
 
 
 
 
 
l
Carlson Inc.
 
 
l
Lighthaus Logic
 
 
 
 
 
l
American Film Institute
 
 
 
 
 
l
Minnesota Public Radio / American Public Media
Mr. Anderson rejoined our Board as a director in 2013 after retiring in June 2010. Prior to his retirement in 2010, he had been a director since August 1986 and was our Vice Chairman. He also served as our Chief Executive Officer from June 2002 until June 2009, having previously served as President and Chief Operating Officer since April 1991. He was employed in various capacities with us since 1973. Following his retirement as CEO, Mr. Anderson was employed with us as a consultant to our then-current CEO until November 1, 2010.

In addition to his public and private directorships, Mr. Anderson is also a trustee of the Mayo Clinic in Rochester, Minnesota. He previously served on the boards of the Retail Industry Leaders Association, Junior Achievement, the Minnesota Early Learning Foundation, the Best Buy Children's Foundation and Waldorf College.

Mr. Anderson's longevity with the Company gives him substantial knowledge of our unique company culture and valuable perspective as the former CEO of a Fortune 100 company with global operations. Through both his years with us and his board memberships on other organizations, Mr. Anderson brings to the Board decades of experience in retail, branding, transformation and entrepreneurship.

Sanjay Khosla
Best Buy Committees:
Private Directorships:
Age: 61
 
l
Finance and Investment Policy Committee
 
l
NIIT Ltd.
Director Since:
 
 
l
Goodman Theatre (Chicago, IL)
October 2008
 
l
Nominating, Corporate Governance & Public Policy Committee
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mr. Khosla retired in March 2013 as president of developing markets of Mondelēz International (a company comprised of global snacking and food brands formerly of Kraft Foods, Inc.), for which he served since October 2012. Prior to that, he served as executive vice president and president of developing markets at Kraft Foods, Inc. (an international food and beverage company), a position he held since January 2007.

From 2004 to 2006, Mr. Khosla was with Fonterra Co-operative Group Ltd. (a multi-national dairy company based in New Zealand), where he served as managing director of its consumer and food service business. Before joining Fonterra in 2004, he had a 27-year career with Unilever PLC in India, the U.K. and Europe, culminating as senior vice president, global beverages, and chairman of Unilever's beverages category.

Mr. Khosla's many years in the consumer products industry provide him with an extensive background in consumer marketing, branding, global expansion and multi-national operations. His background in these areas, along with his history of transformational leadership, is valuable as the Board focuses on the Company's transformation.



23



Allen U. Lenzmeier
Best Buy Committees:
Private Directorships:
Age: 69
 
l
Audit Committee
 
l
American Telecare, Inc.
Director Since:
 
l
Finance and Investment Policy Committee
 
l
Envoy Medical Corporation
March 2013
 
 
 
l
Boys & Girls Clubs of America, Twin Cities Chapter
 
 
 
 
 
 
 
 
l
Minnesota Orchestra Association
Mr. Lenzmeier rejoined our Board as a director in March 2013 after retiring in June 2010. Prior to his retirement in 2010, he was a director since February 2001. Mr. Lenzmeier retired in February 2009 from the position of Vice Chairman, having served on a part-time basis to support our international expansion.

Prior to his promotion to Vice Chairman in 2004, he served in various capacities since joining us in 1984. His prior positions include President and Chief Operating Officer from 2002 to 2004, and President of Best Buy Retail Stores from 2001 to 2002. In addition to his private directorships, Mr. Lenzmeier also serves as a trustee for the Pacer organization. He previously served on the board of UTStarcom, Inc., a network solution company.

Through his lengthy service with our company, and his experience on the boards of other organizations, Mr. Lenzmeier brings to the Board a commitment to company culture, telecommunications knowledge, financial acumen, entrepreneurial spirit and significant international expansion experience.

Hatim A. Tyabji
Best Buy Committees:
Private Directorships:
Age: 68
 
l
Audit Committee (Chair)
 
l
Jasper Wireless (Chairman)
Director Since:
 
 
 
 
l
Touch Networks (Australia)
April 1998
 
 
 
l
Missile Defense Advocacy Alliance
(Appointed Chairman June 2012)
 
 
 
 
 
 
 
 
 
 
Mr. Tyabji retired in July 2012 from his position as executive chairman of Bytemobile, Inc. (a wireless Internet infrastructure provider), a role he held since July 2001. From 1998 to 2000, he served as chairman and chief executive officer of Saraïde, Inc. (a provider of Internet and wireless data services); and from 1986 to 1998, as president and chief executive officer (and as chairman from 1992 until 1998) of VeriFone, Inc. (a global transaction automation enterprise).

He previously served on the boards of Ariba Inc.; Bank of America Merchant Services; Datacard Group (Chairman); Deluxe Corporation; Depotpoint, Inc.; eFunds Corporation; Impresse Corporation; Merchant eSolutions, Inc.; Norand Corporation; Novatel Wireless, Inc.; PubliCard Inc.; Sierra Atlantic, Inc.; and SmartDisk Corporation, as well as on the boards of the Carnegie Institute, the Dean's Council of the Leavey School of Business at Santa Clara University and the Dean's Council of the School of Engineering at the State University of New York at Buffalo. In 2007, Mr. Tyabji published "Husband, Wife & Company: An Honest Perspective on Success in Life and Work," a book on the interrelationships between family and career.

Mr. Tyabji brings a wealth of experience in broadband and wireless technologies and is a significant contributor to the development of our technological growth and connected world strategy. His financial acumen and background as an entrepreneurial business leader are valuable assets to the Board.


24



Nominees for Ratification as Class 1 Directors - Terms expire in 2014

Russell P. Fradin
Best Buy Committees:
Private Directorships:
Age: 57
 
l
Compensation & Human Resources Committee
 
l
SunGard Data Systems Inc.
Director Since:
 
 
 
l
SunGard Capital Corp.
April 2013
 
 
 
l
SunGard Capital Corp. II
 
 
 
 
 
l
SunGard Holding Corp.
 
 
 
 
l
SunGard Holdco LLC
Mr. Fradin has served since May 2011 as chief executive officer, president and a board member of SunGard, a leading software and technology services company serving approximately 25,000 customers in over 70 countries.

From September 2010 until May 2011, Mr. Fradin was chairman and chief executive officer of AonHewitt, a global provider of human resources consulting and outsourcing solutions and a business unit of Aon Corporation. Mr. Fradin served as chief executive officer of Hewitt Associates from 2006 and oversaw its successful merger with Aon Corporation in September 2010. Prior to his time with Hewitt, he was president and chief executive officer from 2004 to 2006 of The BISYS Group, Inc., a provider of outsourcing solutions for the financial services sector, and from 1997 until 2004, Mr. Fradin held various senior executive positions with Automatic Data Processing, Inc., a provider of benefits and payroll processing services. In addition, he worked many years as a management consultant at McKinsey & Company, where he was a senior partner. He previously served from 2007 until July 2011 on the board of Gartner Inc., a technology research firm.

Mr. Fradin brings a wealth of experience to Best Buy. His background in operations, streamlining cost structures, executive compensation and strategic consulting will be valuable to the Company as we continue our Renew Blue transformation.

Hubert Joly
 
Public Directorships:
Age: 53
 
 
 
 
l
Ralph Lauren Corporation
Director Since:
 
 
 
Private Directorships:
September 2012
 
 
 
 
l
Retail Industry Leaders Association Board of Directors
 
 
 
 
 
l
Carlson School of Management Board of Overseers
 
 
 
 
 
l
Minneapolis Institute of Arts Board of Trustees
 
 
 
 
 
l
Minnesota Business Partnership Executive Committee
Mr. Joly was appointed President, Chief Executive Officer and a Director in September 2012. Mr. Joly was previously the president and chief executive officer of Carlson, Inc., a worldwide hospitality and travel company based in Minneapolis, Minnesota, from 2008 until his current appointment.

Prior to becoming chief executive officer of Carlson, Mr. Joly was president and chief executive officer of Carlson Wagonlit Travel from 2004 until 2008 and held several senior executive positions with Vivendi S.A. and its subsidiaries from 1999 to 2004 and with Electronic Data Systems (now part of Hewlett-Packard Company) from 1996 to 1999. Mr. Joly was with McKinsey & Company, Inc. from 1983 to 1996, working with clients in the technology, financial services and luxury industries. Mr. Joly previously served as a member of the board of directors of Carlson, Inc.; chair of the board of directors of the Rezidor Hotel Group; chair of the board of directors of Carlson Wagonlit Travel; chair of the Travel Facilitation Sub-Committee of the U.S. Department of Commerce Travel and Tourism Advisory Board; and on the executive committee of the World Travel and Tourism Council.

Mr. Joly brings to the Company expertise as a global CEO with turnaround and growth experience across the media, technology and service sectors.


25



Class 1 Directors:
(Ages and Committee roles as of April 22, 2013)
Lisa M. Caputo
Best Buy Committees:
Private Directorships:
Age:  49
 
l
Compensation & Human Resources Committee
 
l
J. William Fulbright Foreign Scholarship Board
Director Since:
 
l
Nominating, Corporate Governance & Public Policy Committee
 
l
New Visions for Public Schools
December 2009
 
 
 
l
The Creative Coalition
 
 
 
 
 
l
The Sesame Workshop
 
 
 
 
 
l
WNET Channel 13
Ms. Caputo has served since June 2011 as executive vice president, marketing and communications of The Travelers Companies, Inc. (a property casualty insurer). She previously served as managing director and senior banker of the Public Sector Group of Citigroup, Inc.'s (“Citi”) Institutional Clients group (a financial services company) from 2010 to May 2011. Ms. Caputo founded Citi's Women & Co. (a membership service that provides financial education and services for women) in 2000, and served as its chief executive officer and chairman from 2000 to 2010. She served as global chief marketing officer and executive vice president of Citi overseeing global marketing, public affairs and community relations for the company from 2007 to 2010, and as chief marketing and community relations officer of Citi's Global Consumer Group from 2005 to 2007. Ms. Caputo acted as senior managing director of business operations and planning of Citi's Global Consumer Group and also served as chief of staff to Citi's Global Consumer Group's chief executive officer from 2003 to 2005.

Prior to her time at Citi, Ms. Caputo served as vice president, global communications and synergy for Disney Publishing Worldwide (a publisher of children's books and magazines) from 1998 through 1999. From 1996 to 1998, she was vice president of corporate communications for CBS Corporation (a mass media company). From 1992 to 1996, Ms. Caputo served in President Bill Clinton's administration, both as press secretary for First Lady Hillary Rodham Clinton, and as deputy assistant to the President. In addition to her private directorships, Ms. Caputo also serves on several private advisory boards and committees.

With her broad background with various for-profit companies and non-profit organizations, Ms. Caputo brings to the Board extensive marketing expertise, global and corporate communications experience and political savvy. She is also a highly respected, well-connected leader and is credited for her comprehensive approach, intelligence and tenacity.

Kathy J. Higgins Victor
Best Buy Committees:
Private Directorships:
Age: 56
 
l
Compensation & Human Resources Committee
 
l
University of St. Thomas Board of Trustees
Director Since:
 
 
 
 
November 1999
 
l
Nominating, Corporate Governance & Public Policy Committee (Chair)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ms. Higgins Victor has served since 1994 as president and founder of Centera Corporation (an executive development and leadership coaching firm located in Minneapolis, Minnesota).

From 1991 to 1994, she was senior vice president of human resources at Northwest Airlines, Inc., now Delta Air Lines (a commercial airline). Prior to that, Ms. Higgins Victor held senior executive positions at The Pillsbury Company, subsequently acquired by General Mills, Inc. (a producer of grain and other foodstuffs), and Burger King Corporation (operator and franchisor of restaurants worldwide).

Ms. Higgins Victor's roles with these highly branded public companies give her extensive experience in the areas of established company cultures, executive compensation and human resources. Through her professional background, Ms. Higgins Victor brings to the Board large company leadership expertise, a dedication to continuous improvement and entrepreneurial experience. In addition, her experience in executive development, succession planning and leadership coaching continues to be a valuable asset to the Board, particularly in her role as Chairwoman of the Nominating Committee.

26



Gérard R. Vittecoq
Best Buy Committees:
Private Directorships:
Age: 64
 
l
Audit Committee
 
l
Institutional Institute for Management Development Foundation
Director Since:
 
l
Finance & Investment Policy Committee (Chair)
 
 
September 2008
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mr. Vittecoq recently announced his intent to retire in May 2013 as a group president and executive office member of Caterpillar, Inc. (a manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines), a position he held since 2004. He was responsible for the company's Energy and Power Systems Group, which includes its Industrial Power Systems & Growth Markets division, Large Power Systems and Growth Markets division, Marine and Petroleum Power division, Electrical Power division, Progress Rail division/EMD and solar division. He was also responsible for driving enterprise profit and loss accountability for Caterpillar's Europe-Africa-Middle East ("EAME") region. He joined Caterpillar in 1975 and has served in various accounting- and finance-related roles within the company.

From 1987 to 1990, he was in charge of strategy projects and was appointed director of strategy and planning in 1990, where he served until 1995. From 1995 to 1997, he was managing director of Caterpillar France S.A. In 1997, he became managing director of Caterpillar Belgium S.A. He was elected a vice president in January 2001, overseeing the EAME Product Development & Operations division. In addition to his private directorships, he is also a member of the Evian Group: Free Trade Think Tank, the Senior Advisory Council of the Swiss-American Chamber of Commerce and an executive member of the World Business Council for Sustainable Development.

Through Mr. Vittecoq's extensive tenure with Caterpillar, he has gained international management experience, branding knowledge and financial expertise. Mr. Vittecoq's background as an accomplished business leader and his financial acumen, in addition to his political savvy, are valuable assets to the Board as it focuses on our transformation in a changing marketplace.



27



SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table provides information about the number of shares of our common stock beneficially owned at February 2, 2013 (unless otherwise indicated), by our current and former CEOs, our current and former Chief Financial Officers, our three other most highly compensated executive officers, and two other most highly compensated former executive officers during the most recent fiscal year. The table provides similar information for each director and director nominee, all directors and executive officers as a group, and each person, including any groups that we know who beneficially owns more than 5% of the outstanding shares of our common stock.
Name and Address(1)
 
Number of Shares
Beneficially Owned

 
 
 
Percent of Shares
Beneficially Owned

Hubert Joly, President, Chief Executive Officer and Director
 
433,650

 
(2
)
 
*

Sharon L. McCollam, Executive Vice President, Chief Administrative Officer and Chief Financial Officer
 
107,614

 
(3
)
 
*

Shari L. Ballard, Executive Vice President and President, International
 
615,338

 
(4
)
 
*

Carol A. Surface, Executive Vice President and Chief Human Resources Officer
 
201,579

 
(5
)
 
*

Keith J. Nelsen, Executive Vice President, General Counsel, Chief Risk Officer and Secretary
 
182,925

 
(6
)
 
*

Hatim A. Tyabji, Chairman of the Board of Directors
 
144,333

 
(7
)
 
*

Bradbury H. Anderson, Director
 
258,382

 
(8
)
 
*

Lisa M. Caputo, Director
 
25,324

 
(9
)
 
*

Russell P. Fradin, Director
 

 
(10
)
 
*

Kathy J. Higgins Victor, Director
 
61,980

 
(11
)
 
*

Ronald James, Director
 
78,532

 
(12
)
 
*

Sanjay Khosla, Director
 
33,380

 
(13
)
 
*

Allen U. Lenzmeier, Director
 
1,008,405

 
(14
)
 
*

Gérard R. Vittecoq, Director
 
34,590

 
(15
)
 
*

Brian J. Dunn, former Chief Executive Officer and Director
 
198,056

 
(16
)
 
*

George L. Mikan III, former interim Chief Executive Officer and Director
 
199,161

 
(17
)
 
*

James L. Muehlbauer, former Executive Vice President, Finance and Chief Financial Officer
 
465,440

 
(18
)
 
*

Stephen Gillett, former Executive Vice President and President, Best Buy Digital and Global Business Services
 
52,837

 
(19
)
 
*

Michael A. Vitelli, former Executive Vice President and President, U.S.
 
347,817

 
(20
)
 
*

All current directors and executive officers, as a group (16 individuals)
 
3,317,512

 
(21
)
 
*

Richard M. Schulze, Founder and Chairman Emeritus 3033 Excelsior Blvd., Suite 525 Minneapolis, MN 55416
 
66,641,674

 
(22
)
 
19.60
%
Fidelity (FMR LLC)
82 Devonshire Street
Boston, MA 02109

 
29,516,761

 
(23
)
 
8.73
%
BlackRock Inc.
40 East 52nd Street
New York, NY 10022

 
27,187,908

 
(24
)
 
8.08
%
*
Less than 1%.

28



(1)
The business address for all current directors and executive officers is 7601 Penn Avenue South, Richfield, Minnesota, 55423. Address information for former executive officers was not available.
(2)
The figure represents: (a) 137,682 outstanding shares owned by Mr. Joly; and (b) 295,968 unvested shares of restricted stock subject to a time-based vesting schedule.
(3)
The figure represents: 107,614 unvested shares of restricted stock subject to a time-based vesting schedule.
(4)
The figure represents: (a) 54,167 outstanding shares owned by Ms. Ballard, of which 33,318 shares have been pledged as collateral to secure a line of credit; (b) 161,867 unvested shares of restricted stock subject to a time-based vesting schedule; (c) 16,473 outstanding shares registered in the name of State Street Bank ("Trustee"), and held by the Trustee in connection with the Best Buy Retirement Savings Plan ("Retirement Savings Plan") for the benefit of Ms. Ballard; and (d) options to purchase 382,831 shares, which she could exercise within 60 days of February 2, 2013.
(5)
The figure represents: (a) 31,445 outstanding shares owned by Ms. Surface; (b) 123,110 unvested shares of restricted stock subject to a time-based vesting schedule; (c) 440 outstanding shares registered in the name of the Trustee, and held by the Trustee in connection with the Retirement Savings Plan for the benefit of Ms. Surface; and (d) options to purchase 46,584 shares, which she could exercise within 60 days of February 2, 2013.
(6)
The figure represents: (a) 13,462 outstanding shares owned by Mr. Nelsen; (b) 87,098 unvested shares of restricted stock subject to a time-based vesting schedule; (c) 806 outstanding shares registered in the name of the Trustee, and held by the Trustee in connection with the Retirement Savings Plan for the benefit of Mr. Nelsen; and (d) options to purchase 81,559 shares, which he could exercise within 60 days of February 2, 2013.
(7)
The figure represents: (a) 81,833 outstanding shares owned by Mr. Tyabji; and (b) options to purchase 62,500 shares, which he could exercise within 60 days of February 2, 2013.
(8)
The figure represents Mr. Anderson's holdings as of March 25, 2013, the date of his appointment to our Board: (a) 37,233 outstanding shares registered in the name of Mr. Anderson and a co-trustee, and held by them as trustees of a trust for the benefit of Mr. Anderson; (b) 121,000 outstanding shares registered in the name of Mr. Anderson's spouse and a co-trustee, and held by them as trustees of a trust for the benefit of Mr. Anderson's spouse (Mr. Anderson has disclaimed beneficial ownership of these shares); (c) 35,494 outstanding shares held in a Grantor Retained Annuity Trust registered in the name of Mr. Anderson's spouse and co-trustees, and held by them as trustees for the benefit of Mr. Anderson's spouse (Mr. Anderson has disclaimed beneficial ownership of these shares); (d) 53,405 outstanding shares owned by the Anderson Family Foundation, of which Mr. Anderson is a director; and (e) options to purchase 11,250 shares, which he could exercise within 60 days of March 25, 2013.
(9)
The figure represents: (a) 12,824 outstanding shares owned by Ms. Caputo; and (b) options to purchase 12,500 shares, which she could exercise within 60 days of February 2, 2013.
(10)
The figure represents Mr. Fradin's holdings as of April 17, 2013, the date of his appointment to our Board.
(11)
The figure represents: (a) 10,730 outstanding shares owned by Ms. Higgins Victor; and (b) options to purchase 51,250 shares, which she could exercise within 60 days of February 2, 2013.
(12)
The figure represents: (a) 16,032 outstanding shares owned by Mr. James; and (b) options to purchase 62,500 shares, which he could exercise within 60 days of February 2, 2013.
(13)
The figure represents: (a) 690 outstanding shares owned by Mr. Khosla; (b) 11,440 outstanding shares registered in the name of Mr. Khosla and a co-trustee, and held by them as trustees of a trust for the benefit of Mr. Khosla; and (c) options to purchase 21,250 shares, which he could exercise within 60 days of February 2, 2013.
(14)
The figure represents Mr. Lenzmeier's holdings as of March 25, 2013, the date of his appointment to our Board: (a) 74,477 outstanding shares held in a Grantor Retained Annuity Trust registered in the name of Mr. Lenzmeier and co-trustees, and held by them as trustees for the benefit of Mr. Lenzmeier; (b) 732,678 outstanding shares registered in the name of Mr. Lenzmeier and a co-trustee, and held by them as trustees of a trust for the benefit of Mr. Lenzmeier and his spouse; and (c) options to purchase 201,250 shares, which he could exercise within 60 days of March 25, 2013.
(15)
The figure represents: (a) 13,340 outstanding shares owned by Mr. Vittecoq; and (b) options to purchase 21,250 shares, which he could exercise within 60 days of February 2, 2013.
(16)
The figure represents: (a) 51,709 outstanding shares owned by Mr. Dunn; (b) 126,407 unvested shares of restricted stock subject to a time-based vesting schedule; and (c) 19,940 outstanding shares held in Mr. Dunn's individual retirement account.
(17)
The figure represents: (a) 174,161 outstanding shares owned by Mr. Mikan; and (b) options to purchase 25,000 shares, which he could exercise within 60 days of February 2, 2013.
(18)
The figure represents: (a) 113,156 outstanding shares owned by Mr. Muehlbauer; (b) 1,514 outstanding shares held in Mr. Muehlbauer's individual retirement account; (c) 992 outstanding shares registered in the name of the Trustee, and held by the Trustee in connection with the Retirement Savings Plan for the benefit of Mr. Muehlbauer; and (d) options to purchase 349,778 shares, which he could exercise within 60 days of February 2, 2013.
(19)
The figure represents 52,837 outstanding shares owned by Mr. Gillett.


29



(20)
The figure represents Mr. Vitelli's holdings as of February 28, 2013: (a) 114,952 outstanding shares owned by Mr. Vitelli; (b) 1,264 outstanding shares registered in the name of the Trustee, and held by the Trustee in connection with the Retirement Savings Plan for the benefit of Mr. Vitelli; and (c) options to purchase 213,601 shares, which he could exercise within 60 days of February 2, 2013.
(21)
The figure represents: (a) outstanding shares and options described in the preceding footnotes (2) thru (15); (b) 17,282 outstanding shares owned by executive officers not named in the table; (c) 33,770  unvested shares of restricted stock, subject to a time-based vesting schedule, owned by executive officers not named in the table; (d) 3,777 outstanding shares registered in the name of the Trustee, and held by the Trustee in connection with the Retirement Savings Plan for the benefit of other executive officers; and (d) options granted to other executive officers to purchase 76,662 shares, which they could exercise within 60 days of February 2, 2013.
(22)
The figure represents Mr. Schulze's holdings as of March 25, 2013, the date of his appointment as our Chairman Emeritus: (a) 1,732,500 outstanding shares owned by Mr. Schulze; (b) 56,380,184 outstanding shares registered in the name of Mr. Schulze and a co-trustee, and held by them as trustees of a trust for the benefit of Mr. Schulze, of which up to $150 million in aggregate value of shares have been pledged by the trust as collateral to secure a line of credit; (c) 3,580,402 outstanding shares registered in the name of Mr. Schulze and co-trustees, and held by them as trustees of Grantor Retained Annuity Trusts for the benefit of Mr. Schulze and his family; (d) 1,143,043 outstanding shares registered in the name of Mr. Schulze and a co-trustee, and held by them as trustees of the Sandra Schulze Grantor Retained Annuity Trust; (e) 950,169 outstanding shares held by a limited partnership of which Mr. Schulze is the sole general partner (Mr. Schulze has disclaimed beneficial ownership of these shares except to the extent of his pecuniary interest therein); (f) 252,312 outstanding shares held by a limited partnership of which a limited liability company owned by Mr. Schulze is the sole general partner; (g) 31,672 outstanding shares held by a limited partnership of which a limited liability company owned by Mr. Schulze is the sole general partner; (h) 39,566 outstanding shares registered in the name of Mr. Schulze and held by him as trustee of trusts for the benefit of the children of Mr. Schulze's spouse (Mr. Schulze has disclaimed beneficial ownership of these shares); (i) 11,758 outstanding shares registered in the name of Mr. Schulze's spouse and co-trustees, and held by them as trustees of trusts for the benefit of Mr. Schulze's spouse (Mr. Schulze has disclaimed beneficial ownership of these shares); (j) 183,726 outstanding shares registered in the name of Mr. Schulze and a co-trustee, and held by them as trustees of the Sandra Schulze Revocable Trust dated June 14, 2001 (Mr. Schulze has disclaimed beneficial ownership of these shares); (k) 2,061 outstanding shares held in Mr. Schulze's individual retirement account; (l) 2,228,419 outstanding shares owned by The Richard M. Schulze Family Foundation, of which Mr. Schulze is the sole director; (m) 75,862 outstanding shares registered in the Trustee in connection with the Retirement Saving Plan for the benefit of Mr. Schulze; and (n) options to purchase 30,000 shares, which he could exercise within 60 days of March 25, 2013.
(23)
As reported on the owner's most recent Schedule 13G filed with the SEC on February 14, 2013. FMR LLC and certain related entities have sole voting power over 6,387,312 shares and sole dispositive power over 29,516,761 shares.
(24)
As reported on the owner's most recent Schedule 13G filed with the SEC on January 30, 2013. Blackrock, Inc. has sole voting dispositive power over 27,187,908 shares.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires that our directors, executive officers and shareholders who beneficially own more than 10% of our common stock file initial reports of ownership with the SEC. They must also file reports of changes in ownership with the SEC. In addition, they are required by SEC regulations to provide us copies of all Section 16(a) reports that they file with the SEC. Based solely on a review of such Section 16(a) reports, management and the Board believe our directors, executive officers and shareholders who beneficially own more than 10% of our common stock complied with the Section 16(a) filing requirements during the fiscal year ended February 2, 2013, except that due to administrative delay one report was not filed in a timely manner with respect to one transaction involving a purchase of shares on October 26, 2009, by director Gerard R. Vittecoq.


30



CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

We have a written Related Party Transactions Policy that generally prohibits our participation in material related party transactions with officers, directors, controlling persons and other insiders unless the transaction provides us with a demonstrable incremental benefit and the terms are competitive with terms available from unaffiliated third parties.

Pursuant to our Related Party Transactions Policy, if a related party transaction (as defined by SEC rules and the policy) involving an amount greater than $120,000 is proposed, members of the Audit Committee who have no financial interest in the transaction review the transaction to determine whether the necessary incremental benefit is present and whether the transaction should be recommended to the Board for approval. Members of the Board who have no financial interest in the transaction then review and, if appropriate, approve the transaction. In addition, ongoing related party transactions are reviewed annually by the Audit Committee and the Board to ensure that such transactions continue to provide the necessary incremental benefit to us and have competitive terms. Each of the transactions discussed below were approved by the Audit Committee and the Board in January 2013, unless otherwise noted, in accordance with our Related Party Transactions Policy.

We do not have any credit arrangements between our officers, directors, controlling persons and other insiders.

Allen U. Lenzmeier

Jessica Zou, Mr. Lenzmeier's daughter-in-law, is employed with us as a Property Manager at our corporate headquarters in Minneapolis, Minnesota. Ms. Zou's base salary for fiscal 2013 was approximately $96,000, and she was eligible for a short-term incentive award, payable in cash, expressed as 15% of her base salary. She also received a recognition award during fiscal 2013. Ms. Zou's total cash compensation for fiscal 2013 was $132,000. Ms. Zou's employment with us began in May 2003. Mr. Lenzmeier's family member is compensated at a level comparable to the compensation paid to non-family members in similar positions at Best Buy. This relationship was reviewed and ratified by the Audit Committee and the Board in April 2013.

Richard M. Schulze

On March 25, 2013, we entered into a letter agreement with Mr. Schulze pursuant to which, among other things, Mr. Schulze has been named Chairman Emeritus of the Company, with the lifetime honorary title of “Founder and Chairman Emeritus”. Under this letter agreement, we have agreed to compensate Mr. Schulze in an amount not to exceed $2.125 million in connection with his preparation and ongoing consultation over the next twelve months with regard to a business plan for Best Buy. We have agreed to pay this sum in quarterly installments beginning on the three month anniversary of the signing of the letter agreement. In addition, we have agreed to compensate Mr. Schulze an annual base salary of $150,000, and to provide lifetime medical benefits for him, his spouse and his eligible dependents in accordance with our plans, practices, programs and policies in effect generally for our executives and their dependents. We have also agreed to provide office space and administrative support, and to reimburse Mr. Schulze for his costs and out of pocket expenses incurred in the performance of his duties as Chairman Emeritus. Mr. Schulze is also entitled, under the letter agreement, to nominate two directors for appointment to the Board of Directors. Messrs. Anderson and Lenzmeier have been elected to the Board and have been nominated for election for two-year terms to the Board at the Meeting. The letter agreement has an initial term which will last until Mr. Schulze reaches the age of 75, except as specifically described above.

We leased two of our U.S. Best Buy stores from Mr. Schulze. During fiscal 2013, we paid aggregate rents of approximately $808,000 for the two stores leased from Mr. Schulze. Both leases include escalation clauses. Depending upon our exercise of successive renewal options, the leases run through 2021 and 2018, respectively. We closed both stores in May 2012; however, we continue to pay rent for both locations. We are looking into options for use of the space or subtenancy to mitigate our costs. We entered into both real estate leases with Mr. Schulze prior to 1990, and the Board approved the leases (with Mr. Schulze not voting). The Board relied on one or more of its members who had no financial interest in the properties to review market comparisons, look into alternative rental agreements and negotiate with Mr. Schulze. The Board determined that these real estate leases were in our best interest and had terms that are competitive with terms available from unaffiliated third parties.

During the first half of fiscal 2013, we also chartered aircraft services, on a non-exclusive basis, from entities owned by the Richard M. Schulze Revocable Trust, under the trust agreement dated June 14, 2001, as amended and restated, of which Mr. Schulze is a trustee. We used such airplanes pursuant to a block charter agreement. Annually, the Board reviewed the arrangements for these airplanes to ensure that the terms are competitive with terms available from unaffiliated third parties. We paid an hourly rate for use of the airplanes, without any required fractional ownership. Our senior management generally used the airplanes when it was more economical or practical than flying commercial airlines. The total amount paid to


31



Mr. Schulze's entities for use of the airplanes during fiscal 2013 was approximately $571,000. The relationship with Mr. Schulze's entities for use of the airplanes was terminated in fiscal 2013, and the Board has no plans to reinstate the agreement.

We purchase certain store fixtures from Phoenix Fixtures, Inc. ("Phoenix"), a company owned by Mr. Schulze's brother, Robert Schulze. Fixture contracts are submitted through a competitive bidding process in which Phoenix is free to participate. Payments made to Phoenix are pursuant to contracts awarded following the competitive bidding process. In light of Mr. Schulze's relationship with Phoenix, the Board reviewed our transactions with Phoenix and determined that the transactions were on fair terms to us and that Phoenix provides advantages with respect to service and delivery as compared with its competitors. Accordingly, the Board approved the transactions and our continued business dealings with Phoenix. The total amount paid to Phoenix during fiscal 2013 was approximately $7.5 million USD and $387,000 CAD. All transactions with Phoenix during fiscal 2013 were subject to the competitive bidding process discussed above to ensure fair prices and terms.

Susan S. Hoff, Mr. Schulze's daughter, is Founder, Chairperson and Chief Executive Officer of The Best Buy Children's Foundation, for which she has served as principal executive officer since the inception of the foundation. As part of this role, Ms. Hoff serves as a Vice President of the Company. Ms. Hoff's base salary for fiscal 2013 was $252,000 and she was eligible for a short-term incentive award, payable in cash, with a target payout of 45% of her base salary. During fiscal 2013, Ms. Hoff received $348,966 in total cash compensation. Also during fiscal 2013, Ms. Hoff was awarded options to purchase 1,000 shares of Best Buy common stock at an exercise price of $22.06 per share, options to purchase 1,330 shares of Best Buy common stock at an exercise price of $20.31 per share, options to purchase 1,330 shares of Best Buy common stock at an exercise price of $17.94 per share, and options to purchase 1,330 shares of Best Buy common stock at an exercise price of $14.67 per share. The stock options expire in April 2022, June 2022, September 2022 and January 2023, respectively, and vest ratably over three years. Consistent with other officers of the Company, Ms. Hoff also received a quarterly time-based restricted stock grant of 334 shares, and an annual performance-based restricted stock grant of 1,334 shares. Each time-based restricted stock and stock option grant vests in one-third increments on each anniversary of the grant for three years. The performance share grant vests only if certain performance criteria is met following the performance period.

Fidelity

FMR LLC ("Fidelity") filed an amended Schedule 13G in February 2013, stating that it holds 8.731% of the Company's common stock. As a result of beneficially owning more than 5% of our common stock, Fidelity is currently considered a “related party” under our Related Party Transactions Policy. After conducting a review of any relationships between Fidelity and its subsidiaries and the Company and its subsidiaries, we determined that certain affiliates of Fidelity provide services to us in connection with the record keeping and administration of our stock plans (including the Employee Stock Purchase Plan and the Long-Term Incentive Plan). We paid these entities approximately $574,000 for these services for fiscal 2013. The administrative services contracts were initially entered into prior to Fidelity's Schedule 13G filing and 5% holder status. The contracts were negotiated at arms length and there is no indication that the Company or Fidelity received preferential treatment as a result of the relationship. This relationship was reviewed and ratified by the Audit Committee and the Board of Directors in January 2013.

BlackRock

BlackRock, Inc. ("BlackRock") filed a Schedule 13G in February 2013, stating that it holds 8.08% of the Company's common stock. As a result of beneficially owning more than 5% of our common stock, BlackRock is currently considered a “related party” under our Related Party Transactions Policy. After conducting a review of any relationships between BlackRock and its subsidiaries and the Company and its subsidiaries, we determined that up until August 2012 the Company invested its short-term cash overnight in money market funds managed by BlackRock Institutional Management Corporation, an affiliate of BlackRock. In accordance with the terms of the management agreement with BlackRock, we received net interest payments of approximately $65,000 during fiscal 2013, primarily driven by low interest rates in the market; BlackRock retained approximately $80,000 in flat rate management fees from our gross interest yield. Our investment in the BlackRock-managed funds averaged approximately $43 million, with a maximum amount invested at approximately $175 million. The initial decision to invest in BlackRock's money market funds was made prior to its 5% holder status. There is no indication that Best Buy or BlackRock received preferential treatment as a result of the relationship, and we believe that the terms of our management agreement with BlackRock Institutional Management Corporation was consistent with that of other investors. This relationship was reviewed and ratified by the Audit Committee and the Board of Directors in April 2013.



32



AUDIT COMMITTEE REPORT

The information contained in this Audit Committee Report shall not be deemed to be "soliciting material" or "filed" or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

The Audit Committee is currently comprised of three members and acts under a written charter adopted and approved by the Board. The Audit Committee's charter is posted on our website at www.investors.bestbuy.com — select the "Corporate Governance" link. All members of the Audit Committee meet the SEC and NYSE definitions of independence and financial literacy for audit committee members. In addition, the Board has determined that two of the three current members of the Audit Committee are "audit committee financial experts" for purposes of SEC rules. No member of the Audit Committee serves on the audit committee of more than three public companies.

During fiscal 2013, Mr. Mikan resigned from the Audit Committee, effective April 10, 2012, to serve as our interim CEO. Upon completion of his service as interim CEO, he was appointed the Chair of the Audit Committee, effective September 11, 2012. He served as Chair of the Audit Committee until his resignation from the Board on December 26, 2012. Mr. Tyabji was re-appointed and is currently serving as the Chair of the Audit Committee. Mr. Lenzmeier was appointed and currently serves as a member of the Audit Committee, effective April 17, 2013. As previously announced, Mr. Paull has retired from the Board, effective on April 17, 2013 following the Board and committee meetings on April 16-17, 2013.

Committee Meetings

The Audit Committee met 11 times, including seven times via conference call, during fiscal 2013. The Audit Committee schedules its meetings to ensure it has sufficient time to devote appropriate attention to all of its tasks. The Audit Committee meetings include regular executive sessions with our independent registered public accounting firm, Deloitte & Touche LLP ("D&T"), our internal auditors and management. The Audit Committee also discusses with our internal auditors and D&T the overall scope and plans for their respective audits.

Recommendation Regarding Financial Statements

The Audit Committee, on behalf of the Board, reviewed and discussed with both management and D&T our annual audited consolidated financial statements for the transition year ended February 2, 2013, and our quarterly operating results for each quarter in such fiscal year, along with the related significant accounting and disclosure issues. These reviews included discussions with D&T of matters required to be discussed pursuant to Statement on Auditing Standards No. 61, The Auditor's Communication With Audit Committees, and discussions with management about the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of the disclosures in the consolidated financial statements.

The Audit Committee reviewed and discussed with D&T its independence from us and our management. As part of that review, the Audit Committee received from D&T the written disclosures and the letter required by applicable rules of the Public Company Accounting Oversight Board regarding the independent accountant's communications with audit committees concerning independence. In addition, the Audit Committee reviewed all services provided by and the amount of fees paid to D&T in fiscal 2013. In reliance on the reviews and discussions with management and D&T, the Audit Committee believes that the services provided by D&T were compatible with, and did not impair, its independence.

Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board, and the Board approved, that our annual audited consolidated financial statements be included in our Transition Report on Form 10-K for the period ended February 2, 2013, as filed with the SEC.

Pre-Approval Policy

Consistent with SEC rules regarding auditor independence, the Audit Committee has responsibility for appointing, setting fees for and overseeing the work of our independent registered public accounting firm. In recognition of this responsibility and in accordance with the Securities Exchange Act of 1934, it is the policy of the Audit Committee to pre-approve all permissible services provided by our independent registered public accounting firm except for minor audit-related engagements which in the aggregate do not exceed 5% of the fees we pay to our independent registered public accounting firm during a fiscal year.



33



Each year, prior to engaging our independent registered public accounting firm, management submits to the Audit Committee for approval a list of services expected to be provided during that fiscal year within each of the three categories of services described below, as well as related estimated fees, which are generally based on time and materials.

Audit services include audit work performed on the financial statements, as well as work that generally only the independent registered public accounting firm can reasonably be expected to provide, including comfort letters and discussions surrounding the proper application of financial accounting and/or reporting standards.

Audit-related services include assurance and related services that are traditionally performed by the independent registered public accounting firm, including due diligence related to mergers and acquisitions, statutory audits, employee benefit plan audits and special procedures required to meet certain regulatory requirements.

Tax services include compliance and other non-advisory services performed by the independent registered public accounting firm when it is most efficient and effective to use such firm as the tax service provider.

As appropriate, the Audit Committee then pre-approves the services and the related estimated fees. The Audit Committee requires our independent registered public accounting firm and management to report actual fees versus the estimate periodically throughout the year by category of service. During the year, circumstances may arise when it becomes necessary to engage our independent registered public accounting firm for additional services not contemplated in the initial annual proposal. In those instances, the Audit Committee pre-approves the additional services and related fees before engaging our independent registered public accounting firm to provide the additional services.

AUDIT COMMITTEE

Hatim A. Tyabji (Chair)
Allen U. Lenzmeier
Gérard R. Vittecoq


34



ITEM OF BUSINESS NO. 2 — RATIFICATION OF APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

THIS SECTION SHOULD BE READ IN CONJUNCTION WITH THE "AUDIT COMMITTEE REPORT".

The Audit Committee appointed Deloitte & Touche LLP ("D&T") as our independent registered public accounting firm for the fiscal year ending February 1, 2014. We will ask shareholders to ratify the appointment of D&T as our independent registered public accounting firm at the Meeting. Representatives of D&T are expected to be present at the Meeting. They will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.

Principal Accountant Services and Fees

For the fiscal years ended February 2, 2013, and March 3, 2012, D&T served as our independent registered public accounting firm. The following table presents the aggregate fees incurred for services rendered by D&T during fiscal 2013 and fiscal 2012, respectively. The fees listed below were pre-approved by our Audit Committee pursuant to the Audit Committee's pre-approval policy as described in the Audit Committee Report:
Service Type
 
Fiscal 2013

 
Fiscal 2012

Audit Fees(1)
 
$
3,826,000

 
$
4,285,000

Audit-Related Fees(2)
 
2,460,000

 
2,910,000

Tax Fees(3)
 
570,000

 
825,000

All Other Fees
 

 

Total Fees
 
$
6,856,000

 
$
8,020,000


(1)
Consists of fees for professional services rendered in connection with the audits of our consolidated financial statements and the effectiveness of our internal control over financial reporting for the fiscal years ended February 2, 2013, and March 3, 2012; the reviews of the consolidated financial statements included in each of our Quarterly Reports on Form 10-Q during those fiscal years; consultations on accounting matters; and SEC registration statements.

(2)
Consists primarily of fees for statutory audit filings, as well as the audits of our retirement savings plans and foundations. Includes fees of $1,477,000 and $1,899,000 incurred for fiscal 2013 and fiscal 2012, respectively, for statutory audits of Best Buy Europe, in which we have a 50% controlling interest.

(3)
Consists primarily of tax compliance services based on time and materials.

It is our policy that our independent registered public accounting firm be engaged to provide primarily audit and audit-related services. However, pursuant to the policy, in certain circumstances and using stringent standards in its evaluation, the Audit Committee may authorize our independent registered public accounting firm to provide tax services when it determines that D&T is the most efficient and effective tax service provider.

Board Voting Recommendation

The Board recommends that shareholders vote FOR the proposal to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending February 1, 2014.

The affirmative vote of a majority of the voting power of the shares present and entitled to vote of the Meeting is required to ratify Deloitte & Touche LLP as our independent registered accounting firm.

Although ratification is not required pursuant to our By-laws or otherwise, the Board is submitting the selection of Deloitte & Touche LLP to our shareholders for ratification because we value our shareholders' views on the Company's independent registered public accounting firm. If the appointment of Deloitte & Touche LLP were not to be ratified by the shareholders, the Audit Committee would not be required to appoint another independent registered public accounting firm, but would give consideration to an unfavorable vote. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our shareholders.


35



EXECUTIVE AND DIRECTOR COMPENSATION

Introduction

As discussed in the Chairman's Letter to Shareholders, provided to you with this proxy statement, the Company faced a year filled with significant, unusual and highly publicized challenges. In that context, the Board made a number of compensation-related decisions that fall into two categories: 1) decisions to deal with the crisis and 2) decisions to drive Company performance going forward.

Consideration of Last Year's “Say on Pay” Vote

It is well known that at our Regular Meeting of Shareholders in June 2012, the majority of our shareholders voted against our “Say on Pay” proposal. This was in sharp contrast to the prior year:

"Say on Pay" Vote Results
June 2012 Vote
June 2011 Vote
For
Against
For
Against
38%
62%
97%
3%

In response to these voting results, the Company engaged in direct dialogue with its shareholders, including its top ten institutional shareholders, to determine the basis of this negative "Say on Pay" vote. According to this shareholder feedback, the failed vote was principally due to the separation package paid to the former CEO, Brian J. Dunn, after the end of fiscal 2012 but before the 2012 Regular Meeting of Shareholders. In particular, shareholders felt the package paid failed to reflect the Company's previously articulated compensation rationales and its pay-for-performance principles.

As discussed in greater detail below, we took this feedback seriously in shaping our subsequent compensation deliberations. These included direct actions impacting our fiscal 2013 compensation. As other named executive officers ("NEOs") left the Company, either voluntarily or involuntarily, the Compensation Committee ensured that severance benefits were limited to our disclosed severance benefits and legal obligations and that all clawback rights and compensation forfeitures were enforced. The Compensation Committee also chose to enhance the performance linkage with executive compensation by introducing one-third performance share component to all officer long-term incentive programs. Consistent with this approach, the Compensation Committee also ensured that 80-90% of the compensation paid to the new CEO and chief financial officer was performance-based.

Decisions Made to Address the Crisis

The following summarizes the timing and cost of NEO transitions and comprises the decisions that were made in the context of the tumult Best Buy faced last year.
Upon his termination as CEO in April 2012, the Board negotiated a separation agreement with Mr. Dunn. This agreement included continued vesting in certain equity awards and a cash severance payment in exchange for extended non-compete, non-solicitation and non-disparagement protections. The agreement with Mr. Dunn was made during the early part of fiscal 2013, but prior to our 2012 Regular Meeting of Shareholders. Feedback from

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shareholders made clear the frustration many felt with the fact that the Company paid Mr. Dunn above and beyond what it was contractually obligated to do. Further, there was clearly concern that the severance compensation did not reflect Mr. Dunn's previous business performance during his tenure as CEO. This feedback included the “no” vote on last year's “Say on Pay” proposal, as discussed above. We want to reiterate that the Board clearly heard this feedback and has taken it into account in its ongoing NEO compensation decisions, including those made later in fiscal 2013.

George L. Mikan III was appointed interim CEO while a search for a permanent CEO was conducted. Due to the brief and uncertain nature of his appointment, the Compensation Committee approved a compensation package that consisted primarily of a cash stipend and a pro-rated annual stock award. This temporary pay arrangement was designed to incent Mr. Mikan to make objective decisions consistent with the long-term interests of the enterprise, during his short tenure in the role.

During this same period, the Compensation Committee, at the behest of the Company, determined that any unplanned departures of senior leaders during the interim period could further deepen the degree of difficulty the Company was facing. This circumstance was exacerbated by the fact that an interim CEO would have had a difficult time attracting external senior talent in the event an unplanned executive vacancy needed to be filled. To prevent any unplanned departures and minimize the disruption created by future leadership changes, the Compensation Committee approved Continuity Awards that would offer a mix of cash and stock to the senior leadership team in exchange for their continued, resolute support of the business transformation. The premise for these awards was straightforward: at a time of extreme uncertainty, with no permanent CEO, a founder exploring options to take the Company private, a declining business and steeply receding stock price, the company faced a real risk of losing top executives at the worst possible time. The Continuity Awards successfully facilitated the retention of key executives and the rational and non-disruptive departure process for Messrs. Muehlbauer and Vitelli, following the appointment of Mr. Joly as our new CEO.

Decisions to Drive Future Performance

As has been stated previously, the Board focused on addressing two distinct issues: those that were necessary to solve the crisis it faced and those that looked ahead to the future growth of the company. In the latter category falls the decisions outlined below, each intended to embrace the most current best practices regarding market-based and performance-focused compensation:

Mr. Joly was recruited as the new President and CEO in August 2012. In designing his remuneration package, the Compensation Committee paid particular attention to the ways in which Mr. Joly was being incented to perform. The overwhelming majority of his annual compensation is variable compensation that depends on changes in share price and the degree to which specific performance goals are attained. As for his sign-on bonus, it was intended to compensate Mr. Joly for money he would have collected from his previous employer had he remained in its employment. What is important to note is that, while Mr. Joly's previous employer was committed to paying him that amount in cash, the equivalent value provided by Best Buy was predominantly, over 80%, in equity, much of it tied to performance metrics.

Sharon McCollam was recruited as our Executive Vice President, Chief Administrative Officer and Chief Financial Officer in November 2012. Her compensation package, as outlined in her employment agreement, reflects the breadth of her role including all aspects of global finance, strategic planning and corporate development, information technology, procurement and oversight of our real estate portfolio.

For current NEOs, in light of financial performance coming in well-below expectations, no short-term incentive awards were paid.

In light of shareholder feedback regarding the severance package offered to Mr. Dunn, the Compensation Committee took a concerted effort to ensure future NEO departures were handled with full transparency and consistent with previously disclosed benefits and obligations. This was evident in the Compensation Committee's handling of the involuntary departures of Mr. Muehlbauer and Mr. Vitelli, the terms of which were consistent with our ERISA severance plan and the award agreements in place at the time of their departures.

The Compensation Committee approached a voluntary NEO departure with similar discipline. Stephen Gillett was recruited in March 2012 to lead the Company's digital transformation and e-commerce platforms. Upon his voluntary departure in December 2012, the Company exercised the clawback provisions in his agreements — returning or forfeiting approximately 80% of his compensation. Consistent with the award agreements in place, the Compensation


37



Committee was able to claw back $2,668,291, consisting of the after-tax portion of his sign-on cash bonus, the cash portion of the Continuity Awards, and expenses related to Mr. Gillett's relocation. The unvested portions of his fiscal 2013 long-term incentive awards, equity sign-on grant and the equity portion of his Continuity Award, all together valued at $7,461,471, were forfeited.

Based on shareholder feedback and a review of market practices, a performance-based component was added to the executive long-term incentive plan. Equity awards to NEOs now are composed of one-third performance shares tied to relative total shareholder return ("TSR"), one-third stock options, and one-third restricted stock, with the CEO's 2014 awards being in the form of 50% performance-based shares, 20% stock options, and 30% time-based restricted stock.


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Compensation Discussion and Analysis

The Compensation Discussion and Analysis below describes how the Compensation Committee of the Board ultimately decided to compensate the following individuals, all of whom are considered NEOs of the Company under SEC rules for fiscal 2013:
Current Executives
Hubert Joly, President and CEO;
Sharon L. McCollam, Executive Vice President (“EVP”) – Chief Administrative Officer (“CAO”) and Chief Financial Officer (“CFO”);
Shari L. Ballard, EVP – President, International;
Keith J. Nelsen, EVP – General Counsel, Chief Risk Officer and Secretary; and
Carol A. Surface, EVP – Chief Human Resources Officer.

Departed Executives
Brian J. Dunn, former CEO;
George L. Mikan III, former interim CEO;
James L. Muehlbauer, former EVP – Finance and CFO;
Stephen Gillett, former President, Best Buy Digital and EVP, Global Business Services; and
Michael A. Vitelli, former EVP – President, U.S.

Compensation Philosophy, Objectives and Policies

The Company's compensation philosophy is based on the desire for executive remuneration to align with the interests of shareholders. To do this, the Compensation Committee worked to ensure that long-term incentives are heavily weighted toward company performance and consistent with market norms. This is in line with past practice, a fact reflected in the prior year's "Say on Pay" vote that was overwhelmingly positive.

We seek to deliver pay-for-performance while meeting the following objectives:

Attract, motivate and retain highly qualified executives;

Establish challenging, but realistic goals, balanced between short-term and long-term objectives;

Provide a meaningful portion of compensation in variable (versus fixed) pay, with a significant portion of variable compensation in the form of long-term equity awards; and

Maintain a flexible compensation structure that allows employees to share in our success.

We implement these objectives by employing programs that are designed to align employee interests with Company goals and create a common vision of success, but without undue risk.

Consistent with these objectives, the following executive compensation policies and practices were in effect during fiscal 2013:

Pay-for-performance. We tie pay to performance. The majority of executive pay is not guaranteed and tied to performance metrics designed to drive shareholder value. If goals are not attained, no compensation is paid, which was the case with regard to our short-term incentive plan for fiscal 2013.

Mitigate undue risk. We mitigate undue risk, including utilizing caps on incentive award payments and vesting periods on potential equity payments, clawback provisions, restrictive covenants and multiple performance metrics. The Compensation Committee annually reviews our compensation risk profile to ensure that our compensation-related risks are not reasonably likely to have a material adverse effect on the Company.

Double trigger. Our agreements that provide for accelerated vesting of future equity awards after a change in control do so only if an employee is also terminated within a specified period of time after the change in control (a double trigger).

Independent Compensation Committee and Committee Consultant. The Compensation Committee is comprised solely of independent directors. The Compensation Committee's independent compensation consultant is retained directly by


39



the Compensation Committee and performs no other consulting or other services for the Company.

Shareholder engagement. We routinely engage with shareholders regarding executive compensation and related issues. These efforts have continued and increased following last year's “Say on Pay” vote.

Re-pricing of stock options. Under the terms of our Omnibus Plan, a stock option may not, without the approval of our shareholders, be: (1) amended to reduce its initial exercise price (except for adjustments in the case of a stock split or similar event); or (ii) canceled and replaced by a stock option having a lower exercise price.

Stock ownership and trading policies. We have stock ownership guidelines for our executive officers, including the NEOs. As of the end of fiscal 2013, each NEO was in compliance with the guidelines. We have a policy prohibiting all employees, including the NEOs, from engaging in any hedging transactions with respect to equity securities of the Company.

NEOs' benefits. Our executive officers, including the NEOs, generally receive the same employee benefits as other officers. We do not have an executive retirement plan that provides extra benefits to the NEOs.




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Governance

The following table summarizes the roles of each of the key participants in the executive compensation decision-making process for our NEOs.
Key Participant
 
 
 
 
Compensation Committee
 
 
 
 
Role in Decision-Making Process
Establishes our compensation objectives.
 
Determines, approves and oversees executive compensation, including the design, competitiveness and effectiveness of our compensation programs. Also oversees the development, evaluation and approval of incentive compensation, equity-based pay and other material employee benefit plans for all employees, including the NEOs.
 
Certain matters that do not materially impact our NEOs have been delegated by the Compensation Committee to members of management in order to ensure timely decision-making, maintain compliance with legal or regulatory obligations or for administrative reasons.
 
The Compensation Committee's charter is available on our website at www.investors.bestbuy.com — select the "Corporate Governance" link.
 
Compensation Committee's Independent Compensation Consultant
Role in Decision-Making Process
Reviews the recommendations of management with the Compensation Committee to ensure that the recommendations are aligned with our stated objectives and are reasonable when compared to our peer market for executive and director talent.
 
Meets with members of management to gain a holistic understanding of the current business environment and Company strategies.
 
Reviews the results of the risk assessment with the Compensation Committee and identifies key takeaways.
 
Provides perspective on market practice.
 
The Delves Group served as the Independent Compensation Consultant for the past several years until July 2012. Frederic W. Cook & Co., Inc. succeeded The Delves Group as advisor to the Board in the fall of 2012, beginning with the construction of the current CEO's compensation package. The Compensation Committee reviewed the independence of Frederic W. Cook & Co., Inc. under SEC rules and concluded that its work has not raised any conflict of interest.
 
CEO
 
 
 
 
Role in Decision-Making Process
Creates and presents recommendations to the Compensation Committee for our other executive officers and provides his perspective. Does not participate in or otherwise influence recommendations regarding his own compensation.
 
 
 
 
 
Human Resources ("HR")
 
 
 
 
Role in Decision-Making Process
As led by Ms. Surface, EVP and Chief Human Resources Officer, provides the Compensation Committee with market analytics in support of the CEO's recommendations for our executive officers, other than the CEO. Management does not make recommendations on CEO compensation.
 
Our other NEOs do not participate in the development of compensation recommendations or the approval process.
Factors in Decision-Making

Market Competitive Data. For fiscal 2013, each element of compensation and the level of total direct compensation for our NEOs was considered against market benchmarks and views of individual performance. Our Compensation Committee reviewed publicly available compensation data for our peer group of companies and the Fortune 100 and in some instances, also consulted survey and S&P 500 data. We used available information and monitored actions taken by our peer group to evaluate market trends and to assess the long-term incentive and overall competitiveness of our executive compensation levels. We did not, however, seek to establish any specific element of compensation or total direct compensation that falls within a


41



prescribed range relative to our peer group of companies, the Fortune 100 or the S&P 500. In addition, the Compensation Committee at times uses our peer group of companies to comparatively evaluate:

(1)
The cost of the total direct compensation paid to our NEOs;

(2)
The relationship between our financial performance and the compensation paid to our NEOs; and

(3)
The relative difficulty in achievement of our incentive performance targets.

Change in Peer Group in Fiscal 2013. We review our peer group annually. For several years prior to fiscal 2013, our peer group had remained stable, with few exceptions. We had continued to use the same factors to select our peer group: predominantly retail or wholesale companies with more than $5 billion in revenue and significant revenue generated outside of the U.S. Our peer group at the time compensation was determined for our NEOs in fiscal 2012 was comprised of the following companies:
Amazon.com, Inc.
Harley-Davidson, Inc.
The TJX Companies, Inc.
Apple Inc.
Lowe's Companies Inc.
Wal-Mart Stores Inc.
Costco Wholesale Corporation
Nordstrom Inc.
Walgreen Co.
Dell Inc.
Staples, Inc.
Walt Disney Co.
eBay Inc.
Starbucks Corporation
Whole Foods Market, Inc.
FedEx Corporation
Target Corp.
Yahoo! Inc.

The Compensation Committee strives to ensure that our peer group is an accurate reflection of our business strategy, represents the labor market for executive talent and includes external perspectives. For fiscal 2013, the Compensation Committee prioritized criteria for potential peers, including the following, and determined changes to the peer group were appropriate:

Business strategy: Combination of retailers, e-tailers, digital companies, global companies and iconic brands;
Size: Revenue and/or market capitalization similar to us;
Current peers: Preference, but not obligation, toward consistency in an effort to maintain consistency from year to year in the results of our compensation analysis; and
Labor market consideration: Companies that listed us as a peer.
    
Beginning in fiscal 2013, our peer group includes the following companies:
Amazon.com, Inc.
Limited Brands, Inc.*
Staples, Inc.
Apple Inc.
Lowe's Companies Inc.
Target Corp.
Costco Wholesale Corporation
Macy's, Inc.*
Time Warner Cable Inc.*
Dell Inc.
Microsoft Corporation*
Wal-Mart Stores Inc.
DIRECTV, Inc.*
Nike Inc.*
Walgreen Co.
eBay Inc.
Nordstrom Inc.
Walt Disney Co.
Google Inc.*
Office Depot, Inc.*
Yahoo! Inc.
The Home Depot, Inc.*
Sears Holdings Corporation*
 
* New to peer group in fiscal 2013. FedEx Corporation, Harley-Davidson, Starbucks Corporation, The TJX Companies, Inc., and Whole Foods Market, Inc. were in the prior year's peer group, but were dropped in 2013.
At the time of the analysis, relative to the 23 companies, the Company's revenues were between the median and 75th percentile, but below the 25th percentile on market value measures. Given the state of the turnaround, the Compensation Committee determined that Company revenues were more appropriate than market value at that time.


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Ongoing Compensation — Executive Compensation Elements

Overview.    Our NEOs' compensation in fiscal 2013 included the following ongoing elements:
Compensation Component
 
Key Characteristics
 
Purpose
 
Principal Fiscal 2013 Actions
Base Salary
 
Cash. Reviewed annually and adjusted if and when appropriate.
 
Provide competitive, fixed compensation to attract and retain executive talent.
 
Base compensation changes limited to a 5% market adjustment for Mr. Nelsen. No other increases.
 
Short-Term Incentive ("STI")
 
Cash. Variable compensation component. Performance-based award opportunity. Payable based on a combination of financial metrics and individual goals.
 
Create a strong financial incentive for achieving or exceeding Company and individual goals.
 
Financial metrics for fiscal 2013 included revenue and net operating profit.

The NEOs received no STI payments as the financial thresholds for net operating profit were not met.

 
Long-Term Incentive ("LTI")
 
Time-based stock options, time-based restricted stock, and performance-based restricted stock.

 
Create a strong financial incentive for increasing shareholder value and encourage a significant equity stake in the Company.

 
Continuing NEOs received the same grant levels as in the last fiscal year. The mix changed from 75% options and 25% time-based restricted stock to 33% performance-based restricted stock, 33% time-based restricted stock and 33% options. For fiscal 2014, the CEO's mix will be 50% performance-based restricted stock, 20% stock options and 30% time-based restricted stock.
 
Sign-on Awards
(Joly, McCollam, Gillett)
 
Cash and Equity


 
Secure executive talent and replace, where necessary, value foregone at prior employers.

 
Used in the recruitment of executive talent.
 
 
 
 
 
 
 
Health, Retirement and Other Benefits
 
Eligibility to participate in benefit plans generally available to our employees, including health, retirement, stock purchase, severance, life insurance and disability plans.
 
Plans are part of our broad-based employee benefits program.
 
The NEOs continue to participate in generally the same benefits as our other employees.
 
Executive Benefits
 
Annual executive physical exam, supplemental long-term disability insurance, four weeks of paid vacation, stock ownership target planning and tax planning/preparation services.
 
Provide competitive benefits to promote the health, well-being and financial security of our executive officers.
 
No material changes were made to the NEOs' benefits in fiscal 2013.
 
 
 
 
 
 
 







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Fiscal 2013 Pay Mix.    The Compensation Committee emphasizes variable performance-based pay when setting the pay mix for our executive officers, but does not establish a set pay mix for them. The target pay mix for fiscal 2013 for the former CEO's pay mix prior to his departure (and remains the target structure for the CEO in fiscal 2014) and our other current NEOs, on average, is shown below. The Compensation Committee adhered to this same structure in granting the sign-on pay for its new CEO, which was over 80% in equity as also shown below, much of it tied to performance. Actual salary levels, STI awards (discussed in further detail in Short-Term Incentive) and LTI awards (discussed in further detail in Long-Term Incentive) vary based on the market analysis described above.

Each element in the pay mix is discussed below and shown in the Summary Compensation Table as found in Compensation of Executive Officers.
Base Salary

In April 2012, the Compensation Committee approved the total fiscal 2013 target compensation for each then-current NEO, including approval of their base salaries. Based on the assessment of each officer relative to market data, the Compensation Committee approved a 5% salary increase for Mr. Nelsen. All other NEO salaries were maintained at the same levels. The Compensation Committee followed a similar process for the NEOs hired during the year, with particular emphasis on the individual's past compensation and peer and Fortune 100 market data.

Current Executives
Name
 
Fiscal 2013 Annual Base Salary

 
Fiscal 2012 Annual Base Salary

 
Percent Change
Mr. Joly

 
$
1,175,000

 
n/a

 
n/a
Ms. McCollam
 
$
925,000

 
n/a

 
n/a
Ms. Ballard
 
$
700,000

 
$
700,000

 
0%
Ms. Surface
 
$
490,000

 
$
490,000

 
0%
Mr. Nelsen
 
$
485,000

 
$
460,000

 
5%

    

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Departed Executives
Name
 
Fiscal 2013 Annual Base Salary

 
Fiscal 2012 Annual Base Salary

 
Percent Change
Mr. Dunn
 
$
1,100,000

 
$
1,100,000

 
0%
Mr. Mikan
 
n/a

 
n/a

 
n/a
Mr. Muehlbauer
 
$
675,000

 
$
675,000

 
0%
Mr. Gillett
 
$
875,000

 
n/a

 
n/a
Mr. Vitelli
 
$
700,000

 
$
700,000

 
0%
Short-Term Incentive

Our executive compensation programs are designed to ensure that a greater percentage of total compensation for higher ranking positions is linked to company performance. For fiscal 2013, the NEOs were eligible for performance-based, short-term incentive awards pursuant to our fiscal 2013 STI. Fiscal 2013 STI awards were expressed as a target payout percentage of salary and if earned, would be payable in cash (as explained below, no NEO received a payout).

Lower-than-threshold performance resulted in no payments for fiscal 2013. The fiscal 2013 STI was comprised of several different plans that had unique performance criteria to align with the varying responsibilities and geographic areas served by the group of employees eligible for each plan. For fiscal 2013, Messrs. Muehlbauer, Nelsen and Vitelli and Mss. Ballard and Surface were eligible. Messrs. Dunn and Gillett were not eligible due to their early departures, and Mr. Joly and Ms. McCollam were not eligible due to the dates of their hire late in the fiscal year.

Fiscal 2013 STI Performance Criteria.    In February 2012, the Compensation Committee approved the performance criteria, in the form of metrics, and in April 2012 the Compensation Committee approved the target performance levels for each metric for each of the fiscal 2013 STI plans. The performance metrics were designed to support our fiscal 2013 business priorities, specifically centering on profitable growth and talent development. The metrics were:

Net operating profit ("NOP") — NOP is defined as revenue minus cost of goods sold, and selling, general and administrative expenses. NOP was included as a key metric because it reflects the decisions and actions of a short-term environment while still taking selling, general and administrative expenses into account. Satisfaction of this metric serves as a funding gate. Because NOP was not achieved, there was no payment and no other metrics influenced this result;
Revenue — revenue growth continued to be a key indicator for the retail industry;
Talent Index — metric includes three equally weighted talent management components that emphasize the importance of building a robust talent bench; and
Customer Satisfaction — the Compensation Committee included this metric to help focus leadership on improving customer satisfaction, which is a key driver of improved results across many key indicators.

EVP, President - International STI Plan metrics were designed to provide consistency with the Enterprise Executive STI Plan metrics, but focus more directly on the performance of our International business segment. Since Ms. Ballard's role specifically involved the management of the international businesses, these metrics were more appropriate for her scope of responsibility.

EVP, President - U.S. STI Plan metrics were designed to provide consistency with the Enterprise Executive STI Plan metrics, but focus more directly on the performance of our Domestic business segment. Since Mr. Vitelli's role specifically involved the management of the business in the U.S., these metrics were more appropriate for his scope of responsibility.

For all other NEOs, the metrics described above were measured at the enterprise level.

In establishing the target performance levels, the Compensation Committee considered our historical performance and target setting practices, as well as investor and analyst expectations. The Compensation Committee set a minimum performance threshold on Enterprise NOP of $1,795 million. With actual performance of $1,439 million, the threshold was not met and no STI payments were authorized by the Compensation Committee for any of the NEOs. The calculation of NOP compares to GAAP operating income of $162 million, which includes $822 million of goodwill impairment and $456 million of restructuring charges.




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Determination of Fiscal 2013 STI Target Payout.    In April 2012, the Compensation Committee approved the target payout percentages for our NEOs under the fiscal 2013 STI plan, as part of their review of the NEOs' total fiscal 2013 target compensation. The Compensation Committee generally applies a tiered approach in determining the potential target payout percentages for each NEO, establishing a target payout at 100%, 125%, 150% or 200% of salary for each individual. The specific target payout percentage for each NEO is determined based on external market data for equivalent roles, with emphasis placed on job value and internal pay equity among the NEOs.

For fiscal 2013, the tiered target payouts of 100%, 125% and 200% of salary remained the same as in fiscal 2012, and a new target of 150% was added for Mr. Gillett and Ms. McCollam (though she was not eligible for fiscal 2013). For each of the metrics, the NEOs could earn zero to two times their weighted target payout percentage for that metric, making the maximum fiscal 2013 STI payout 2.0 times their target payout percentage.

Current Executives
Name
 
Target Payout
Percentage
 
Annual Target Payout Value,
based on Salary
 
Fiscal 2013 STI
Payment
 
Fiscal 2013 STI
Payment, as a
Percentage of
Salary
Mr. Joly
 
200

 
%
 
 
n/a

 
 
 
 
n/a
 
 
n/a

 
Ms. McCollam
 
150

 
%
 
 
n/a

 
 
 
 
n/a
 
 
n/a

 
Ms. Ballard
 
125

 
%
 
$
875,000

 
 
 
$
0
 
 
0
%
 
Ms. Surface
 
100

 
%
 
$
490,000

 
 
 
$
0
 
 
0
%
 
Mr. Nelsen
 
100

 
%
 
$
485,000

 
 
 
$
0
 
 
0
%
 

Mr. Joly and Ms. McCollam were not eligible for STI in fiscal 2013 due to the dates of their hire. As part of her sign-on awards detailed below, Ms. McCollam received a payment of $231,250 which equates to a pro-rated target bonus.

Departed Executives
Name
 
Target Payout
Percentage
 
Annual Target Payout Value,
based on Salary
 
Fiscal 2013 STI
Payment
 
Fiscal 2013 STI
Payment, as a
Percentage of
Salary
Mr. Dunn
 
200

 
%
 
$
2,200,000

 
 
 
$
0
 
 
0
%
 
Mr. Mikan
 
n/a

 
 
 
 
n/a

 
 
 
 
n/a
 
 
n/a

 
Mr. Muehlbauer
 
125

 
%
 
$
843,750

 
 
 
$
0
 
 
0
%
 
Mr. Gillett
 
150

 
%
 
 
n/a

 
 
 
 
n/a
 
 
n/a

 
Mr. Vitelli
 
125

 
%
 
$
875,000

 
 
 
$
0
 
 
0
%
 

Mr. Mikan was paid a stipend described below in lieu of participation in the STI plan. Mr. Gillett was not eligible for a payment due to the date of his departure.

Long-Term Incentive

Awards of equity-based compensation to our executive officers encourage a strong ownership stake in the Company and align the interest of the NEOs and our shareholders. All equity-based incentive awards for our NEOs and directors must be approved by the Compensation Committee. During fiscal 2013, we made long-term incentive awards to our NEOs and other eligible employees (typically, manager level and above) pursuant to our LTI Program as approved by the Compensation Committee in April 2012. LTI awards are made under our Omnibus Plan.

Form of Fiscal 2013 LTI Award. In fiscal 2013, we conducted a comprehensive review of our long-term incentive program which resulted in us creating a greater link between pay and performance. Upon completion of that review, the Compensation Committee approved a redesigned LTI program for the NEOs starting in fiscal 2013. The redesigned program introduced a structure under which one-third of all officer awards will be contingent on business performance, in this case relative Total Shareholder Return ("TSR") (relative to the S&P 500 Index). TSR was selected based on its prevalence in the market place and directly link to shareholder value creation. The metric for this is as follows:

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Performance Level
 
Performance Achieved
 
Payout Percentages
Below Threshold
 
Less than 30th percentile rank TSR
 
0%
At Threshold
 
30th percentile rank TSR
 
0%
At Target
 
50th percentile rank TSR
 
100%
At Maximum
 
70th or greater percentile rank TSR
 
150%

This results in a balanced portfolio of compensation rewards consisting of 33% performance shares (to reward performance), 33% stock options (to reward share price appreciation), and 33% time-based restricted shares (to promote retention), as compared to the prior structure of 75% stock options and 25% time-based restricted shares. Furthering this, for fiscal 2014, the CEO's mix will be 50% performance-based restricted stock, 20% stock options and 30% restricted stock, as shown below.

 
Stock option and time-based restricted stock awards were granted to our NEOs in equal quarterly installments during our regularly scheduled Board meetings. The non-qualified stock options have a term of ten years and become exercisable over a three-year period at the rate of 33% per year, beginning one year from the date of grant, subject to being employed on the vesting date. The exercise price for such options is equal to the closing price of our common stock on the grant date, as quoted on the NYSE. The time-based restricted stock also vests in equal installments of 33% on the three successive anniversaries of the grant. The number of restricted stock shares is determined using a 3:1 (options to restricted shares) ratio. The performance shares, however, are granted only once per year (the fiscal 2013 grant was delayed until September 2012 due to the leadership transition) as opposed to each quarter, and the final number of shares that actually vest will not be known until performance has been measured following the performance period (which goes from October 1, 2012 through September 30, 2015).

Under the terms of the Omnibus Plan, we may not grant stock options at a discount to fair market value. Unless otherwise determined by the Compensation Committee, "fair market value" as of a given date is the closing price of our common stock as quoted on the NYSE on such date or, if the shares were not traded on that date, the most recent preceding date when the shares were traded.

Determination of Fiscal 2013 LTI Award.  In April 2012, the Compensation Committee approved the fiscal 2013 equity grant levels for the NEOs. The Compensation Committee translated at the time of the annual compensation review a desired target value into a number of units based on historical prices. We chose to use historical prices due to the extraordinary volatility of the share price at the time of the turnaround. This resulted in grant date valuations significantly below target compensation levels.

LTI award amounts are determined based upon analysis of external market data, with overall compensation mix and external market data for equivalent roles being key factors in the determination of the award made to each NEO. The fiscal 2013 LTI awards for each NEO are set forth below:


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Current Executives
Annual Fiscal 2013 Award Details
Mr. Joly
0 stock options, 0 restricted shares & 0 performance shares
Ms. McCollam
0 stock options, 0 restricted shares & 0 performance shares
Ms. Ballard
41,586 stock options, 11,112 restricted shares & 11,112 performance shares
Ms. Surface    
37,425 stock options, 10,000 restricted shares & 10,000 performance shares
Mr. Nelsen
37,425 stock options, 10,000 restricted shares & 10,000 performance shares
Departed Executives
Annual Fiscal 2013 Award Details
Mr. Dunn
0 stock options, 0 restricted shares & 0 performance shares
Mr. Mikan    
0 stock options, 0 restricted shares & 0 performance shares
Mr. Muehlbauer
70,693 stock options, 18,892 restricted shares & 18,889 performance shares
Mr. Gillett
128,100 stock options, 35,001 restricted shares & 46,667 performance shares
Mr. Vitelli
41,586 stock options, 11,112 restricted shares & 11,112 performance shares
Mr. Joly and Ms. McCollam did not participate in the LTI program in fiscal 2013 due to their late dates of hire. However, they did receive substantial grants of equity as part of their sign-on awards, as described below. The Compensation Committee also determined that their equity awards for fiscal 2014 would have grant date value of no less than $8,750,000 for Mr. Joly and $4,050,000 for Ms. McCollam, and that Mr. Joly's LTI award mix will be 50% performance-based restricted stock, 20% stock options and 30% time-based restricted stock. The increased weighting on performance shares ensures that compensation realized from the LTI is closely aligned with Company performance. For fiscal 2014, performance share earnout will continue to be based on our TSR relative to the companies comprising the S&P 500 index.
Due to the short-term nature of his interim assignment, the Compensation Committee structured a unique equity award for Mr. Mikan that is described in the Stipend section below.
As noted above, Mr. Gillett's unvested LTI awards were forfeited upon termination.
Additional information regarding the LTI awards granted to the NEOs in fiscal 2013 is included in the Grants of Plan-Based Awards.
Sign-on Awards

When negotiating with potential executive talent about a move to Best Buy, the Compensation Committee utilizes market data, similar to the way it applies them in its annual review of NEO pay. In many situations, it is necessary to include special sign-on components to attract the executive from their current situation. These awards are structured to replace the value foregone by the executive, align the executive with shareholders by creating a material equity stake, and where feasible, connect with the performance objectives of the Company.

Hubert Joly

On August 20, 2012, the Company announced that its Board of Directors appointed Hubert Joly as its President and Chief Executive Officer. To compensate Mr. Joly for certain forfeitures incurred upon termination of his employment with his prior employer, the Company granted to Mr. Joly certain buy-out awards as summarized below. The value of the following buy-out awards was determined based on amounts forfeitable or forfeited by Mr. Joly as a result of the termination of his employment with his prior employer.

A buy-out cash award of $3,500,000;
A grant of fully vested shares of common stock valued at $3,000,000 on the date of grant. Mr. Joly has agreed to hold such shares for at least two years from the date of grant or, if earlier, his termination;
A grant of restricted stock units with a grant date value of $6,000,000, vesting in 36 equal monthly installments, payable six months after Mr. Joly's separation from the Company;
A stock option grant having a Black Scholes value of $3,750,000 vesting 25% on the date of grant and 75% in equal installments on the first three anniversaries of Mr. Joly's start date; and
A grant of performance share units having a grant date value, at target, of $3,750,000, subject to goals based on the performance of Best Buy's total shareholder return relative to a peer group over three years.


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For detailed treatment of these awards upon termination, see Compensation of Executive Officers — Potential Payments Upon Termination or Change-in-Control.

Sharon L. McCollam

Best Buy appointed Sharon L. McCollam as Executive Vice President, Chief Accounting Officer and Chief Financial Officer in December 2012. In connection with Ms. McCollam's appointment, Best Buy entered into an employment agreement with Ms. McCollam which included the following sign-on awards:

A cash award of $500,000;
A guaranteed pro-rated target STI bonus of $231,250 for the two months Ms. McCollam was employed during fiscal 2013;
A grant of restricted shares with a grant date value of $1,333,334, vesting in one-third installments on each of the first, second and third anniversaries of Ms. McCollam's start date;
A stock option grant having a Black Scholes value of $1,333,334, vesting in one-third installments on each of the first, second and third anniversaries of Ms. McCollam's start date; and
A grant of performance shares having a grant date value, at target, of $1,333,334, subject to goals based on the performance of Best Buy's total shareholder return relative to a peer group over three years.

In determining the overall value of these awards, the Compensation Committee considered sign-on awards for CFOs of Fortune 100 companies within the recent years and market information on CAO compensation. For detailed treatment of these awards upon termination, see Compensation of Executive Officers — Potential Payments Upon Termination or Change-in-Control.

Stephen Gillett

Best Buy appointed Stephen Gillett, as EVP and President, Best Buy Digital and Global Business Services in March 2012. The Compensation Committee approved the following sign-on compensation for Mr. Gillett:

One-time equity sign-on grant of $5,300,000 to replace value foregone at his former employer;
A sign-on cash bonus of $2,500,000; and
Participation in the Continuity Awards described below.

Mr. Gillett resigned from the Company on December 19, 2012, resulting in the return or forfeiture of approximately 80% of his fiscal 2013 compensation. Consistent with the award agreements in place, the Compensation Committee was able to claw back $2,668,291, consisting of the after-tax portions of his sign-on cash bonus, the cash portion of his Continuity Award and expenses related to Mr. Gillett's relocation. The unvested portions of Mr. Gillett's fiscal 2013 LTI awards, equity sign-on grant and the equity portion of his Continuity Award, all together valued at $7,461,471, were also forfeited.

Other Compensation

Benefits. Our executive officers, including our NEOs, are generally offered the same employee benefits offered to all U.S.-based officers, as summarized in the following table:


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Benefit
 
All Full-Time
U.S.-Based Employees
 
Executive
Officers
Accidental Death & Dismemberment
 
Ÿ
 
Ÿ
Business Travel & Accident
 
Ÿ
 
Ÿ
— Executive Business Travel & Accident
 
 
 
Ÿ
Deferred Compensation Plan(1)
 
Ÿ
 
Ÿ
Employee Discount
 
Ÿ
 
Ÿ
Employee Stock Purchase Plan
 
Ÿ
 
Ÿ
Health Insurance
 
Ÿ
 
Ÿ
— Executive Physical Exam
 
 
 
Ÿ
Life Insurance
 
Ÿ
 
Ÿ
Long-Term Disability
 
Ÿ
 
Ÿ
— Executive Long-Term Disability
 
 
 
Ÿ
Retirement Savings Plan
 
Ÿ
 
Ÿ
Severance Plan
 
Ÿ
 
Ÿ
Short-Term Disability
 
Ÿ
 
Ÿ
Stock Ownership Target Planning
 
 
 
Ÿ
Tax Planning and Preparation
 
 
 
Ÿ
(1)
Only highly compensated employees and directors are eligible to participate in the Deferred Compensation Plan, as described below.

We provide the executive benefits noted above to compete for executive talent and to promote the health, well-being and financial security of our NEOs. A description of executive benefits, and the costs associated with providing them for the NEOs, are reflected in the "All Other Compensation" column of the Summary Compensation Table as found in Compensation of Executive Officers.

Deferred Compensation Plan.    We sponsor the Best Buy Co., Inc. Fifth Amended and Restated Deferred Compensation Plan, as amended ("Deferred Compensation Plan") that is unfunded and unsecured. We believe the plan provides a tax-deferred retirement savings vehicle that plays an important role in attracting and retaining executive talent. Additional information about the Deferred Compensation Plan is included in Compensation of Executive Officers — Non-Qualified Deferred Compensation.

Employee Stock Purchase Plan.    Our 2008 Employee Stock Purchase Plan, as amended ("ESPP") allows employees, including our NEOs, to purchase our common stock at a discount. During fiscal 2013, the stock purchase price was 85% of the fair market value of the common stock, as measured by the closing price quoted on the NYSE at the beginning or at the end of a semi-annual purchase period, whichever was lower. (This discount, however, was recently changed in fiscal 2014 from 15% to 5%, and the look-back feature was eliminated.) There is a maximum purchase value per participant of $25,000 per calendar year for all plan participants. Beginning with purchases in September 2011, shares acquired through the ESPP are subject to a 12-month holding period except in limited circumstances (such as death or disability).

Retirement Savings Plan.    Our Retirement Savings Plan is intended to meet the requirements of Section 401(k) of the Internal Revenue Code of 1986 (the "Code"). All of our NEOs are eligible to participate in the plan. The Retirement Savings Plan provides a safe harbor that allows U.S.-based employees to contribute pre-tax income and immediately vest in Company matching contributions. The plan is expected to provide an improved opportunity for such employees to achieve retirement income security. However, the plan is not expected to provide sufficient income replacement relative to our NEOs' anticipated retirement needs. The potential retirement income gap for our NEOs may be filled by other compensation elements, including long-term incentives, or by the deferral of a portion of base salary or short-term incentive awards under the Deferred Compensation Plan. Under the Retirement Savings Plan, we match employee contributions, including those made by our NEOs, at rates approved by the Compensation Committee, which are the same for all eligible employees. Continuing in fiscal 2013, we matched 100% of the first 3% and 50% of the next 2% of eligible pre-tax earnings (up to Internal Revenue Code limits) contributed by plan participants.

Severance Plan.    We have a severance plan that complies with the applicable provisions of the Employee Retirement Income Security Act (ERISA). The purpose of the severance plan is to provide financial assistance to employees while they seek other employment, in exchange for a release of any claims. Although there are differences in benefits depending on the employee's job level, the basic elements of the plan are comparable for all eligible employees. The plan generally covers all full-time and part-time U.S. employees of Best Buy Co., Inc. and Best Buy Stores, L.P. and their respective direct and indirect U.S.-domiciled subsidiaries, including the NEOs, except for those subject to a separate severance agreement or specifically excluded.

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The plan covers involuntary terminations due to job elimination and discontinuation, office closing, reduction in force, business restructuring and other circumstances as we determine. Eligible terminated employees receive a severance payment ranging from six months to two years of base salary, with basic employee benefits such as medical, dental and life insurance continued for an equivalent period. Except as modified or replaced by individual employment agreements (as described herein), the NEOs, and other enterprise executive vice presidents, are eligible for two years of salary and a payment of 150% of the cost of 24 months of basic employee benefits such as medical, dental and life insurance.

Stock Ownership, Tax and Other Policies

Executive Stock Ownership Guidelines.    The Compensation Committee has established stock ownership guidelines to promote the alignment of officer and shareholder interests and to encourage behaviors that have a positive influence on stock price appreciation and total shareholder return. The guidelines apply to all officers, including the NEOs, and are part of an effort to encourage stock ownership by our officers and to instill a pay-for-performance culture. Under the guidelines, we expect our officers, including the NEOs, to acquire ownership of a fixed number of shares, based on their position. The stock ownership expectation generally remains effective for as long as the officer holds the position.

In addition to shares personally owned by each officer, the following forms of stock ownership count toward the ownership target:

Equivalent shares owned in the Best Buy Stock Fund within our Retirement Savings Plan;

50% of non-vested shares subject to performance conditions granted under our LTI program;

50% of non-vested shares subject to time-based conditions granted under our LTI program; and

50% of the intrinsic value of vested stock options granted under our LTI program.

We expect that until the ownership target is met officers will retain: (i) 50% of the net proceeds received from the exercise of a stock option in the form of Best Buy common stock; and (ii) 50% of shares net of taxes issued in connection with the lapse of restrictions on restricted stock or performance share awards. The ownership target does not need to be met within a certain time frame and our officers are considered in compliance with the guidelines as long as progress towards the ownership target is being made consistent with the expectations noted above.
The ownership targets and current ownership levels for our NEOs is shown below.
Name
 
Ownership Target(1)
Current Ownership Using Guidelines
Mr. Joly
 
140,000 shares
285,666 shares
Ms. McCollam
 
55,000 shares
       53,807 shares
Ms. Ballard
 
55,000 shares
151,818 shares
Mr. Nelsen
 
35,000 shares
57,802 shares
Ms. Surface
 
35,000 shares
       93,440 shares
(1)
Ownership targets will be adjusted for stock splits, stock dividends or similar events.

In fiscal 2013, all NEOs were in compliance with the ownership guidelines.

Tax Deductibility of Compensation.    Section 162(m) of the Code limits the deductibility of compensation in excess of $1 million paid to the chief executive officer and each of our three most highly compensated executive officers (other than the chief executive officer and chief financial officer), unless the compensation qualifies as "performance-based compensation." Among other things, in order to be deemed performance-based compensation, the compensation must be based on the achievement of pre-established, objective performance criteria and must be pursuant to a plan that has been approved by our shareholders. We believe that it is important to continue to be able to take available Company tax deductions with respect to the compensation paid to our NEOs. We do not, however, make compensation decisions based solely on the availability of a deduction under Section 162(m).

Clawback and Restrictive Covenant Provisions.    Our senior management performance awards have typically included clawback provisions, particularly where it has been difficult to match the period of an employee's influence on business results.


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We may exercise our rights under such provisions if other strategies to mitigate unjust rewards are difficult to achieve. In September 2010, we adopted a new Clawback Policy to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act, with final policy language to be determined after the SEC adopts related rules. The Clawback Policy also expanded our prior policy to cover all executive officer incentive award agreements. In addition to the clawback provisions, we include confidentiality, non-compete, non-solicitation and in select situations, non-disparagement provisions.

Re-pricing of Stock Options.    Under the terms of our Omnibus Plan, a stock option may not, without the approval of our shareholders, be: (i) amended to reduce its initial exercise price, except in the case of a stock split or similar event; or (ii) canceled and replaced by a stock option having a lower exercise price.

Accounting Treatment.    We account for equity-based awards based on their grant date fair value. Compensation expense for these awards is recognized over the requisite service period of the award (or to an employee's eligible retirement date, if earlier). However, if an award is subject to a performance condition, the recognized expense will vary based on our estimate of the number of shares that will ultimately vest.

Transactions in Company Securities.    All employees and non-employee directors are prohibited from purchasing or selling options of our common stock and from short selling our securities. Pursuant to our Securities Trading Policy, trading in put or call options, straddles, equity swaps, or other derivative securities related to our common stock are also prohibited.


Non-recurring Compensation

Our NEOs' compensation in fiscal 2013 consisted of the following non-recurring elements:
Compensation Component
 
Key Characteristics
 
Purpose
 
Principal Fiscal 2013 Actions
Cash Stipend (Mikan)
 
Cash
 
Provide competitive cash compensation to the interim CEO. Structured to recognize that with limited tenure, inclusion in STI would be inappropriate.
 
Compensation Committee set stipend to deliver a prorated “total cash” amount similar to Base Salary plus STI for the role.
 
 
 
 
 
 
 
Continuity Award (Ballard, Surface, Nelsen, Gillett, Muehlbauer, Vitelli)
 
Cash payment and time-based restricted stock.

 
Retain key executive talent during interim CEO tenure and ensure orderly transition.

 
NEOs received a cash payment of $350,000 - $500,000 and restricted stock awards of $1.5-$2.0 million. In the event of a departure at the request of the Company, the payment was structured such that the executive would only retain value if departure occurred on the Company's terms.

 
 
 
 
 
 
 
CEO Severance (Dunn)
 
Cash per negotiated arrangement
 
Provide compensation in exchange for a release of claims and restrictive covenants and to ensure orderly transition.
 
Agreement entered into with Mr. Dunn
 
 
 
 
 
 
 
Other NEO Severance (Muehlbauer and Vitelli)
 
Cash per pre-existing agreements
 
Comply with currently agreements in exchange for a release of claims and restrictive covenants and to ensure orderly transition.
 
Agreements entered into with Messrs. Muehlbauer and Vitelli.
 
 
 
 
 
 
 
The non-recurring compensation elements discussed above are also reflected in the Summary Compensation Table as found in Compensation of Executive Officers.
Stipend

Best Buy appointed George L. Mikan III as interim CEO in April 2012 to lead the Company while the search for a new CEO was conducted. On May 16, 2012, the Board of Directors approved the compensation terms regarding Mr. Mikan's appointment as interim CEO. Mr. Mikan received:

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Bi-weekly payments based on annual cash compensation of $3,300,000, representing an annual base salary of $1,100,000 plus $2,200,000 in annual bonus opportunity in lieu of Mr. Mikan's participation in the STI; and
Up to 263,000 shares of stock upon the completion of his service as interim CEO, in lieu of Mr. Mikan's participation in the LTI. Based on Mr. Mikan's length of service and performance in the role, he was awarded 109,584 shares valued at $1,974,704 upon the completion of his service as interim CEO.

Continuity Awards

In fiscal 2013, the Compensation Committee granted time-based restricted stock and cash to each of the NEOs at that time. The Compensation Committee determined that, given the ongoing search for a permanent CEO in June 2012, the Continuity Awards were necessary to enable a stable CEO transition and appropriate continuity of leadership. The awards are subject to restrictive covenants, including confidentiality, non-compete, non-solicitation, and non-disparagement and contain conditions to ensure that if an executive departs the Company, he or she only receives value if they depart under certain acceptable terms. Under these terms, the planned departures of Messrs. Muehlbauer and Vitelli at year-end allowed them to retain the award, while Mr. Gillett's unplanned departure led the Compensation Committee to claw back the award.

Equity Component

The restricted shares were in addition to the existing performance-based LTI awards that were granted in fiscal 2013. The retentive power of the outstanding equity awards held by these officers was perceived to be low, as the majority of the NEOs' long-term incentive awards were stock options significantly below their exercise price. The shares had a grant price of $19.48 (closing price on June 21, 2012), and will vest at a rate of 25% on the grant date, and 25% on each anniversary of the grant date for the following three years.

Cash Component

The cash payments listed below as part of the Continuity Awards were provided as a lump sum and will be “clawed back” if the recipient voluntarily leaves the company within one year of the effective date of the appointment of the permanent CEO.

The size of each Continuity Award was based on market-practice for retention awards, including an in-depth review by the Compensation Committee of past actions at other S&P 500 companies. The table below summarizes the Continuity Awards received by each NEO:
Current Executives
# of Shares
# of Shares Forfeited
Cash
Cash Clawed Back(1)
Ms. Ballard
102,669
$500,000
Ms. Surface
102,669
$500,000
Mr. Nelsen
77,002
$350,000
Departed Executives
 
 
 
 
Mr. Gillett
102,669
77,002
$500,000
$286,500
Mr. Muehlbauer
102,669
$500,000
Mr. Vitelli
102,669
$500,000
(1) Amount is net of taxes.

Severance

Brian J. Dunn - Former CEO

As previously announced, on April 9, 2012, Mr. Brian J. Dunn notified the Board of Directors of his resignation, and the Board accepted his resignation, as Chief Executive Officer and Director, effective April 10, 2012. On May 14, 2012, we announced that the Company and Mr. Dunn had entered into a separation agreement that was approved by the Board and, which includes, among other terms, compensation provisions, a release of claims by Mr. Dunn and non-competition provisions. The value of the compensation paid to Mr. Dunn included value reflecting the increased period for non-competition from one year (Best Buy's normal policy) to three years. The compensation provisions of the separation agreement included the following:



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The previously earned fiscal year 2012 bonus of $1,140,000;
The continued vesting (which otherwise would have been forfeited upon termination of employment) of the previously awarded and reported restricted stock grants of 131,876 shares on their original terms over the next three years, at which point any unvested shares of restricted stock will vest, subject to Mr. Dunn's compliance with the non-competition provisions (such restricted stock was valued at the close of business on May 11, 2012, at $19.28 per share (totaling $2,542,569));
A severance payment of $2,850,000, payable in installments over 36 months, subject to Mr. Dunn's compliance with the non-competition provisions; and
Compensation for unused vacation of $106,742 (in accordance with Best Buy policy).

Using the May 11, 2012 stock price for calculation, the estimated total value of the compensation provisions of the separation agreement is $6,639,311. In addition, Mr. Dunn will continue to receive medical insurance benefits for 36 months.

The agreement with Mr. Dunn was made during the current fiscal year but prior to our 2012 Regular Meeting of Shareholders. Through investor outreach efforts by management, we determined that this agreement was a material source of opposition to our "Say on Pay" resolution at the 2012 Regular Meeting of Shareholders. The results of that vote and subsequent shareholder feedback strongly influenced the Compensation Committee's approach to other NEO departures later in the year.

James L. Muehlbauer - Former EVP, Finance & CFO

As previously announced on October 9, 2012, Mr. James L. Muehlbauer and Best Buy mutually agreed that Mr. Muehlbauer's employment with Best Buy would terminate at the end of Best Buy's 2013 fiscal year. Based on the Company's stated severance plan and the existing equity award agreements in place, Mr. Muehlbauer received the following:

A lump sum payment totaling $1,400,000, which consisted of 24 months of base salary ($1,350,000) and $50,000 to cover additional expenses such as tax planning, etc.;
18 months of COBRA continuation coverage for group medical, dental and vision benefits;
Accelerated vesting of the remaining 77,002 Continuity Award restricted shares and the cash amounts previously paid under his Continuity Award Agreement dated June 21, 2012; and
Accelerated vesting of 45,334 (two-thirds of the) restricted shares awarded to him under his Retention Award Agreement dated April 6, 2011 (note: the remaining one-third were forfeited).

As part of this agreement, Mr. Muehlbauer agreed to assist with the orderly transition to Best Buy's new Chief Financial Officer. Mr. Muehlbauer also agreed to, among other terms, confidentiality, non-competition and non-solicitation policies for one year following his separation date.

Michael A. Vitelli - Former EVP - President, US

As previously announced by Best Buy, on October 24, 2012, Mr. Michael A. Vitelli and Best Buy mutually agreed that Mr. Vitelli's employment with Best Buy would terminate at the end of Best Buy's 2013 fiscal year. Based on the Company's stated severance plan and the existing equity award agreements in place, Mr. Vitelli received the following:

A lump sum payment totaling $1,450,000, which consisted of 24 months of base salary ($1,400,000) and $50,000 to cover additional expenses such as tax planning, etc.;
18 months of COBRA continuation coverage for group medical, dental and vision benefits;
Accelerated vesting of the remaining 77,002 Continuity Award restricted shares and the cash amounts previously paid under his Continuity Award Agreement dated June 21, 2012; and
Accelerated vesting of 46,667 (two-thirds of the) restricted shares awarded to him under his Retention Award Agreement dated April 6, 2011 (note: the remaining one-third were forfeited).

As part of this agreement, Mr. Vitelli agreed to, among other terms, confidentiality, non-competition and non-solicitation policies for one year following his separation date.


54



Compensation and Human Resources Committee Report on Executive Compensation

The Compensation Committee has reviewed and discussed the "Compensation Discussion and Analysis," above, with management. Based on this review and discussion, the Compensation Committee recommended to the Board that the "Compensation Discussion and Analysis" be included in our Transition Report on Form 10-K for the fiscal year ended February 2, 2013, and in this proxy statement.

COMPENSATION AND HUMAN RESOURCES COMMITTEE

Ronald James (Chair)
Lisa M. Caputo
Russell P. Fradin
Kathy J. Higgins Victor



55



Compensation of Executive Officers

Summary Compensation Table

In fiscal 2012, the Board approved a change to our fiscal year so that, beginning with fiscal 2013, it ends on the Saturday closest to the end of January in each calendar year instead of the Saturday closest to the end of February. Due to this change, fiscal 2013 was an 11-month fiscal year (March 4, 2012 - February 2, 2013). Therefore, the table below summarizes the total compensation earned by each of our NEOs during fiscal 2013 and, in order to include three full fiscal years of data, fiscal 2012, fiscal 2011 and fiscal 2010, where applicable. Please also note that the fiscal 2013 amounts in the table below include the value of fiscal 2013 equity awards forfeited by Mr. Gillett ($7,461,671), Mr. Muehlbauer ($1,071,314) and Mr. Vitelli ($630,194) due to termination during fiscal 2013.
Name and Principal Position
Year
 

Salary(1)

 
Bonus

 
Stock
Awards(2)

 
Option
Awards(2)

 
Non-Equity
Incentive Plan
Compensation(3)

 
All Other
Compensation(4)

 
Total

Hubert Joly(5)
President and
Chief Executive Officer
2013
 
$
492,596

 
$
3,500,000

(6) 
$
11,801,306

(7) 
$
3,750,002

 
$

 
$
6,788

 
$
19,550,692

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brian J. Dunn(8)
Former Chief Executive Officer
2013
 
$
190,385

 
$

 
$
2,542,569

(9) 
$

 
$

 
$
968,136

 
$
3,701,090

2012
 
1,121,154

 

 
3,632,679

 
2,265,594

 
1,140,000

 
55,532

 
8,214,959

2011
 
1,061,540

 

 

 
3,206,125

 
746,667

 
15,168

 
5,029,500

2010
 
961,541

 

 

 
6,220,000

 
2,996,009

 
54,510

 
10,232,060

George L. Mikan III(10)
Former Interim Chief Executive Officer
2013
 
$
1,345,384

 
$

 
$
1,974,704

 
$

 
$

 
$
373

 
$
3,320,461

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sharon L. McCollam(11)
Executive Vice President - Chief Administrative Officer and Chief Financial Officer
2013
 
$
142,308

 
$
731,250

(12) 
$
2,666,672

(7) 
$
1,333,334

 
$

 
$
38,618

 
$
4,912,182

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
James L. Muehlbauer(13)
Former Executive Vice President - Finance and Chief Financial Officer
2013
 
$
623,077

 
$
500,000

(14) 
$
2,590,092

(7) 
$
385,732

 
$

 
$
1,465,679

 
$
5,564,580

2012
 
687,981

 

 
2,094,390

 
776,775

 
438,750

 
13,935

 
4,011,831

2011
 
662,308

 

 

 
1,172,700

 
290,500

 
16,801

 
2,142,309

2010
 
622,616

 

 

 
1,012,000

 
1,311,450

 
12,145

 
2,958,211

Shari L. Ballard
Executive Vice President and President, International
2013
 
$
646,154

 
$
500,000

(14) 
$
2,307,793

(7) 
$
226,911

 
$

 
$
8,512

 
$
3,689,370

2012
 
713,462

 

 
2,087,692

 
517,850

 
420,000

 
56,961

 
3,795,965

2011
 
680,770

 

 

 
864,835

 
298,958

 
14,928

 
1,859,491

2010
 
650,001

 

 

 
838,075

 
1,365,002

 
67,090

 
2,920,168

Keith J. Nelsen
Executive Vice President - General Counsel,
Chief Risk Officer & Secretary
2013
 
$
444,327

 
$
350,000

(14) 
$
1,791,312

(7) 
$
204,207

 
$

 
$
8,027

 
$
2,797,873

2012
 
338,453

 

 
555,014

 
258,106

 
145,555

 
22,417

 
1,319,545

2011
 
331,071

 

 

 
241,748

 
101,932

 
11,063

 
685,814

2010
 
321,664

 

 

 
265,650

 
290,049

 
15,157

 
892,520

Carol A. Surface(15)
Executive Vice President -
Chief Human Resources Officer
2013
 
$
452,308

 
$
500,000

(14) 
$
2,267,435

(7) 
$
204,207

 
$

 
$