DEF 14A 1 nc10000834x1_def14a.htm DEF 14A

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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.     )

Filed by the Registrant ☒

Filed by a Party other than the Registrant o

Check the appropriate box:

oPreliminary Proxy Statement
oConfidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
oDefinitive Additional Materials
oSoliciting 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)

Payment of Filing Fee (Check the appropriate box):

No fee required.
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BEST BUY CO., INC.
7601 Penn Avenue South
Richfield, Minnesota 55423
 

NOTICE OF 2019 REGULAR MEETING OF SHAREHOLDERS

   

Time:
9:00 a.m., Central Time, on Tuesday, June 11, 2019
Place:
Online at www.virtualshareholdermeeting.com/BBY2019
Internet:
Submit pre-meeting questions online by visiting www.proxyvote.com and attend the Regular Meeting of Shareholders online at www.virtualshareholdermeeting.com/BBY2019
Items of Business:
1.
To elect the thirteen director nominees 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, 2020.
 
3.
To conduct a non-binding advisory vote to approve our named executive officer compensation.
 
4.
To transact such other business as may properly come before the meeting.
Record Date:
You may vote if you were a shareholder of Best Buy Co., Inc. as of the close of business on Monday, April 15, 2019.
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, please vote your shares in one of the ways outlined above.

 
By Order of the Board of Directors
 

Richfield, Minnesota
Todd G. Hartman
May 1, 2019
Secretary

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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
REGULAR MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 11, 2019:
   
This Notice of 2019 Regular Meeting of Shareholders and Proxy Statement and our Annual Report on
Form 10-K for the fiscal year ended February 2, 2019, 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 1, 2019, we mailed or made available 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. Certain 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. 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 e-mail notification with instructions to access these materials via the internet unless you elect otherwise.

ATTENDING THE REGULAR MEETING OF SHAREHOLDERS

Like last year, we invite you to attend the 2019 Regular Meeting of Shareholders (the “Meeting”) virtually. There will not be a physical meeting at the corporate campus. You will be able to attend the Meeting virtually, vote your shares electronically, and submit your questions during the Meeting by visiting: www.virtualshareholdermeeting.com/BBY2019 and following the instructions on your proxy card.
The Meeting starts at 9:00 a.m. Central Time.
You do not need to attend the Meeting online to vote if you submitted your vote via proxy in advance of the Meeting.
You can vote via telephone, the internet or by mail by following the instructions on your proxy card.
A replay of the Meeting will be available on www.investors.bestbuy.com.

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Dear Fellow Shareholders,

On behalf of the entire Board of Directors (the “Board”), we welcome the opportunity to invite you to attend our 2019 Regular Meeting of Shareholders on Tuesday, June 11, 2019.

During this past year, your Board has continued its diligent work in its key areas of responsibility. In the second year of our Best Buy 2020: Building the New Blue growth strategy, we continued to focus our efforts around our purpose to enrich lives through technology and our philosophy to contribute to the common good. We are proud of our accomplishments over the past year, including strong financial performance, significant achievements in our Environmental, Social & Governance initiatives, and the addition of three new Board members. We also just announced an evolution of our leadership roles that we believe will support the long-term success of the Company.

Purpose, Culture & Long-term Value Creation

The Board has continued to be active and engaged in the development and oversight of programs that support our purpose, culture and long-term value creation. During fiscal 2019, this resulted in enhanced benefits for our employees, expansion of our In-Home Advisor program, the nation-wide launch of our Total Tech Support offering, and the acquisition of GreatCall, a leading connected health services provider for aging consumers. We are proud of the performance we achieved, including revenue of $42.9 billion and 4.8 percent enterprise comparable sales growth (on top of 5.6 percent in fiscal 2018). Our total shareholder return for 2016 to 2018 is 125.5 percent, while the average of the S&P 500 is 64.5 percent. Concurrently, we maintained high employee engagement scores and further reduced store turnover rates to record lows.

Environmental, Social & Governance

We seek to apply our sense of corporate responsibility and focus on sustainable development to our interactions with all our stakeholders, including our customers, our employees, our vendor partners, our stockholders, the communities in which we operate and the environment. We are proud that we were recently ranked No. 1 on Barron’s Most Sustainable Companies list and were one of two U.S. retailers named to Ethisphere’s World’s Most Ethical Companies list. The Board continues to be actively involved in our various programs, including the expansion of our Teen Tech Centers across the country.

Board Composition

As a company, we believe diversity and inclusion is important to our employees, customers and shareholders. In support of our strategy and this belief, we are proud of the highly relevant and diverse set of skills we have assembled on our Board over the last several years. We note that our Board is now comprised of six women and six men, and that a third of our Board members are people of color, which makes us a leader in gender and ethnic diversity among public company Boards.

CEO Succession

We recently announced an evolution in leadership roles. After seven years of leading the company, Hubert will transition to the role of Executive Chairman of the Board, effective at the end of our Meeting. At that time, Corie Barry, our Chief Financial and Strategic Transformation Officer, will become Chief Executive Officer. Corie has played a critical role in the development and execution of our proven growth strategy, and we are confident she has the vision, skills, experience and leadership capabilities necessary to be our CEO. At the same time, Mike Mohan, current U.S. Chief Operating Officer, will be promoted to President and Chief Operating Officer. We believe this orderly transition is a tribute to the Board’s attention to succession planning and will ensure great continuity from a strategic and leadership standpoint.

Your feedback is important to us, and we encourage you to vote for the proposals set forth in this proxy statement and participate in our upcoming shareholder meeting.

With gratitude for your confidence and support,
 


Hubert Joly, Chairman & CEO
Russ Fradin, Lead Independent Director

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2019 Proxy Statement
 
 
 

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CAUTIONARY STATEMENT PURSUANT TO THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), provide a “safe harbor” for forward-looking statements to encourage companies to provide prospective information about their companies. With the exception of historical information, the matters discussed in this proxy statement on Form 14A are forward-looking statements and may be identified by the use of words such as “anticipate,” “assume,” “believe,” “estimate,” “expect,” “intend,” “foresee,” “outlook,” “plan,” “project” and other words and terms of similar meaning. Such statements reflect our current view with respect to future events and are subject to certain risks, uncertainties and assumptions. A variety of factors could cause our future results to differ materially from the anticipated results expressed in such forward-looking statements. Readers should review Item 1A, Risk Factors, of our Annual Report on Form 10-K for a description of important factors that could cause our future results to differ materially from those contemplated by the forward-looking statements made in this proxy statement on Schedule 14A. Our forward-looking statements speak only as of the date of this proxy statement or as of the date they are made, and we undertake no obligation to update our forward-looking statements.

 
 
 
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At our 2019 Regular Meeting of Shareholders, we are asking shareholders to vote on three key items. This section highlights information contained in other parts of this proxy statement. We encourage you to review the entire proxy statement for more detail on these items, as well as our Annual Report and our Chairman and CEO’s Letter to Shareholders posted on our website at www.investors.bestbuy.com.

Items of Business for Vote at our Regular Meeting of Shareholders

This year, we are requesting your support for the following Items of Business:

Item
Number
Item Description
Board Recommendation
1
Election of Directors
FOR Each
Nominee
 
We have thirteen director nominees standing for election this year. More information about our nominees’ qualifications and experience can be found starting on page 21.
 
2
Ratification of Appointment of our Independent Registered Public Accounting Firm
FOR
 
We are asking our shareholders to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2020, as described on page 42.
 
3
Advisory Vote to Approve our Named Executive Officer Compensation
FOR
 
We are seeking, in an advisory capacity, approval by our shareholders of our named executive officer compensation, the “Say on Pay” vote. Our Compensation Discussion & Analysis (“CD&A”), which begins on page 45, describes our executive compensation programs and decisions for fiscal 2019.
 

Attending the Meeting

How will the Meeting be conducted?

The Meeting will be conducted online, in a fashion similar to an in-person meeting. All of our board members and executive officers will attend the Meeting and be available for questions. You may attend the Meeting online, vote your shares electronically, and submit your questions during the Meeting by visiting our virtual shareholder forum at: www.virtualshareholdermeeting.com/BBY2019 and following the instructions on your proxy card.

How can I ask questions during the Meeting?

Questions may be submitted prior to the Meeting or you may submit questions in real time during the Meeting through our virtual shareholder forum. We are committed to acknowledging each question we receive. We will allot approximately 15 minutes for questions during the Meeting and submitted questions should follow our Rules of Conduct in order to be addressed during the Meeting. Our Rules of Conduct are posted on the forum.

What can I do if I need technical assistance during the Meeting?

If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting log-in page.

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If I can’t attend the Meeting, can I vote or listen to it later?

You do not need to attend the online Meeting to vote if you submitted your vote via proxy in advance of the meeting. A replay of the Meeting, including the questions answered during the meeting, will be available on www.investors.bestbuy.com.

Additional information about how to vote your shares and attend our Meeting can be found in the General Information section of this proxy statement.

Corporate Governance

Our long-standing approach to corporate governance is to develop and implement principles that: (1) enable the success of our strategy and business objectives; (2) are rooted in a robust ongoing dialogue with our shareholders; and (3) are inspired by best practices. Consistent with this approach, we continue to build upon a strong framework of corporate governance policies and practices, including the following:

Board Structure
 
 
Lead Independent Director
All Independent Committees
Annual Director Elections
No Director Related Party Transactions
Robust Annual Board Evaluation Process
Director Overboarding Policy
Majority Vote for Directors
Director Retirement Policy
 
 
 
 
Shareholder Rights
Compensation
No Cumulative Voting Rights
Pay for Performance Compensation Programs
No Poison Pill
Annual Say-on-Pay Vote
Proxy Access By-laws
Anti-hedging and -pledging Policies
No Exclusive Forum/Venue or Fee-Shifting Provisions
Clawback Policy for both Cash and Equity Awards

The Board seeks a wide range of experience and expertise from a variety of industries and professional disciplines in its directors and carefully assesses and plans for the director skill sets, qualifications and diverse perspectives required to support the Company’s long-term strategic goals. Our slate of director nominees reflects the strong results of these efforts.


 
 
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Additional information on our Corporate Governance policies and practices can be found in the Corporate Governance at Best Buy section of this proxy statement.

Environment, Social & Governance

Our Board, with oversight by the Nominating, Corporate Governance and Public Policy Committee, is integrally involved in the Company’s environmental, social and governance (“ESG”) initiatives. We are an organization built upon values-driven leadership and we are focused on our purpose to enrich lives through technology. When we began the Renew Blue stage of our transformation strategy in 2012, we identified five strategic pillars focused on the needs and interests of our stakeholders – our customers, employees, vendor partners, shareholders, and communities. These five stakeholders continue to be our motivation today. We are honored that our commitment to and progress in effecting positive change for our stakeholders has been recognized within the corporate community.


Additional information regarding our purpose and programs relating to our ESG efforts can be found in the Corporate Governance at Best Buy — Environment, Social & Governance section of this proxy statement.

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Item 1: Election of Directors

The following individuals are standing for election to our Board. The Board recommends a vote FOR each of the nominees. All nominees, with the exception of Ms. Barry, are current members of the Board. Ms. Barry’s appointment is in conjunction with her appointment as our CEO, which is effective at the end of the Meeting.

 
 
 
 
Committee Membership(1)
Name
Director
Since
Most Recent Employer
Independent
AC
CC
FC
NC
Corie S. Barry
Chief Financial Officer & Strategic Transformation Officer; CEO-elect,
Best Buy Co., Inc.
No
 
 
 
 
Lisa M. Caputo
2009
Executive Vice President, Chief Marketing & Communications Officer,
The Travelers Companies, Inc.
Yes
 
 
J. Patrick Doyle(2)
2014
President & CEO (Former),
Domino’s Pizza, Inc.
Yes
 
 
 
 
Russell P. Fradin(3)
2013
Operating Partner,
Clayton, Dubilier & Rice
Yes
 
 
 
Kathy J. Higgins Victor
1999
President & Founder,
Centera Corporation
Yes
 
 
C
Hubert Joly
2012
Chairman & CEO,
Best Buy Co., Inc.
No
 
 
 
 
David W. Kenny
2013
CEO,
Nielsen
Yes
 
C
 
Cindy R. Kent
2018
President & GM, Infection Prevention Division, (Former)
3M
Yes
 
 
 
Karen A. McLoughlin
2015
Chief Financial Officer,
Cognizant Technology Solutions Corp.
Yes
 
C
 
Thomas L. Millner
2014
CEO (Former),
Cabela’s Inc.
Yes
C
 
 
Claudia F. Munce
2016
Venture Advisor,
New Enterprise Associates
Yes
 
 
Richelle P. Parham
2018
General Partner,
Camden Partners Holdings, LLC
Yes
 
 
 
Eugene A. Woods
2018
CEO,
Atrium Health
Yes
 
 
 
(1)Reflects committee membership approved in April 2019, effective following the Meeting.
(2)Mr. Doyle will serve as Lead Independent Director, effective after the Meeting.
(3)Mr. Fradin currently serves as our Lead Independent Director.

Key: AC = Audit Committee; CC = Compensation & Human Resources Committee; FC = Finance & Investment Policy Committee; NC = Nominating, Corporate Governance & Public Policy Committee √ = Member; C = Chair

Additional information about each of our nominees and director qualification and nomination process can be found in Item of Business No. 1 — Election of Directors.

Item 2: Appointment of Independent Registered Public Accounting Firm

The Board recommends a vote FOR ratification of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending February 1, 2020.

Deloitte & Touche LLP (“D&T”) served as our auditors for fiscal 2019. Our Audit Committee has selected D&T to audit our financial statements for fiscal 2020 and is submitting its selection of our independent registered public accounting firm for ratification by the shareholders in order to ascertain the view of our shareholders on this selection. The following table summarizes the aggregate fees incurred for services rendered by D&T during fiscal 2019 and fiscal 2018. Additional information can be found in Item of Business No. 2 — Ratification of Appointment of our Independent Registered Public Accounting Firm.

Service Type
Fiscal 2019
Fiscal 2018
Audit Fees
$
2,912,000
 
$
2,770,000
 
Audit-Related Fees
 
654,000
 
 
334,000
 
Tax Fees
 
 
 
 
Total Fees
$
3,566,000
 
$
3,104,000
 
 
 
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Item 3: Say-on-Pay: Advisory Vote to Approve Named Executive Officer Compensation

The Board recommends a vote FOR approval of our named executive officer compensation.

Our shareholders have consistently strongly supported our executive compensation program. For the last five years, our average Say-on-Pay vote has been 96.8%. We believe this support reflects our strong pay-for-performance philosophy, our commitment to sound compensation policies, and our active engagement and open dialogue with our shareholders. The Compensation Committee regularly takes feedback received from shareholders into consideration when making decisions regarding our executive compensation program.

Our executive compensation program contains the following elements:

Compensation Component
Key Characteristics
Purpose
Base Salary
Cash
Provide competitive, fixed compensation to attract and retain executive talent.
Short-Term Incentive
Cash award paid based on achievement of various performance metrics
Create a strong financial incentive for achieving or exceeding Company performance goals.
Long-Term Incentive
Stock options, performance-conditioned time-based restricted shares, and performance share awards
Create a strong financial incentive for increasing shareholder value, encouraging ownership stake, and promote retention.

Pay is tied to performance. The majority of executive compensation is not guaranteed and is based on performance metrics designed to drive shareholder value.


Additional information can be found in Item of Business No. 3 — Advisory Vote to Approve Named Executive Officer Compensation and the Compensation Discussion and Analysis sections of this proxy statement.

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

PROXY STATEMENT

REGULAR MEETING OF SHAREHOLDERS — JUNE 11, 2019

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 2019 Regular Meeting of Shareholders (the “Meeting”) to be held virtually on Tuesday, June 11, 2019, at 9:00 a.m., Central Time, at www.virtualshareholdermeeting.com/BBY2019 or at any postponement or adjournment of the Meeting. On, or about May 1, 2019, we mailed or made available our proxy materials, including the proxy statement, our Annual Report and form of proxy or the Notice of Internet Availability.

Background

What is the purpose of the Meeting?

At the Meeting, shareholders will vote on the items of business outlined in the Notice of 2019 Regular Meeting of Shareholders (“Meeting Notice”) included as the cover page to this proxy statement. In addition, management will provide a brief update 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 card or the Notice of Internet Availability because you owned shares of Best Buy common stock as of April 15, 2019, 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.

How can I attend the Meeting?

You can attend the meeting online by logging on to www.virtualshareholdermeeting.com/BBY2019 and following the instructions provided on your proxy or notice card.

How will the Meeting be conducted?

The Meeting will be conducted online, in a fashion similar to an in-person meeting. All of our board members and executive officers will attend the Meeting and be available for questions. You will be able to attend the Meeting online, vote your shares electronically, and submit your questions during the Meeting by visiting our virtual shareholder forum at: www.virtualshareholdermeeting.com/BBY2019 and following the instructions on your proxy card.

How can I ask questions during the Meeting?

Questions may be submitted prior to the Meeting through our virtual shareholder forum at www.virtualshareholdermeeting.com/BBY2019, or you may submit questions in real time during the meeting through the forum. We are committed to acknowledging each question we receive. We will allot approximately 15 minutes for questions during the Meeting and submitted questions should follow our Rules of Conduct for the meeting in order to be addressed during the Meeting. Our Rules of Conduct are posted on the forum.

What can I do if I need technical assistance during the Meeting?

If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual shareholder meeting log-in page.

 
 
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If I can’t attend the Meeting, how do I vote or listen to it later?

You do not need to attend the online Meeting to vote if you submitted your vote via proxy in advance of the meeting. A replay of the Meeting, including the questions answered during the meeting, will be available on www.investors.bestbuy.com.

Who may vote?

In order to vote at the Meeting, you must have been a shareholder of record of Best Buy as of April 15, 2019, 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 bank, broker or nominee 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 15, 2019, as the record date for the Meeting.

How many shares of Best Buy common stock are outstanding?

As of the record date, there were 267,916,309 shares of Best Buy common stock outstanding. There are no other classes of capital stock outstanding.

Voting Procedures

On what items of business am I voting?

1.The election of the 13 director nominees listed herein for a term of one year expiring in 2020;
2.The ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending February 1, 2020;
3.The non-binding advisory vote to approve our named executive officer compensation; and
4.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 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, 2020; and
“FOR” the non-binding advisory vote to approve our named executive officer compensation.

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 mail, by signing and returning the enclosed proxy card if you have received paper materials; or
By attending the virtual Meeting and voting online at www.virtualshareholdermeeting.com/BBY2019.

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.

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If you wish to vote by telephone or via the internet, you must do so before 11:59 p.m., Eastern Time, on Monday, June 10, 2019. After that time, telephone and internet voting on www.proxyvote.com will not be permitted and any shareholder of record wishing to vote thereafter must vote online during the Meeting. Shareholders of record will be verified online by way of the personal identification number included on your proxy or notice card. Voting by a shareholder during the Meeting will replace any previous votes submitted by proxy.

We have made all proxy materials available 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 most 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, Hubert Joly and the Secretary of the Company, Todd G. Hartman (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. In order to have a quorum, a majority of the outstanding shares of our common stock that are entitled to vote need to be present or represented by proxy at the Meeting. Your shares will be counted as present at the Meeting if you:

Vote prior to the Meeting via the internet or by telephone;
Properly submit a proxy card (even if you do not provide voting instructions); or
Vote while attending the Meeting online.

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 (“Articles”) and our Amended and Restated By-laws (“By-laws”), each item of business to be voted on by the shareholders at the Meeting, with the exception of Item 1, 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.

Under the rules of the New York Stock Exchange (“NYSE”), if you are a beneficial owner of shares and you do not provide voting instructions to your broker, bank or nominee, that firm has discretion to vote your shares for certain routine matters. Item 2, the ratification of the appointment of Deloitte & Touche LLP as our independent registered

 
 
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public accounting firm, is considered a routine matter under NYSE rules. However, your broker, bank or nominee does not have discretion to vote your shares for non-routine matters. Items 1 and 3, the election of directors and the advisory vote related to named executive officer compensation, respectively, 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 and 3 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.

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 online during the Meeting (attendance will not, by itself, revoke a proxy); or
Providing written notice of revocation to Best Buy’s Secretary at our principal office at any time before your shares are voted.

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.

Who will count the vote?

Representatives of Broadridge will tabulate the vote and act as the inspector of elections.

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. as our proxy solicitor for a fee estimated to be $15,000, 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. We will reimburse brokerage firms, banks and other representatives of shareholders for reasonable expenses incurred as defined in the NYSE schedule of charges in connection with proxy solicitations.

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

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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.

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 Annual 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.

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 find these reports and additional information about us on our website at www.investors.bestbuy.com.

 
 
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CORPORATE GOVERNANCE AT BEST BUY

Our Board is committed to developing and implementing corporate governance principles that: (1) enable the success of our strategy and business objectives; (2) are rooted in a robust ongoing dialogue with our shareholders; and (3) are inspired by best practices. Consistent with this approach, we continue to build upon a strong framework of corporate governance practices. Shareholder perspectives play an important role in that process. Some key aspects of our current Board and governance structure and practices are as follows:

Board Leadership & Composition
Our Board has been led by our Chairman and CEO. Our Lead Independent Director ensures independent oversight of management whenever our Chairman is not independent. Going forward, our Board will be led by our Executive Chairman and Lead Independent Director.
All of our director nominees, other than the CEO- and Executive Chairman-elect, are independent.
Our Board places an emphasis on diverse representation among its members. Seven of our 13 director nominees are women and one-third of our Board is ethnically diverse.
The average tenure of our director nominees is approximately 5 years, with a balance of skills, new perspectives and historical knowledge.
All Committees are comprised exclusively of independent directors.
Our directors are required to retire at the expiration of their term during which they reach the age of 72, and must tender their resignation for consideration: (a) five years after ceasing the principal career they held when they joined our Board and (b) when their principal employment, public company board membership or other material affiliation changes.
Board Accountability
We conduct a robust annual Board, individual director and CEO evaluation process, and periodically engage an independent third party to provide independent assessments of Board and director performance.
None of our directors are involved in a material related party transaction.
Our directors and officers are prohibited from hedging and pledging Company securities.
Our directors and executive officers are required to comply with stock ownership guidelines.
Our Board has adopted Corporate Governance Principles as part of its commitment to good governance practices. These principles are available on our website at www.investors.bestbuy.com.
Shareholder Rights & Engagement
We do not have a shareholder rights plan (commonly known as a “Poison Pill”).
We have proxy access provisions consistent with market practice (3/3/20/20).
We have no exclusive forum/venue or fee-shifting provisions.
We have no cumulative voting rights and our only class of voting shares is our common stock.
A shareholder(s) must own 10% of the voting shares of our stock to call a special meeting, or 25% if the special meeting relates to a business combination or change in our Board composition.
We regularly engage with shareholders to solicit feedback, address questions and concerns and provide perspective on Company policies and practices.

In this section of our proxy statement, we provide detail on specific aspects of our Corporate Governance program, policies and practices, as well as additional information on the operations and composition of our Board.

Board Leadership

Our Board has been led by our Chairman and CEO, Mr. Joly, and our Lead Independent Director, Mr. Fradin. Our Lead Independent Director complements our Chairman by providing effective, independent leadership on the Board through clearly defined authority. Additional leadership roles continue to be filled by other directors, all of whom are independent and play an active role in our strategic planning, risk oversight and governance. We believe this leadership structure is ideally suited to this stage of our Company. As part of our CEO succession, Mr. Joly will transition to the role of Executive Chairman at the end of the Meeting, with substantially similar responsibilities as those set forth below. The independent directors believe that Mr. Joly’s continued leadership of the Board will provide a valuable resource to the Board and will help facilitate a smooth transition of the CEO role.

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Our Lead Independent Director is nominated by the Nominating, Corporate Governance and Public Policy Committee, and final selection is subject to ratification by the vote of a majority of the independent directors on the Board. The Lead Independent Director serves for an annual term beginning at the Board meeting following the first regular meeting of shareholders at which directors are elected. In April 2019, the Board appointed Mr. Doyle to succeed Mr. Fradin as Lead Independent Director, effective at the Meeting.

The Board leadership duties and responsibilities are outlined below and in our Corporate Governance Principles, which are also posted online at www.investors.bestbuy.com.

Our Chairman is responsible for:

Setting the agenda for Board meetings (in partnership with the CEO and Lead Independent Director) and presiding over and leading discussion at meetings of the full Board;
Presiding over the Company’s regular meeting of shareholders;
Setting the Board meeting calendar and leading oversight activities of the Board;
Overseeing the Company’s strategic planning process to create alignment with the Board and management and supporting execution of the strategy;
Assisting the Board with its oversight of the Company’s risks;
Speaking on behalf of the Company to both internal and external stakeholders, as appropriate; and
Serving as the Board’s liaison to management.

Our Lead Independent Director performs the following duties:

Partners with the Chairman (and CEO) to set the Board meeting agenda;
Presides at all Board meetings at which the Chairman is not present;
Presides at executive sessions of independent directors (which take place at each regular Board meeting);
Calls additional meetings of the independent directors, as appropriate;
Serves as a liaison between the independent directors and our stakeholders by being available for direct consultation and communication;
Provides ongoing counsel to the Chairman regarding key items of business and overall Board functions; and
Performs any other duties requested by the Board, the independent directors or the Chairman.

Board Composition

The Board seeks a wide range of experience and expertise from a variety of industries and professional disciplines in its directors. It carefully assesses the director skill sets, qualifications and diverse perspectives required to support the Company’s long-term strategic goals, and for an orderly succession and transition of directors, as evidenced by the composition changes over the past seven years. We believe our Board should be composed of individuals with highly relevant skills, independence, integrity, sound judgment, proven records of accomplishments and diverse genders, ethnicities, ages and geographic locations. In addition, the Board emphasizes independent voices and adding new perspectives to its membership. Eleven of our 13 director nominees are independent, and the average tenure of our director nominees is 5 years. More information regarding our Director Qualification Standards and Director Nomination Process can be found within Item 1 of this proxy statement.

Director Independence

Pursuant to our Corporate Governance Principles, the Board has established independence standards consistent with the requirements of the SEC and NYSE. 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, each member of the Compensation and Human Resources Committee must meet a standard of “enhanced independence” such that the Board must consider the source of compensation of the director and whether the director is affiliated with us or one of our subsidiaries to determine whether there are any factors that would materially affect a director’s ability to be independent, specifically in regard to their duties as a compensation committee member.

 
 
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Our Director Independence Guidelines, consistent with the 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;
personally worked on (or whose immediate family member has personally worked on) our audit as a partner or an employee of our internal or external 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, exceeded 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 fiscal 2019 and each director nominee is independent, with the exception of Mr. Joly, our Chairman and CEO, and Ms. Barry, our Chief Financial Officer and Strategic Transformation Officer. Ms. Barry was nominated to stand for election to the Board in connection with her appointment as our new CEO, effective at the Meeting. 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.

As part of its independence analysis, the Board reviewed our relationships with companies with which our directors are affiliated. As part of that review, the Board considered our relationship with Nielsen, a company affiliated with Mr. Kenny. Mr. Kenny, a director since September 2013, serves as CEO and a director of Nielsen. Since 1999, Nielsen has provided us with data analytics services. The amounts we have paid to Nielsen were less than 2% of the annual consolidated gross revenues of Nielsen for each of the past three fiscal years. In addition, Mr. Kenny did not influence or participate in negotiating our agreements with Nielsen. The Board determined that the Company’s relationship with Nielsen was not material and did not impair Mr. Kenny’s independence.

In addition, the Board also considered our relationship with Cognizant Technology Solutions Corp., which has provided us with information technology and business solution services since 2017. Ms. McLoughlin, a director since September 2015, is the Chief Financial Officer of Cognizant. The amounts paid to Cognizant were less than 2% of Cognizant’s annual consolidated gross revenues for the past three fiscal years. Ms. McLoughlin did not influence or participate in negotiating our agreements with Cognizant. The Board determined that the Company’s relationship with Cognizant was not material and did not impair Ms. McLoughlin’s independence.

Board Meetings and Attendance

During fiscal 2019, the Board held four regular meetings and one special meeting. Each incumbent director attended, in person or by telephone, 100 percent of the meetings of both the Board and committees on which he or she served. Directors are required to attend our regular meetings of shareholders, and all of our director nominees that were then directors attended the 2018 Meeting either in-person or telephonically.

Executive Sessions of Independent Directors

Our independent directors, led by Mr. Fradin, meet in executive sessions of independent directors during each regularly scheduled Board meeting. Independent directors use these sessions as a forum for open discussion about the Company, our senior management, and any other matters they deem appropriate.

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Committees of the Board

The Board has four committees: Audit, Compensation and Human Resources (the “Compensation Committee”), Finance and Investment Policy, and Nominating, Corporate Governance and Public Policy (the “Nominating Committee”). The charters for each committee are posted on our website at www.investors.bestbuy.com. The charters are reviewed annually and 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 as defined under the SEC and NYSE rules, and all members of the Compensation Committee are “outside directors” for purposes of Internal Revenue Code section 162(m). The Board has also determined that, during fiscal 2019, two of the four members of the Audit Committee qualified as audit committee financial experts under SEC rules, and that each of the members of the Audit Committee has accounting and related financial management expertise in accordance with the NYSE listing standards.

The key responsibilities, fiscal 2019 membership and number of meetings held in fiscal 2019 for each committee are set forth below:

Committee
Key Responsibilities
Committee
Members
Number of
Meetings
held in
Fiscal 2019
Audit
Assists the Board in its oversight of:
Thomas L.
Millner*†
Karen A.
McLoughlin†
Claudia F.
Munce
Richelle P.
Parham
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the integrity of our financial statements and financial reporting processes;
 
our internal accounting systems and financial and operational controls;
 
the qualifications and independence of our independent registered public accounting firm;
 
the performance of our internal audit function and our independent registered public accounting firm; and
 
our legal compliance and ethics programs, including our legal, regulatory and risk oversight requirements, and the major risks facing the Company (including risks related to finance, operations, privacy and cyber-security), related party transactions and our Code of Business Ethics.
Is responsible for the preparation of a report as required by the SEC to be included in this proxy statement.
Compensation & Human Resources
Determines executive officer compensation and executive officer and director compensation philosophies, evaluates the performance of our CEO, approves CEO and executive officer compensation, and oversees preparation of a report as required by the SEC to be included in this proxy statement.
Russell P. Fradin*
Lisa M. Caputo
J. Patrick
Doyle
Kathy J.
Higgins
Victor
5
Reviews and recommends director compensation for Board approval.
Is responsible for succession planning and compensation-related risk oversight.
Approves and oversees the development and evaluation of equity-based and other incentive compensation and certain other employee benefit plans.
 
 
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Committee
Key Responsibilities
Committee
Members
Number of
Meetings
held in
Fiscal 2019
Finance & Investment Policy
Provides oversight of, and advises the Board regarding, our financial policies and financial condition to help enable us to achieve our long-range goals.
J. Patrick Doyle*
David W. Kenny
Karen A.
McLoughlin
Claudia F. Munce
4
Oversees, 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.
Is responsible for approving certain significant contractual obligations.
Nominating, Corporate Governance & Public Policy
Identifies and recommends director nominees, reviews and recommends corporate governance principles to the Board, and oversees the evaluation of the performance of the Board and its committees.
Kathy J. Higgins Victor*
Lisa M.
Caputo
David W.
Kenny
Thomas L. Millner
4
Assists the Board with general corporate governance, including Board organization, membership, training and evaluation.
Oversees public policy and corporate responsibility and sustainability matters that affect us.
*Chair
Designated as an “audit committee financial expert”

In March 2019, Ms. Kent was appointed to the Finance & Investment Policy Committee, and in April 2019, the Board approved several changes to the committee composition, effective following the Meeting. At that time, the committees will be comprised of the following individuals and Mr. Doyle will serve as Lead Independent Director:

   

Committee
Committee Membership (Eff. June 2019)
 
•   Thomas L. Millner*†
•   Claudia F. Munce
Audit
•   Karen A. McLoughlin†
•   Richelle P. Parham
 
•   David W. Kenny*
•   Russell P. Fradin
Compensation & Human Resources
•   Lisa M. Caputo
•   Kathy J. Higgins Victor
 
•   Karen A. McLoughlin*
•   Claudia F. Munce
Finance & Investment Policy
•   Cindy R. Kent
•   Eugene A. Woods
 
•   Kathy J. Higgins Victor*
•   David W. Kenny
Nominating, Corporate Governance & Public Policy
•   Lisa M. Caputo
•   Thomas L. Millner
*Chair
Designated as an “audit committee financial expert”
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Board Risk Oversight

In addition to its responsibilities as set forth above, the Board and its committees take an active role in the oversight of various risks to the Company. These risk oversight responsibilities are set forth below.


The Audit Committee also oversees management’s processes to identify and quantify the material risks that we face. Our Chief Risk and Compliance Officer is a direct liaison to the Audit Committee on our risk oversight processes and procedures. In connection with its risk oversight role, the Audit Committee meets privately with representatives of our independent registered public accounting firm, the Chief Risk and Compliance Officer, our internal audit staff and our legal staff. Our internal audit staff, which reports directly to the Audit Committee at least quarterly, assist management in identifying, evaluating and implementing controls and procedures to address identified risks.

Compensation Risk Assessment

In connection with their oversight of compensation-related risks, Compensation Committee members annually 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. As in past years, the review process in fiscal 2019 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 performance periods, payment for outputs, goal diversification, stock ownership guidelines, payment caps, and our clawback policy.

 
 
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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 the Company.

Board Evaluation Process

Our Nominating Committee oversees the Board’s composition, effectiveness, accountability and evaluation of the performance of the Board, its committees and individual directors. On an annual basis, members of the Board complete a questionnaire evaluating the performance of the Board as a whole, each member’s respective committee and the performance of the Chairman and Lead Independent Director. Directors are asked about roles and responsibilities, as well as more general performance-related questions. The Nominating Committee reviews the results of these questionnaires and determines whether the results warrant any action. The results and any proposed actions are then shared with the full Board for further discussion and approval of final action plans.

In addition, the Chair of our Nominating Committee, the Board Chairman and the Lead Independent Director review each individual director’s contributions to the Board during the past year and his or her performance against the director qualification standards and Board needs. The Nominating Committee also annually reviews the skills and qualifications of each Board member and the strategic goals of the Company to determine whether the skill sets of the individual directors on the Board continue to support the Company’s long-term strategic goals. This process is utilized by the Nominating Committee to assess whether a director should continue to serve on the Board and stand for re-election at the next Regular Meeting of Shareholders and to otherwise address Board composition needs.

In addition to the process described above, the Nominating Committee engaged an independent third-party consultant in 2016 to conduct individual interviews with each director and certain senior executives and perform a comprehensive analysis of the Board’s overall effectiveness. The Committee anticipates utilizing this approach periodically to obtain independent assessments of the Board’s performance and has engaged an independent third party to conduct an evaluation of the Board’s effectiveness in 2019.

CEO Evaluation Process

Our Compensation Committee conducts a robust annual CEO evaluation process, consisting of both a performance review and a compensation analysis. The performance evaluation component includes an assessment of the Company’s performance in light of set objectives, personal interviews with the individual Board members and the CEO’s direct reports, and feedback evaluations provided by several individuals who interact with the CEO. Separately, the Compensation Committee’s compensation consultant conducts extensive market research. CEO compensation market data is collected from Fortune 100 companies, our peer group, and a retail-industry focused subset of our peer group, to ensure both market competitiveness and appropriateness of our CEO’s compensation relative to his peers. The Compensation Committee’s independent consultant reviews the market data and provides its recommendations to the Compensation Committee. Once all of the relevant performance and compensation data has been collected, the Compensation Committee meets in executive session to discuss the CEO performance evaluation results and CEO compensation. After reviewing all of the collected data regarding performance, the Compensation Committee makes its decision regarding CEO compensation for the forthcoming year. The Compensation Committee then provides its final assessment on CEO performance and decision regarding CEO compensation to the Board for discussion during executive session. Our Chairman and CEO abstains from participating in all related discussions of the Compensation Committee and Board prior to delivery of the final assessment.

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, policies, principal officers, internal auditors and our independent registered public accounting firm. The orientation also addresses Board procedures, director responsibilities, our Corporate Governance Principles and our Board committee charters. Each of our new directors attended a director orientation following their appointment.

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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.

In fiscal 2019, the Board conducted its annual continuing education seminar for the full Board in June 2018, focusing on culture as a corporate asset.

Anti-Hedging and Anti-Pledging Policies

Our executive officers and Board members are prohibited from pledging Company securities as collateral for a loan or from holding Company securities in a margin account. In addition, all employees and Board members are prohibited from hedging Company securities, including by way of forward contracts, equity swaps, collars, exchange funds or otherwise.

Director Stock Ownership

Our stock ownership guidelines require each of our non-management directors to own 10,000 shares and to hold 50 percent of their granted equity until that ownership target is met. Directors are required to hold all restricted stock units granted to them during their Board tenure until their service on the Board ends. In fiscal 2019, all of our non-management directors were in compliance with the ownership guidelines. Our stock ownership guidelines for executive officers are discussed in the Executive and Director Compensation — Compensation Discussion and Analysis — Executive Compensation Elements — Other Compensation section.

Shareholder Engagement

A key part of our corporate governance program is our annual shareholder engagement process. We regularly engage with our shareholders on a variety of topics throughout the year to ensure we are addressing their questions and concerns, to seek input and to provide perspective on Company policies and practices. Our typical engagement follows a seasonal cycle, as outlined below.


 
 
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We have taken several actions in prior years in consideration of shareholder feedback elicited during this process, including: adoption of proxy access, declassification of our Board, the determination to hold the advisory vote on our executive compensation on an annual basis, adjustments to the director appointments on our Board committees, and the development of our corporate social responsibility program and reporting. We also continue to facilitate direct shareholder communication with management and members of our Board and the ability to easily access and obtain information regarding our Company on our website at www.investors.bestbuy.com. Please see the Executive and Director Compensation — Introduction section for more information regarding actions taken as a result of shareholder feedback received regarding our prior year’s executive compensation decisions.

Environment, Social & Governance

We take our role in corporate social responsibility and sustainability seriously, aiming to positively impact people, communities and the environment and contribute to the common good. We believe businesses exist to deliver value to society, not just to shareholders. Simply put, we aim to do well by doing good.

Here are a number of ways that we reflect this approach in the management of the Company’s corporate social responsibility and sustainability initiatives:

Company Strategy. We have anchored our strategy around a clear purpose of enriching people’s lives through technology. We think that having our employees focused on our purpose and matching it to their individual purpose is a key driver of both performance and sustainability.

Employee Engagement & Diversity. We invest in the long-term development and engagement of our employees by aspiring to have an increasingly diverse workforce and inclusive environment, robust training and development programs and a culture where our people can thrive. We ranked third in the world for employee training and development by Training Magazine and our employees completed 22 million online learning modules last year. We also received a perfect score of 100 in the Human Rights Campaign Foundation’s Corporate Equality Index for the fourteenth year.

Vendor Partners. We partner with our private label suppliers to ensure they meet our expectations for safe workplaces where workers are treated fairly. We perform audits, led by either us or third parties, to identify gaps between factory performance and our Supplier Code of Conduct, which is aligned with the code established by the Responsible Business Alliance, where we’ve been a member since 2011. We also provide supplier training and assist in program development to support best practices in relation to conflict minerals, customs and trade anti-terrorism measures and factory working conditions.

Environment. We are reducing our impact on the environment and are proud of our efforts in this area. We have lowered our carbon emissions by more than 51 percent and are on our way to a 60 percent reduction by 2020. In fact, we were recently named the most sustainable company in the United States by Barron’s. Also, we were named to CDP’s Carbon A List, for leadership in carbon reduction and management, for the third time. Recycling is a key part of our sustainability efforts as we operate the most comprehensive recycling service in the U.S. We repair nearly 5 million customer electronic products each year and have collected nearly 2 billion pounds of electronics and appliances for recycling since 2009. We are committed to providing an assortment of sustainable technology, including ENERGY STAR® certified products, and have helped customers realize nearly $800 million in utility savings since 2009.

Community. We are committed to helping prepare teens from underserved communities for tech-reliant jobs. We are accomplishing this through the creation and operation of 29 Best Buy Teen Tech Centers (year-round after school programs), with plans to expand to more than 60 centers by 2020; career mentoring and internship opportunities through our Career Pathways Program; and, the hosting of Geek Squad Academy events (free, interactive technology camps) across the country. Our employees also volunteer more than 100,000 hours each year, and Best Buy was the top fundraiser for St. Jude Children’s Research Hospital during this year’s Thanks and Giving campaign, raising $20.8 million in employee and customer donations. We are proud to have raised more than $80 million in total for St. Jude since 2013.

Our Code of Ethics and additional information regarding these initiatives and our progress towards them can be found in our annual Corporate Responsibility and Sustainability report, available at www.investors.bestbuy.com, and at https://corporate.bestbuy.com under “Sustainability.”

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Public Policy

As a major corporation and corporate citizen, we believe that it is important to work with policymakers on issues impacting our customers, employees, businesses, shareholders and communities. We know that collaboration helps bring about change that better serve our industry and the communities where we live and work. In fiscal 2019, our public policy priorities included: tariffs/fair trade practices; marketplace fairness; competitive workplace; privacy, data security and the internet of things; and fair competition through emerging technologies and innovation. More information about these priorities, as well as our annual political activity reports and related policies, can be found at https://corporate.bestbuy.com under “Government Affairs.”

Communications with the Board

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

Mr. Todd G. Hartman
General Counsel, Chief Risk & Compliance Officer and Secretary
Best Buy Co., Inc.
7601 Penn Avenue South
Richfield, Minnesota 55423

Mr. Hartman 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. Hartman 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.

Corporate Governance Website

If you would like additional information about our corporate governance practices, you may view the following documents at www.investors.bestbuy.com under “Corporate Governance” section.

Amended and Restated Articles of Incorporation
Amended and Restated By-laws
Corporate Governance Principles
Audit Committee Charter
Compensation and Human Resources Committee Charter
Finance and Investment Policy Committee Charter
Nominating, Corporate Governance and Public Policy Committee Charter
Code of Business Ethics
Best Buy Co., Inc. Amended & Restated 2014 Omnibus Incentive Plan
Policy for Shareholder Nomination of Candidates to Become Directors of the Company
Process for Communication with the Board
 
 
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ITEM OF BUSINESS NO. 1 — ELECTION OF DIRECTORS

General Information

Our By-laws provide that our Board consist of one or more directors and 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. The number of directors on our Board is reviewed and set by our Board no less often than annually. In April 2019 in connection with our CEO succession announcement, the Board set the number of directors at thirteen, effective 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.

Director Nomination Process

The Nominating Committee is responsible for screening and recommending to the full Board director candidates for nomination. When the Board and its Nominating Committee determines that a director nomination or search is necessary, the process is robust, thorough and deliberate.


Ms. Kent and Mr. Woods, who were appointed by the Board in September and December 2018, respectively, were presented to the Nominating and Governance Committee by a third-party search firm as part of the Nominating Committee’s director search. After reviewing Ms. Kent and Mr. Woods’ qualifications, meeting with them several times and discussing their potential nominations, the Nominating Committee voted unanimously to recommend Ms. Kent and Mr. Woods to the Board, which unanimously approved the appointments.

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The Nominating Committee will consider director candidates nominated by shareholders. Shareholder nominations must be accompanied by a candidate resume that 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. Todd G. Hartman
General Counsel, Chief Risk &Compliance Officer and Secretary
Best Buy Co., Inc.
7601 Penn Avenue South
Richfield, Minnesota 55423

Director Qualification Standards

In seeking new board members, our objective is to identify and retain directors that can effectively develop the Company’s strategy and oversee management’s execution of that strategy. 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.

As part of its annual evaluation process for director nominees, the Nominating Committee considers other criteria, including the candidate’s history of achievement and superior standards, ability to think strategically, willingness to share examples based upon experience, policy-making experience, and ability to articulate a point of view, take tough positions and constructively challenge management. Directors must also be committed to actively engaging in their Board roles, with sufficient time to carry out the duties of Board and Board committee membership. 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.

Our Corporate Governance Principles describe our policy of considering diversity in the director identification and nomination process. When considering Board candidates, the Nominating Committee seeks nominees with a broad range of experience from a variety of industries and professional disciplines, such as finance, professional services and technology, 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. As part of its annual review of the Board’s composition and director nominees, the Nominating Committee assesses the effectiveness of its approach to diversity. When the Nominating Committee identifies an area of which the Board may benefit from greater representation, it may focus its candidate search on particular experience, background or diversity characteristics, including gender, ethnic and geographical attributes. The Board believes that diversity in the backgrounds and qualifications of Board members ensures the mix of experience, knowledge and abilities necessary for the Board to fulfill its responsibilities and leads to a more effective oversight and decision-making process.

 
 
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The grid below summarizes the key qualifications and skills each of our director nominees possess that were most relevant to the decision to nominate him or her to serve on the Board. The lack of a mark does not mean the director does not possess that qualification or skill; rather a mark indicates a specific area of focus or expertise on which the Board relies most heavily. Each director’s biography describes these qualifications and relevant experience in more detail.


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Director Nominees (Ages and Committee roles as of May 1, 2019)

The biographies of each of the nominees include 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 key experiences, qualifications, attributes or skills that led 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 percent 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.


Corie S. Barry
 
Age: 44
Committees:
Director Since: Nominee
None
   
 
 
Other Public Company Directorships:
 
 
Domino’s Pizza, Inc.
 
 
 
 
 
 

Current Role:

Chief Financial Officer (2016-present) & Strategic Transformation Officer (2018-present), and CEO-elect, Best Buy Co., Inc.

Prior Roles:

Chief Strategic Growth Officer & interim President, Services, Best Buy Co., Inc. (2015-2016);
Senior Vice President, Domestic Finance, Best Buy Co., Inc. (2013-2015);
Vice President, Chief Financial Officer & Business Development, Home Business Group, Best Buy Co., Inc. (2012-2013);
Vice President, Finance – Home Customer Solutions Group, Best Buy Co., Inc. (2010-2012).

Education: Ms. Barry holds degrees from the College of St. Benedict.

Key Qualifications & Experience:

Finance Expertise — As Best Buy’s Chief Financial Officer since 2016, Ms. Barry brings strong financial acumen to the board. She previously served in a variety of financial and operational roles within the company, including Senior Vice President of Domestic Finance. Prior to joining Best Buy in 1999, she worked at Deloitte & Touche.
Growth/Transformation Experience — As a key member of the Best Buy executive team, Ms. Barry has played a critical role in the company’s successful Renew Blue transformation and in developing and executing the proven growth strategy in place today. She has led Best Buy’s strategic transformation and growth efforts, including the launch of its In-Home Consultation program and its expansion in the health space. Ms. Barry has demonstrated track record of advocating for and mentoring women in the workplace and in the community through her close involvement with the company’s women’s development group, local women’s leadership organizations and her alma mater.
Knowledge of Best Buy and/or Industry — As Best Buy’s Chief Financial Officer and incoming CEO, Ms. Barry has a deep knowledge of the company, its business partners and the broader industry in which it competes. She has worked at the company for nearly 20 years across a wide variety of roles, both in the field and at the corporate office.
 
 
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Lisa M. Caputo
 
 
 
Age: 55
Committees:
Director Since: December 2009
 
Compensation Committee
 
Independent
 
Nominating Committee
   
 
 
Other Public Company Directorships:
 
None

Current Role:

Executive Vice President of Marketing, Communications and Customer Experience of The Travelers Companies, Inc., a property casualty insurer (2011-present)

Prior Roles:

Managing Director and Senior Banker of the Public Sector Group of the Institutional Clients Group of Citigroup, Inc., a financial services company (2010-2011);
Global Chief Marketing Officer and Executive Vice President of Citigroup, Inc. (2007-2010);
Chief Marketing and Community Relations Officer, Global Consumer Group, Citigroup, Inc. (2005-2007);
Founder, Chairman and Chief Executive Officer of Citi’s Women & Co., a membership service that provides financial education and services for women (2000-2011).

Education: Ms. Caputo holds degrees from Brown University and Northwestern University.

Key Qualifications & Experience:

Marketing / Customer Experience Expertise - Ms. Caputo’s position as Executive Vice President of Marketing, Communications and Customer Experience of The Travelers Companies, Inc., makes her invaluable to Best Buy’s efforts to broaden its brand, rejuvenate the customer experience and transform its marketing and communications efforts to drive growth. In addition, her perspective gained from driving innovation efforts to explore partnership and investment opportunities at Travelers is helpful as we develop growth initiatives within the Company’s Best Buy 2020 strategy. Ms. Caputo also spent 11 years at Citigroup, advising three CEOs on topics from marketing and communications to government affairs and community relations.
Environmental, Social & Governance Expertise - Ms. Caputo has an exceptional track record throughout her career of enhancing community and employee engagement, building social impact strategies and leading corporate responsibility and sustainability.
Corporate Public Affairs Expertise - Ms. Caputo has also been a senior executive at Walt Disney Co. and CBS Corp., and she spent more than a decade in the public sector, serving as Deputy Assistant to President Bill Clinton and Press Secretary to First Lady Hillary Rodham Clinton. Her diverse public/private background lends an important voice to Board deliberations, particularly those that involve the Company’s government relations and communications efforts.
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J. Patrick Doyle
 
 
 
Age: 55
Committees:
Director Since: October 2014
 
Compensation Committee
 
Independent
 
Finance & Investment Policy Committee (Chair)
   
 
 
Other Public Company Directorships:
 
 
 
None

Current Role:

None. Effective at the end of the meeting, Mr. Doyle will serve as our Lead Independent Director.

Prior Roles:

President and CEO of Domino’s Pizza, Inc., the largest pizza restaurant chain in the world (2010-2018);
President of Domino’s Pizza (2007-2018);
Executive Vice President of Team U.S.A. at Domino’s Pizza (2004-2007);
Executive Vice President of Domino’s Pizza International (1999-2004).

Education: Mr. Doyle holds degrees from The University of Chicago Booth School of Business and The University of Michigan.

Key Qualifications & Experience:

CEO Experience - Mr. Doyle served as Chief Executive Officer of Domino’s Pizza, Inc, from 2010 to 2018. Prior to that, he held a variety of other senior leadership roles at Domino’s.
Digital / E-Commerce Expertise - Under Mr. Doyle’s leadership, Domino’s significantly enhanced its multichannel presence, with digital channels now accounting for 60 percent of U.S. orders. That expertise supports Best Buy’s goal of increasing its online market share.
Growth / Transformation Experience - Having led remarkable growth and transformation at Domino’s, Mr. Doyle’s experience and insights are valuable to the Board and senior management as Best Buy undertakes a similar effort. Under Mr. Doyle, Domino’s rebuilt its reputation among consumers and nearly doubled its global retail sales from $5.5 billion in 2008 to $10.9 billion in 2016. During Domino’s transformation, Mr. Doyle increased the company’s contributions to communities and disaster relief and initiated a partnership to support students interested in careers in agriculture.
 
 
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Russell P. Fradin
 
Age: 63
Committees:
Director Since: April 2013
 
Compensation Committee (Chair)
 
Independent
 
 
Other Public Company Directorships:
Lead Independent Director
 
TransUnion
 
 
 
 
 
 

Current Role:

Operating Partner at Clayton, Dubilier & Rice, a private investment firm (April 2016-present)

Prior Roles:

Chief Executive Officer, President and a Director of SunGard Data Systems, Inc., a leading software and technology services company now owned by Fidelity National Information Services, Inc. (2011-2015);
Chairman and Chief Executive Officer of AonHewitt, a global provider of human resources consulting and outsourcing solutions (2010-2011);
Chief Executive Officer of Hewitt Associates (2006-2010);
President and Chief Executive Officer of The BISYS Group, Inc., a provider of outsourcing solutions for the financial services sector (2004-2006).

Education: Mr. Fradin holds degrees from the Wharton School of the University of Pennsylvania and from Harvard Business School.

Key Qualifications & Experience:

Corporate Governance Expertise - Mr. Fradin brings experience as both a CEO and an executive board chair to his role as Best Buy’s Lead Independent Director. He has firsthand insight into the partnership between an engaged board and an effective, high-performing management team. As CEO of SunGard, Mr. Fradin affirmed the company’s obligation and commitment to help raise ethical, social and environmental standards wherever they did business.
Business Operations / Services Expertise - As the former CEO of Hewitt Associations and AonHewitt, Mr. Fradin is able to provide valuable advice on issues such as developing service-based initiatives, streamlining operations, reducing costs and establishing appropriate executive compensation. Earlier in his career, he spent 18 years at McKinsey and Co., where he specialized in providing Fortune 500 clients advice on new product and service innovations.
CEO Experience - Mr. Fradin currently serves as Operating Partner at Clayton, Dubilier & Rice. He previously served as CEO of SunGard (now acquired by Fidelity National Information Services, Inc.), Aon Hewitt, Hewitt Associates and The BISYS Group, Inc.
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Kathy J. Higgins Victor
 
 
 
Age: 62
Committees:
Director Since: November 1999
 
Compensation Committee
 
Independent
 
Nominating Committee (Chair)
   
 
 
Other Public Company Directorships:
 
None

Current Role:

President and Founder of Centera Corporation, an executive development and leadership coaching firm (1995-present)

Prior Roles:

Senior Vice President, Chief Human Resources Officer at Northwest Airlines, Inc., a global commercial airline now merged with Delta Air Lines (1991-1995)

Education: Ms. Higgins Victor holds a degree from the University of Avila.

Key Qualifications & Experience:

Talent Management Expertise - Ms. Higgins Victor is the founder and president of Centera Corp., an executive development and leadership coaching firm. She has extensive experience in human resources, talent management, organizational culture and succession planning. While serving as Chief Human Resources Officer at Northwest Airlines, Inc., she was responsible for executive compensation, employee benefits and labor relations. She also held Human Resource-related leadership roles at The Pillsbury Co. and Burger King Corp. earlier in her career.
Corporate Governance Expertise - Ms. Higgins Victor has decades of experience advising senior Fortune 100 executives and expertise in governance, change management and human resources. That gives her the ability to offer insights into how to build foundational capabilities in the areas of governance, engagement and diversity & inclusion necessary to cultivate a high-performing workforce and unlock future growth strategies. As Chair of the Nominating Committee, Ms. Higgins Victor leads the Board’s efforts around board refreshment, engagement and evaluation as well as increasing the racial and gender diversity of the Company’s Board. Best Buy is one of few large, public companies to achieve gender parity among its board members.
Knowledge of Best Buy and/or Industry - As a Best Buy director since 1999, Ms. Higgins Victor has extensive knowledge of the company’s business and culture. Her understanding of our history is particularly helpful as the Company moves into its next stage of growth.
 
 
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Hubert Joly
 
Age: 59
Committees:
Director Since: September 2012
None
   
 
 
Other Public Company Directorships:
Appointed Chairman in June 2015
 
Ralph Lauren Corporation
 
 
 
 
 
 

Current Role:

Chairman (2015-present) and Chief Executive Officer of Best Buy Co., Inc. (2012-present). Effective at the Meeting, Mr. Joly will transition to the role of Executive Chairman.

Prior Roles:

President and Chief Executive Officer of Carlson, Inc., a worldwide hospitality and travel company (2008-2012);
President and Chief Executive Officer of Carlson Wagonlit Travel, a business travel management company (2004-2008);
Senior executive positions with Vivendi S.A., a French multinational media and telecommunications company (1999-2004).

Education: Mr. Joly holds degrees from the École des Hautes Études Commerciales de Paris (HEC Paris) and the Institut d’Etudes Politiques de Paris.

Key Qualifications & Experience:

CEO Experience - Mr. Joly has served as Chief Executive Officer of Best Buy since 2012. He previously served as President and Chief Executive Officer of Carlson, Inc., a worldwide hospitality and travel company, and President and Chief Executive Officer of Carlson Wagonlit Travel, a business travel management company.
Growth / Transformation Experience - Mr. Joly led Best Buy through its successful customer-focused Renew Blue transformation, which delivered improved customer satisfaction, market share gains, revenue growth and improved margins, and reduced costs by $1.4 billion to fund necessary investments. He is now leading the Company’s Best Buy 2020 growth strategy, focused on enriching lives through technology. During both phases, Mr. Joly has pursued a purposeful leadership approach, focused on positively impacting all stakeholders. The company’s renewed success with customers has been fueled by the enhanced engagement and proficiency of its employees, investments in their compensation and benefits and a strong focus on diversity and inclusion. In addition, corporate social responsibility and sustainability efforts have been embedded in all aspects of the company’s operations, notably resulting in a reduced carbon footprint.
Knowledge of Best Buy and/or Industry - As the Company’s Chief Executive Officer, Mr. Joly has a deep knowledge of Best Buy, its business partners and the broader industry in which it competes. He also sits on the executive committees for the Retail Industry Leaders Association and the Minnesota Business Partnership, and serves as the Vice Chairman of The Business Council.
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David W. Kenny
 
Age: 57
Committees:
Director Since: September 2013
 
Finance & Investment Policy Committee
 
Independent
 
Nominating Committee
   
 
 
Other Public Company Directorships:
 
 
Nielsen

Current Role:

CEO and a director of Nielsen, a global measurement and data analytics company (December 2018-present)

Prior Roles:

Senior Vice President of IBM Watson (January 2016-2018) and IBM Cloud (November 2016-2018), business units of IBM, an American multinational technology and consulting corporation;
Chairman and Chief Executive Officer of The Weather Company, a leading provider of weather forecasts and information (2012-2015);
President of Akamai, a leading cloud platform technology company (2011-2012);
Managing Partner of VivaKi, a provider of integrated strategy, technology and marketing solutions for internet-based ecommerce companies (2006-2010);
Founder and Chief Executive Officer of Digitas, Inc., which was later merged with VivaKi (1997-2006).

Education: Mr. Kenny holds degrees from the GM Institute (now Kettering University) and Harvard University.

Key Qualifications & Experience:

CEO Experience - Prior to his current role as CEO of Nielsen, Mr. Kenny was Senior Vice President of IBM Watson and IBM Cloud, and chairman and CEO of The Weather Co., a leading provider of weather forecasts and information, from 2012 to 2015. He also previously served as President of Akamai, Managing Partner of VivaKi, and CEO of Digitas Inc., all technology-related companies.
Technology Expertise - As Senior Vice President of IBM Watson, Mr. Kenny led the company’s growth initiatives around cloud and artificial intelligence services. His online leadership dates to 1997, when he founded Digitas, Inc., a provider of technology and marketing solutions for e-commerce and multichannel companies. His experience leading The Weather Company offers the Company strong environmental leadership and climate change expertise.
Customer Engagement Expertise - As chairman and chief executive officer of The Weather Company, acquired by IBM in 2016, Mr. Kenny helped turn the organization into a media heavyweight that produced television programming, developed apps, published content and used analytics to connect businesses to consumers through weather and climate-related content. He uses those consumer centric and strategic skills to support Best Buy’s growth and transformation efforts, including our goal of capturing online share and responsible use of data to serve customers based on how, where and when they want to be served.
 
 
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Cindy R. Kent
 
Age: 50
Committees:
Director Since: September 2018
 
Finance & Investment Policy
 
Independent
 
 
Other Public Company Directorships:
 
None
 
 
 
 
 
 

Current Role:

None

Prior Roles:

President & General Manager, Infection Prevention Division, 3M (2016 - 2018);
President & General Manager, Drug Delivery Systems Division, 3M (2014 - 2016);
Vice President, Strategy, Business Development and US Medical Key Accounts, Healthcare Group (2013 - 2014);
Vice President & General Manager and various other executive leadership roles, Medtronic (2007 - 2013);
Various marketing, human resources, sales and engineering roles, Eli Lilly & Co. (1991 - 2007).

Education: Ms. Kent holds degrees from Northwestern University and Vanderbilt University.

Key Qualifications & Experience:

Health Care Expertise - Ms. Kent has more than 25 years of experience across a variety of roles and segments of the health care industry. She most recently served as president and general manager of the Infection Prevention Division at 3M Co. She also previously worked at medical device maker Medtronic Inc. and pharmaceutical company Eli Lilly & Co. This expertise will be invaluable as the company pursues its Best Buy 2020: Building the New Blue growth strategy, which includes an emphasis on growing a strong health and wellness business.
Growth / Transformation Experience - At 3M, Ms. Kent was tasked with reinvigorating growth in multiple divisions. Under her leadership, the Infection Prevention Division unit posted some of the highest growth numbers in the past two decades. She also championed an agile innovation process that led to one of the fastest new product introductions, requiring regulatory clearance, in the history of the company’s healthcare business. She has a strong understanding of the marketplace, which will be valuable as the Company pursues the next phase of its growth.
Marketing Expertise & Civic Leadership - Ms. Kent has spent much of her career leading organizations in marketing roles, influencing corporate reputation. She has a proven track record of civic leadership and philanthropy, focusing on advocating for and mentoring women in STEM careers, both of which are highly valuable to the Company’s social impact work.
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Karen A. McLoughlin
 
Age: 54
Committees:
Director Since: September 2015
 
Audit Committee
 
Independent
 
Finance & Investment Policy Committee
   
 
 
Other Public Company Directorships:
 
None

Current Role:

Chief Financial Officer of Cognizant Technology Solutions Corporation, a Fortune 500 company and leading provider of information technology, business process and consulting services (2012-present)

Prior Roles:

Senior Vice President, Financial Planning and Analysis and Enterprise Transformation of Cognizant (2008-2012);
Vice President, Global Financial Planning and Analysis of Cognizant (2003-2008);
Vice President, Finance of Spherion Corp., now SFN Group Inc., which was acquired by Randstadt (1997-2003).

Education: Ms. McLoughlin holds degrees from Wellesley College and Columbia University.

Key Qualifications & Experience:

Finance Expertise - As the Chief Financial Officer of Cognizant Technology Solutions Corp., Ms. McLoughlin brings strong financial acumen to the Best Buy board. Prior to that, she spent more than 20 years in various finance management roles at Cognizant, Spherion and Rider System Inc.
Services Expertise - Having been at Cognizant since 2003, she has developed a deep knowledge of the IT services sector, which will be invaluable to Best Buy as we consider our own internal IT processes and continue to emphasize Services across the organization as part of its Best Buy 2020 growth strategy.
Growth / Transformation Expertise - During Ms. McLoughlin’s time at Cognizant, the company has experienced tremendous growth, with revenue increasing from $368 million in 2003 to $14.81 billion in 2017. Cognizant ranked No. 205 on the 2017 Fortune 500 list. Ms. McLoughlin brings experience in social impact through Cognizant’s efforts to help youth build the skills to compete and thrive in the global economy. Her leadership in Cognizant’s Women Empowered program, which aims to elevate women at all levels, is beneficial in the Company’s diversity and inclusion work.
 
 
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Thomas L. “Tommy” Millner
 
Age: 65
Committees:
Director Since: January 2014
 
Audit Committee (Chair)
 
Independent
 
Nominating Committee
   
 
 
Other Public Company Directorships:
 
None

Current Role:

None

Prior Roles:

Chief Executive Officer and a Director of Cabela’s Inc., a leading multi-channel retailer of hunting, fishing and camping products (2009-2017);
President and Chief Executive Officer of Freedom Group, Inc. and its successor company, Remington Arms Company, Inc., a firearms and ammunition manufacturer (1999-2009).

Education: Mr. Millner holds a degree from Randolph Macon College.

Key Qualifications & Experience:

CEO Experience - Mr. Millner served as CEO of Cabela’s, Inc., a leading multi-channel retailer of hunting, fishing and camping products, from 2009 to 2017. He also previously served as CEO of Freedom Group, Inc. and Remington Arms Co., Inc., a firearms and ammunition manufacturer.
Growth / Transformation Expertise - Mr. Millner has experience leading a specialty retailer through a transformation and significant growth, taking Cabela’s from $2.6 billion in revenue in 2009 to $4.13 billion in 2016. Bass Pro Shops Inc. bought the company for $4.0 billion in 2017. Throughout this period of Mr. Millner’s leadership, Cabela’s maintained its dedication to conserving fish, game and natural resources, and created Camp Cabela, a program dedicated to providing thousands of underprivileged inner-city children the opportunity to camp, fish and enjoy the outdoors.
Knowledge of Best Buy and/or Industry - As the former president and CEO of Cabela’s, Inc., Mr. Millner was a prominent player in multichannel retail. He brings to the Best Buy Board expertise in support of the Company’s Best Buy 2020 growth strategy, particularly priorities concerning effective merchandising and multichannel operations.
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Claudia F. Munce
 
Age: 59
Committees:
Director Since: March 2016
 
Audit Committee
 
Independent
 
Finance & Investment Policy Committee
   
 
 
Other Public Company Directorships:
 
 
CoreLogic

Current Role:

Venture Advisor at New Enterprise Associates (NEA), one of the world’s largest and most active venture capital firms (January 2016-present)

Prior Roles:

Managing Director of IBM Venture Capital Group and Vice President of Corporate Strategy at IBM Corp. (2004-2015);
Director of Strategy, IBM Venture Capital Group (2000-2004);
Head of Technology Transfer and Licensing, IBM Research (1994-2000).

Education: Ms. Munce holds degrees from the Santa Clara University School of Engineering and the Stanford University Graduate School of Business.

Key Qualifications & Experience:

Venture Capital Expertise - As a seasoned venture capital leader, Ms. Munce has developed a deep knowledge of strategic partnerships and M&A activities. She currently is a venture adviser at New Enterprise Associates, one of the world’s largest and most active venture capital firms. She also serves on the organizational boards of the National Venture Capital Association and Global Corporate Venturing Leadership Society.
Technology Expertise - Ms. Munce’s many years of focusing on emerging markets and disruptive technology are valuable to Best Buy as it explores growth opportunities consistent with its Best Buy 2020 strategy. She brings the perspective of someone with a highly technical engineering and computer science background, as well as business acumen and a strategic mindset. She is also a NACD certified Cybersecurity Oversight director.
Growth / Transformation Experience - Ms. Munce was a founding member of the IBM Venture Capital Group, a unit within IBM that drives non-organic growth through partnerships and M&A activities globally, focusing on growth markets and disruptive technology and business models. While at IBM, she worked with more than 300 venture capital firms across 30 countries to advance the company’s strategic goals for developing innovations worldwide. Ms. Munce is an advocate for women’s leadership in the technology industry and works to close the gender gap at the highest levels of business.
 
 
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Richelle P. Parham
 
 
 
Age: 51
Committees:
Director Since: March 2018
 
Audit
 
Independent
 
 
 
 
Other Public Company Directorships:
 
 
E.L.F.
 
 
 
 
Laboratory Corporation of America Holdings

Current Role:

General Partner, Camden Partners Holdings, LLC, a private equity firm (2016-present)

Prior Roles:

Vice President and Chief Marketing Officer, eBay, Inc., a global e-commerce company (2010-2015);
Head, Global Marketing Innovation (2010); and Head, Global Marketing Services (2008-2010) of Visa, Inc., a global payments technology company;
Senior Vice President, Strategy and Enablement, Rapp Worldwide (2007-2008);
Various marketing-related leadership roles, Bronner Slosberg Humphrey, now known as Digitas Inc. (1994-2007);
Former Director at Scripps Network Interactive (2012-2018).

Education: Ms. Parham holds degrees from Drexel University.

Key Qualifications & Experience:

Marketing Expertise - As Vice President and Chief Marketing Officer of eBay, Inc., Ms. Parham was tasked with transforming the company’s brand reputation. She focused on optimizing the company’s marketing budget to improve return on investment and new revenue streams, and she helped decrease attrition rates by building out the company’s CRM strategy and better understanding the customer’s path to making purchase decisions. She has strong knowledge of how to use data analytics for more effective targeting and pricing. Her experience in nonprofit and social impact, including work to encourage girls to pursue STEM, are in line with the Company’s programs to prepare youth from underserved communities for higher education and technology careers.
Digital / E-commerce Experience - With extensive experience in e-commerce, Ms. Parham takes pride in understanding the fundamental needs of consumers, rethinking what is possible and executing effectively at scale. She has led strategy and built brands via various digital channels. Her insight will be highly valuable to the Board as it moves forward with the Best Buy 2020 strategy.
Business Operations / Strategy Expertise - Ms. Parham is a seasoned, senior-level executive with more than 25 years of experience at best-in-class corporations such as eBay, Visa, Digitas and Citibank. She has a proven track record of leading high-performing teams and using strategic planning and analytical decision-making to successfully drive key business performance.
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Eugene A. Woods
 
Age: 54
Committees:
Director Since: December 2018
Finance and Investment Policy (eff. June 2019)
 
Independent
 
 
Other Public Company Directorships:
 
None
 
 
 
 
 
 

Current Role:

President and Chief Executive Officer of Atrium Health (2016 - present)

Prior Roles:

President and Chief Operating Officer of Christus Health (2014 - 2015);
Executive Vice President and Chief Operating Officer of Christus Health (2011 - 2014);
Senior Vice President, Operations and Chief Executive Officer of St. Joseph Health Care for Catholic Health Initiatives (2005 - 2011);
Senior Vice President and Chief Operating Officer of Washington Hospital Center (2001 - 2005);
President and Chief Executive Officer of Roy Schneider Hospital (1998 - 2001);
Vice President, Administration at Southside Regional Medical Center (1993 - 1998).

Education: Mr. Woods holds multiple degrees from Pennsylvania State University.

Key Qualifications & Experience:

Health Care Expertise - Mr. Woods has more than 25 years of health care experience, having overseen nonprofit and for-profit hospitals, academic and community-based delivery systems and rural and urban facilities. He is currently president and CEO of Atrium Health, a health care system with nearly $10 billion of annual revenue, 55 hospitals and 900 care locations. He ranked No. 25 on Modern Healthcare’s list of the 100 Most Influential People in Healthcare for 2018 and is the former Chair of the American Hospital Association Board.
CEO Experience - Mr. Woods has served as CEO of Atrium Health, one of the nation’s most comprehensive and highly integrated and innovative health care systems, since 2016. He also previously served as President & COO of CHRISTUS Health and was SVP of CHI Divisional Operations/CEO of Saint Joseph Health System. He has also held a variety of other senior leadership roles at health care organizations throughout the country.
Growth / Transformation Expertise - Since becoming CEO in 2016, Mr. Woods has led Atrium Health’s expansion beyond the Carolinas into other areas of the Southeast, including Georgia. He also has led a digitalization initiative by building out Atrium’s strong telehealth program, and he is working on new models for long-term cost of care and changing quality-of-care metrics. Mr. Woods brings to the Company a track record of leadership in uniting a large organization around a vision and mission, fostering a diverse, inclusive and engaging work environment, and a strong commitment to serving the community.
 
 
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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 Articles 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 a director.

Proxy cards that are properly executed 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 Corie S. Barry, Lisa M. Caputo, J. Patrick Doyle, Russell P. Fradin, Kathy J. Higgins Victor, Hubert Joly, David W. Kenny, Cindy R. Kent, Karen A. McLoughlin, Thomas L. Millner, Claudia F. Munce, Richelle P. Parham, and Eugene A. Woods for a term of one year. All of the nominees, other than Ms. Barry, are current members of the Board.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table provides information about the number of shares of our common stock beneficially owned on March 31, 2019 (unless otherwise indicated), by each of our named executive officers. The table provides similar information for each director and director nominee, all directors and executive officers as a group, and each person, or any group that we know who beneficially owns more than 5 percent of the outstanding shares of our common stock.

Name and Address(1)
Number of Shares
Beneficially Owned
Percent of Shares
Beneficially Owned
Hubert Joly, Chairman and Chief Executive Officer
1,899,625(2)
*
Corie S. Barry, Chief Financial Officer & Strategic Transformation Officer
168,920(3)
*
R. Michael Mohan, Chief Operating Officer, U.S.
121,334(4)
*
Keith J. Nelsen, General Counsel and Secretary (Former)
92,877(5)
*
Kamy Scarlett, Chief Human Resources Officer & President, U.S. Retail Stores
24,776(6)
*
Shari L. Ballard, President, Multi-Channel Retail (Former)
 
Lisa M. Caputo, Director
52,811(7)
*
J. Patrick Doyle, Director
20,933(8)
*
Russell P. Fradin, Director
30,311(8)
*
Kathy J. Higgins Victor, Director
51,041(9)
*
David W. Kenny, Director
26,288(8)
*
Cindy R. Kent, Director
983(8)
*
Karen A. McLoughlin, Director
16,151(8)
*
Thomas L. Millner, Director
24,775(8)
*
Claudia F. Munce, Director
13,928(8)
*
Richelle P. Parham, Director
2,617(8)
*
Eugene A. Woods, Director
608(8)
*
All current directors and executive officers, as a group
(18 individuals)
2,576,600(10)
0.95%
Richard M. Schulze, Founder and Chairman Emeritus
6600 France Avenue South, Suite 550
Minneapolis, MN 55435
36,832,529(11)
13.75%
The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355
29,170,548(12)
10.83%
FMR LLC (“Fidelity”)
245 Summer Street
Boston, MA 02210
23,545,958(13)
8.749%
BlackRock, Inc.
55 East 52nd Street
New York, NY 10055
17,111,560(14)
6.4%
*Less than 1%.
(1)The business address for all current directors and executive officers is 7601 Penn Avenue South, Richfield, Minnesota, 55423.
(2)The figure represents: (a) 171,634 outstanding shares owned by Mr. Joly; (b) 409,116 restricted stock units, which Mr. Joly could convert to shares within 60 days of March 31, 2019; and (c) options to purchase 1,318,875 shares, which Mr. Joly could exercise within 60 days of March 31, 2019.
(3)The figure represents: (a) 93,540 outstanding shares owned by Ms. Barry; (b) 2,333 outstanding shares held in the name of the Trustee in connection with the Retirement Saving Plan for the benefit of Ms. Barry; and (c) options to purchase 73,047 shares, which Ms. Barry could exercise within 60 days of March 31, 2019.
(4)The figure represents: (a) 115,591 outstanding shares owned by Mr. Mohan; and (b) 5,743 restricted shares subject to a time-based vesting schedule, which vest within 60 days of March 31, 2019.
 
 
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(5)The figure represents: (a) 91,940 outstanding shares owned by Mr. Nelsen; and (b) 937 outstanding shares held in the name of the Trustee in connection with the Retirement Saving Plan for the benefit of Mr. Nelsen.
(6)The figure represents: (a) 20,678 outstanding shares owned by Ms. Scarlett; and (b) options to purchase 4,098 shares, which Ms. Scarlett could exercise within 60 days of March 31, 2019.
(7)The figure represents: (a) 10,000 outstanding shares owned by Ms. Caputo; (b) 30,311 restricted stock units, which Ms. Caputo could convert to shares within 60 days of March 31, 2019; and (c) options to purchase 12,500 shares, which Ms. Caputo could exercise within 60 days of March 31, 2019.
(8)The figure represents restricted stock units that could be converted to shares within 60 days of March 31, 2019.
(9)The figure represents: (a) 10,730 outstanding shares owned by Ms. Higgins Victor; (b) 30,311 restricted stock units, which Ms. Higgins Victor could convert to shares within 60 days of March 31, 2019; and (c) options to purchase 10,000 shares, which Ms. Higgins Victor could exercise within 60 days of March 31, 2019.
(10)The figure represents: (a) the outstanding shares, restricted stock units and options described in the preceding footnotes (2) through (9); (b) 13,391 outstanding shares owned by other executive officers; (c) 7,106 restricted shares subject to time-based vesting schedules, which are held by other executive officers and which vest within 60 days of March 31, 2019; and (d) options to purchase 8,124 shares, which the other executive officers could exercise within 60 days of March 31, 2019.
(11)Mr. Schulze is our Founder and Chairman Emeritus. He is not a member of our Board and is not considered an executive officer but is listed here due to his status as a beneficial owner of more than 5% of our common stock. The figure represents: (a) 1,732,500 outstanding shares owned by Mr. Schulze; (b) 16,545,801 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) 13,943,296 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) 11,998 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); (i) 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); (j) 2,568 outstanding shares registered in the name of Mr. Schulze’s sister and co-trustees, and held by them as trustees of trusts for the benefit of Mr. Schulze’s sister (Mr. Schulze has disclaimed beneficial ownership of these shares); (k) 2,061 outstanding shares held in Mr. Schulze’s individual retirement account; (l) 1,960,643 outstanding shares owned by The Richard M. Schulze Family Foundation, of which Mr. Schulze is the sole director and (m) 72,740 outstanding shares registered in the name of the Trustee in connection with the Retirement Saving Plan for the benefit of Mr. Schulze.
(12)As reported on the owner’s most recent Schedule 13G filed with the SEC on February 11, 2019, to report ownership as of December 31, 2018. The Vanguard Group has sole voting power over 281,441 shares, shared voting power over 64,636 shares, sole dispositive power over 28,829,278 shares and shared dispositive power over 341,270 shares.
(13)As reported on the owner’s most recent Schedule 13G filed with the SEC on February 13, 2019, to report ownership as of December 31, 2018. FMR LLC and certain related entities have sole voting power over 2,565,529 shares and sole dispositive power over 23,545,958 shares.
(14)As reported on the owner’s most recent Schedule 13G filed with the SEC on February 4, 2019, to report ownership as of December 31, 2018. BlackRock, Inc. has sole voting power over 14,649,042 shares and sole dispositive power over 17,111,560 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, and executive officers who served during any part of fiscal 2019 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, 2019, except that one equity award, which was granted to Mathew R. Watson on March 12, 2018, was reported on a delayed basis due to administrative error (see Mr. Watson’s Form 4 dated March 15, 2018, for additional detail).

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Our Related Party Transactions Policy prohibits “related party transactions” unless approved by the Audit Committee and the Board. For purposes of our policy, a “related party transaction” is a transaction or series of transactions in which (a) the Company or a subsidiary is a participant, (b) the aggregate amount involved exceeds $120,000 and (c) any director, executive officer or shareholder beneficially owning more than 5 percent of our common stock, or any of their respective immediate family members has a direct or indirect material interest.

A related party transaction will generally not be approved unless it provides us with a demonstrable incremental benefit and the terms are competitive with those available from unaffiliated third parties. Only Board members who do not have an interest in the transaction are permitted to vote on a related party transaction. In addition, ongoing related party transactions are reviewed 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 (or re-approved if ongoing) by the Audit Committee and the Board in March 2019, 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.

Richard M. Schulze

As of the date of this filing, Mr. Schulze owned approximately 13.75 percent of our common stock. On March 25, 2013, we entered into a letter agreement with Mr. Schulze pursuant to which, among other things, Mr. Schulze was given the lifetime honorary title of “Founder and Chairman Emeritus” of the Company, although he is not an executive and is no longer a member of our Board. Under this letter agreement, we agreed to compensate Mr. Schulze with an annual base salary of $150,000 through fiscal 2018 for his services as Chairman Emeritus, 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 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. The letter agreement’s term was renewed in January 2018 through the end of fiscal 2020, except as specifically described above in regard to certain lifetime health benefits.

Ryan Green, Mr. Schulze’s step-son, is employed with us as a Senior Director in our Properties department at our corporate headquarters in Richfield, Minnesota. Mr. Green’s total cash compensation in fiscal 2019 was approximately $271,000. Mr. Green also received an annual long-term incentive award of 1,075 time-based restricted shares, which vest in one-third increments on each anniversary of the grant for three years. His award is consistent for other employees at his level. Mr. Green is eligible to receive employee benefits generally available to all employees. Mr. Green’s employment with us began in August 2012. Mr. Schulze’s family member is compensated at a level comparable to the compensation paid to non-family members in similar positions at Best Buy.

Fidelity

FMR LLC (“Fidelity”) filed an amended Schedule 13G in February 2019, stating that it beneficially owns 8.75 percent of the Company’s common stock. As a result of beneficially owning more than 5 percent of our common stock, Fidelity is currently considered a “related party” under our Related Party Transactions Policy. 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 $354,000 for these services for fiscal 2019. The administrative services contracts were initially entered into prior to Fidelity’s Schedule 13G filing and 5 percent holder status. The contracts were negotiated at arm’s length, and there is no indication that the Company or Fidelity received preferential treatment as a result of the relationship.

 
 
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AUDIT COMMITTEE REPORT

The key responsibility of the Audit Committee is to assist the Board in overseeing the integrity of the Company’s financial statements and financial reporting processes. The Audit Committee’s charter, which was approved by our Board, is posted on our website at www.investors.bestbuy.com. During fiscal 2019, the Audit Committee included four members. All Audit Committee members meet the SEC and NYSE definitions of independence and financial literacy for audit committee members. The Board has determined that Ms. McLoughlin and Mr. Millner are “audit committee financial experts” for purposes of SEC rules based on their relevant experience. No member of the Audit Committee serves on the audit committee of more than three public companies.

Committee Meetings

The Audit Committee met nine times during fiscal 2019, including five times via conference call. 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.

Fiscal 2019 Audited 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 fiscal year ended February 2, 2019, and our quarterly operating results for each quarter in such fiscal year, along with the related significant accounting and disclosure issues. The Audit Committee has discussed with the independent auditors the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 1301 “Communications with Audit Committees.”

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 (U.S.) 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 2019. 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 Annual Report on Form 10-K for the period ended February 2, 2019, for filing with the SEC.

AUDIT COMMITTEE

Thomas L. Millner (Chair)
Karen A. McLoughlin
Claudia F. Munce
Richelle P. Parham

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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 is directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm retained to audit the Company’s financial statements. As part of this oversight, the Audit Committee considers the firm’s independence, qualifications, performance, and whether the independent registered public accounting firm should be rotated, as well as the impact of such a rotation. Deloitte & Touche LLP (“D&T”) has been retained as our independent registered public accounting firm since fiscal 2006. In compliance with Sarbanes-Oxley requirements, the Lead Audit Partner from D&T rotates off our account every five years, with oversight in selection by the Audit Committee. The last Lead Audit Partner rotation occurred in March 2016. The Audit Committee has appointed D&T as our independent registered public accounting firm for the fiscal year ending February 1, 2020. 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 attend 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

The Audit Committee is responsible for the audit fee negotiations associated with the retention of our independent registered public accounting firm. For the fiscal years ended February 2, 2019, and February 3, 2018, 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 2019 and fiscal 2018, respectively. The fees listed below were pre-approved by our Audit Committee pursuant to the Audit Committee’s pre-approval policy as described below:

Service Type
Fiscal 2019
Fiscal 2018
Audit Fees(1)
$
        2,912,000
 
$
         2,770,000
 
Audit-Related Fees(2)
 
654,000
 
 
334,000
 
Tax Fees
 
 
 
 
Total Fees
$
3,566,000
 
$
3,104,000
 
(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, 2019, and February 3, 2018; the reviews of the consolidated financial statements included in each of our Quarterly Reports on Form 10-Q during those fiscal years; and consultations on accounting matters.
(2)Consists primarily of fees for statutory audit filings, as well as the audits of our retirement savings plans and foundation, as well as due diligence services related to the acquisition of GreatCall, Inc. for the fiscal year ended February 2, 2019.

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.

Pre-Approval Policy

Consistent with SEC rules regarding auditor independence, the Audit Committee is responsible 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, as amended, 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 percent of the fees we pay to our independent registered public accounting firm during a fiscal year.

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.

 
 
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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.

Board Voting Recommendation

The members of the Audit Committee and the Board believe that the continued retention of D&T to serve as the Company’s independent registered public accounting firm is in the best interests of the Company and our shareholders. The Board recommends that shareholders vote FOR the proposal to ratify the appointment of D&T as our independent registered public accounting firm for the fiscal year ending February 1, 2020.

The affirmative vote of a majority of the voting power of the shares present and entitled to vote at the Meeting is required to ratify D&T 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 D&T to our shareholders for ratification because we value our shareholders’ views on the Company’s independent registered public accounting firm. If the appointment of D&T 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.

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ITEM OF BUSINESS NO. 3 — ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

We are providing our shareholders with an opportunity to cast an advisory vote, a “Say on Pay,” regarding our fiscal 2019 named executive officer (“NEO”) compensation program, as described in the Executive and Director Compensation section of this proxy statement.

Information About the Advisory Vote to Approve Named Executive Officer Compensation

The Compensation Committee establishes, recommends and governs all of the compensation and benefits policies and actions for the Company’s NEOs. While the advisory vote to approve the compensation of our named executive officers is not binding, it provides useful information to our Board and Compensation Committee regarding our shareholders’ views of our executive compensation philosophy, policies and practices. The Compensation Committee values our shareholders’ opinions and will take the results of the vote into consideration when determining the future compensation arrangements for our named executive officers. At the Company’s 2018 Regular Meeting of Shareholders, our shareholders voted to hold the non-binding shareholder vote to approve the compensation of our named executive officers each year. Accordingly, the Company currently intends to hold such votes annually. The next such vote is expected to be held at the Company’s 2020 Regular Meeting of Shareholders.

As detailed in the Executive and Director Compensation — Compensation Discussion and Analysis section, we believe our fiscal 2019 executive compensation program reflects market appropriate practices and balances risk and reward in relation to our overall business strategy. Our executive compensation program is focused on pay-for-performance and seeks to mitigate risks related to compensation in order to further align management’s interests with shareholders’ interests in long-term value creation.

Accordingly, we ask that our shareholders cast an advisory vote to approve the following resolution:

RESOLVED, that the shareholders of the Company approve, on an advisory basis, the compensation of the named executive officers for the fiscal year ended February 2, 2019, as described in the Executive and Director Compensation — Compensation Discussion and Analysis section and the compensation tables and related material disclosed in the Company’s proxy statement for its 2019 Regular Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission.

Board Voting Recommendation

Our Board recommends an advisory vote FOR approval of the fiscal 2019 compensation of our NEOs as disclosed in this proxy statement pursuant to the SEC’s compensation disclosure rules.

The affirmative vote of at least a majority of the voting power of the shares present, in person or by proxy, and entitled to vote (excluding broker non-votes) is required for advisory approval of our NEO compensation.

It is intended that, unless otherwise instructed, the shares represented by proxy (other than broker non-votes) will be voted “for” the advisory vote on executive compensation.

 
 
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EXECUTIVE AND DIRECTOR COMPENSATION

Compensation Discussion and Analysis

Introduction

The following Compensation Discussion and Analysis describes how the Compensation Committee of the Board decided to compensate our fiscal 2019 Named Executive Officers (“NEOs”):

Name
Principal Position
Hubert Joly
Chairman and Chief Executive Officer
Corie S. Barry
Chief Financial Officer & Strategic Transformation Officer
Mike Mohan
Chief Operating Officer, Best Buy U.S.
Keith J. Nelsen
General Counsel and Secretary (Former)
Kamy Scarlett
Chief Human Resources Officer and President, U.S. Retail Stores
Shari L. Ballard
President, Multi-Channel Retail (Former)

In July 2018, Ms. Ballard announced that she would be leaving Best Buy effective March 2019. Ms. Ballard stepped down from her responsibilities as President, Multi-Channel Retail but continued to act in an advisory capacity to assist with the transition of those responsibilities through the end of her tenure with the Company.

Ms. Scarlett took on the responsibilities as President, U.S. Retail Stores in January 2019, in addition to her existing role as our Chief Human Resources Officer.

In April 2019, we announced several additional changes to our leadership team. Following the Meeting in June, Ms. Barry will become our CEO. Mr. Joly will cont