According to CNN Money, Best Buy has been having difficulty with founder Richard Schulze regarding his attempts at buying out the company's remaining shares. In a statement this past Sunday, Best Buy stated that initial negotiations with Schulze were "routine and normal." Schulze then issued a statement saying that Best Buy was looking to put an eighteen month standstill on Schulze's ability to purchase stock in the company. Schulze's group would gain access to non-public information regarding the company's finances during that time, and would be able to make a full proposal to the board within sixty days, as part of the deal.

Best Buy then changed the terms of the agreement, shortening the deal to around January 2013, right after the holiday shopping season. "The board proposed that Mr. Schulze, beginning in January, be allowed to take his buyout offer to shareholders," Best Buy said, in a press release. "Mr. Schulze did not accept the company proposal."

Surprised by the statement issued by Best Buy, Schulze said "I am shocked by this course of action. But as the largest shareholder of Best Buy, I remain hopeful that the Board will engage in good faith discussions with us for the benefit of shareholders, employees and customers," he added, "time is of the essence, and it is imperative that shareholders' interests are not further jeopardized."

Best Buy's stock slipped 8%, however, shares jumped as much as 20%, noting a sharp contrast in behavior the day Schulze announced his intentions of regaining control of the company on August 6, 2012. Best Buy later announced that Hubert Joly, former chief executive of Carlson Wagonlit Travel was hired to replace the former CEO. Joly is expected to take control of the company in September once his work visa is issued.

Best Buy has since re-entered negotiations with Schulze, hopefully on better terms, especially with Joly's pending arrival to steer the ship.

Who Is Hubert Joly?

Former CEO Brian Dunn stepped down after being accused of an inappropriate relationship with an employee. Schulze, who was Best Buy's chairman at the time of the Dunn situation, stepped down for not disclosing his knowledge of Dunn's relationship after learning about it in December. Joly, according to ABC News, is something of a "turnaround guy," offered $32 million from Best Buy as his compensation package.

Joly, a native of France, is guaranteed $6.25 million should he not be able to obtain a visa to work in the United States by the end of September. His base salary will be about $1.175 million, plus additional cash and stock options and rewards. The payment has drawn some criticism, however, spokesperson Maggie Habashy explained the reason for the $6.25 million even if Joly's unable to obtain his visa, "is a one-time payment intended solely to make Mr. Joly whole for the outstanding compensation he left behind in departing Carlson, his previous employer."

Habashy stated, "the amount that can accurately be described as compensation going forward is weighted approximately 90 percent to variable incentives, the value of which will depend on how operational goals are met and movements in share price." She then said "The cash compensation is squarely in the mid-range for a CEO of a company the size of Best Buy," Habashy added, "this package was developed in consultation with leading search and compensation firms and is in-line with best practice for Fortune 50 companies."

According to the ABC News article, Joly's pay is in line with most other modern CEOs. Aaron Boyd, a director at Equilar (a compensation research firm) stated "Beyond the annual pay, he'll likely get the most amount of value from make-whole awards meant to compensate him for leaving Carlson and the value he gave up by leaving there," adding "it is not unusual for a company to give out awards to make up for what had to be given up."

Joly has around fifteen years of experience working with tech and media companies, including Activision/Blizzard, publishers of both the "Call Of Duty" and "World Of Warcraft" franchises. According to The Wrap, Joly will also serve on the board of directors. "Hubert was an outstanding candidate for this position and I am confident he will be a great fit for Best Buy," chairman of the board Hatim Tyabji said in a statement.

Shareholders Feeling Caught In The Middle

The board of directors and the conflict with Schulze have places shareholders in a difficult position. The comparison made by Fortune is that of children watching as their parents fight. Schulze, who owns 1.7 million shares of Best Buy stock, feels that the direction of the board is weakening investment in the company, however; the board sees Schulze as part of the old problem that put Best Buy in the difficult position it's currently in.

Should both sides find a way to amicably resolve the situation in the best interests of the shareholders, Best Buy would find itself on top. A smooth transition to Joly's reign as CEO of the company, backed by full support of the board and Schulze (who would regain a spot on the board himself), followed by a profitable holiday season would see a literal win-win for both Best Buy and its shareholders.

Both sides of the argument issued a joint statement: "We have entered into private negotiations over the future of Best Buy, and a possible buyout offer for the company. An offer may be made privately any time before year-end, and the board will announce the receipt of any offer and its recommendation shortly thereafter. If the offer undervalues the company, Mr. Schulze has the ability to submit an improved offer at his discretion. Mr. Schulze also has agreed to work with the board, and will not attempt any sort of hostile takeover of Best Buy."

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