By Dhanya Skariachan
(Reuters) - Best Buy Co Inc's
Mike Mikan also said the retailer would try to end the practice of "showrooming," which has caused it to lose sales to online retailers.
At Best Buy's annual meeting on Thursday, Mikan and other executives said the company was working to improve its online business and looking for opportunities to reduce retail square footage further than the plan, announced in March, to close 50 of its 1,100 large U.S. stores. Many investors were looking for even deeper cuts to turn around the chain.
Best Buy's share price has fallen by about 24 percent since the end of March. The stock closed down 4.1 percent at $19.48 Thursday on the New York Stock Exchange.
"We are committed to changing in fundamental ways," Mikan told shareholders. He added that he was working on a plan to make Best Buy "more relevant, more intelligent, more nimble."
Mikan, who became interim CEO after the abrupt departure of predecessor Brian Dunn in April, offered few specifics, however. He reiterated that Best Buy would outline its turnaround plan later this summer.
Dunn exited during an internal probe that eventually found he had engaged in an improper relationship with a female employee, leaving the company without a permanent CEO as it starts planning for the all-important holiday season.
Critics have complained that under Dunn's tenure, which lasted less than three years, Best Buy became a showroom for Amazon.com Inc
Ending the practice of showrooming is a top priority, Mikan said at the meeting at Best Buy's headquarters in Richfield, Minnesota.
"Their (customer's) needs have changed," he said. "We, unfortunately, have not."
On Thursday, Best Buy investors voted for a proposal to declassify the retailer's board. That would require every director to stand for re-election on an annual basis, a measure aimed at making them more accountable to shareholders.
However, they "overwhelmingly" re-elected three board members: Lisa Caputo, Kathy Higgins Victor and Gerard Vittecoq, the retailer said in a statement on Thursday evening.
Shareholders also voted against Best Buy's executive compensation plan for this year, as recommended by shareholder advisory firm ISS.
ISS's recommendation against the plan was based on the separation package paid to former CEO Brian Dunn, Best Buy said, adding that the company "will take the feedback of the shareholders under consideration in future compensation deliberations."
Corporate governance experts and former executives had criticized Best Buy's decision to pay Dunn a separation package of $6.6 million, including severance of $2.85 million in exchange for extending his noncompete agreement to three years from one year.
The company, a bellwether for the consumer electronics industry, has now posted declines in same-store sales in seven of the last eight quarters.
The retailer promised on Thursday to give more training to its employees to improve customer service to compete better with the likes of Amazon.com.
Best Buy also plans more partnerships like a recent one with AARP in which the retailer's Geek Squad helps older people with installing and repairing computers and other consumer electronics items.
Earlier on Thursday, Best Buy approved an increase in its quarterly cash dividend by 6 percent to 17 cents a share, consistent with the rise in each of the prior three years.
Best Buy's problems have been exacerbated by the recent departures of its chief marketing officer and the finance chiefs of both domestic and international businesses.
Adding to management distractions, founder and Chairman Richard Schulze, who failed to tell the board about the allegations involving Dunn, resigned from the board earlier than expected and said he was exploring options for his 20.1 percent ownership stake.
Schulze was to step down as chairman on Thursday and leave the board only in 2013, but he resigned in early June.
On Thursday, the board implemented a change to the company`s bylaws and set 25 percent as the minimum threshold of ownership required for a shareholder to call a special meeting on a change of control.
(Reporting by Dhanya Skariachan in New York; Editing by Matthew Lewis and Lisa Von Ahn)