Home Depot Takes Heat for Pay and Board
By George Anderson
Shareholders at Home Depot’s stock meeting were quick to criticize Chairman and CEO Robert Nardelli for his compensation package as well as a the perceived lack of independence of the company’s board.
Yesterday’s shareholders’ meeting was seen as being out of the ordinary for a number of reasons.
Mr. Nardelli’s compensation package was brought up a number of times, but discussion of the issue was quickly quashed by the Home Depot CEO as not being applicable to the business of the meeting.
One investor, reports Reuters, upset over Mr. Nardelli’s refusal to answer questions said, “Arrogance will kill you. If you aren’t humble and decent, you will destroy this company.”
Richard Ferlauto, director of pension and benefit policy for the American Federation of State, County and Municipal Employees, also criticized the Home Depot CEO.
“While you have been handsomely compensated, the stock price has languished,” he said.
Since Mr. Nardelli took over the reigns at the home improvement chain in 2000, the company’s stock price has fallen 15 percent. According to public filings, Home Depot’s CEO has earned nearly $120 million over that period, not including stock options and other miscellaneous compensation.
Many others questioned why no members of the company’s board of directors were at the meeting. A number of institutional investors supported a no vote against reelecting members of the board over their apparent lack of independence.
Richard Metcalf, corporate affairs director for Laborers International Union of North America, told Reuters, “One would have thought that (directors) would have wanted to bend over backward and answer questions and convey a sense of being open. The attitude of the CEO toward the board tends to match the reporting that this is a clubby board, out of touch with its stakeholders.”
Moderator’s Comment: Are Robert Nardelli and the Home Depot Board of Directors in serious danger of losing the confidence of the company’s stakeholders?
Will Mr. Nardelli’s apparent lack of responsiveness at yesterday’s annual shareholders’ meeting have any effect on the company’s rank and file or its suppliers? –
George Anderson – Moderator