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Home Depot's CEO hammered over pay
By Mark Clothier and Mary Jane Credeur
Bloomberg News
Shareholders of Home Depot Inc. said yesterday that chief executive officer Robert Nardelli was overpaid during the last 51/2 years as the stock tumbled 15 percent.
Nardelli made $37.9 million in 2005, ranking 10th in compensation among CEOs last year, according to a Bloomberg analysis of 492 companies with $3 billion or more in market capitalization. Nardelli has collected compensation valued at $256 million since he took over in December 2000.
"While you have been greatly compensated, the stock has been flat," Richard Ferlauto, director of pension and benefit policy for the American Federation of State, County and Municipal Employees, told Nardelli at the company's annual shareholders meeting yesterday in Wilmington.
Shareholder proposals seeking disclosure on compensation highlight the growing dissatisfaction among some investors with Nardelli's performance since he arrived from General Electric Co. During Nardelli's tenure, Home Depot shares have fallen while shares of rival Lowe's Cos. Inc. have tripled.
Shareholders asked that the company's compensation committee disclose more information, including how they determined Nardelli's salary. The requests, which came in the form of nonbinding resolutions, were defeated, Home Depot said without providing details.
Nardelli did not respond to comments from shareholders except to thank them for their remarks. There was no general question-and-answer period that is common at annual meetings. The meeting lasted about 45 minutes.
The Atlanta-based company's stock rose 39 cents to $38.40 in New York Stock Exchange trading.
About a dozen shareholders spoke at the meeting; all were critical of Home Depot's pay packages and other corporate-governance practices, such as not having any directors other than Nardelli attend the annual meeting.
"This is a closed circle, with executives and directors on the inside and stakeholders on the outside," said Richard Metcalf, director of corporate affairs for the Laborers International Union of North America, which sponsored a proposal seeking to limit what it called "extraordinary retirement benefits."
"The board didn't bother to show," Metcalf said. "They refused to allow questions. People were waiting in line to speak, and they just cut the microphones. I'm offended."
Revenue has increased 52 percent to $81.5 billion since fiscal year 2002, Nardelli's first full one as CEO, on increased sales to general contractors amid a rising housing market. Net income has increased 92 percent over that same period even as the stock has declined.
"We are very concerned that this is a company where we are paying for failure, not for performance," Christianna Wood, senior investment officer for the California Public Employees' Retirement System, said yesterday in an interview. Calpers owns about 10.3 million Home Depot shares among its $210 billion in assets, and it supported the proposal to allow shareholders to vote on executive pay.
Home Depot's CEO hammered over pay
By Mark Clothier and Mary Jane Credeur
Bloomberg News
Shareholders of Home Depot Inc. said yesterday that chief executive officer Robert Nardelli was overpaid during the last 51/2 years as the stock tumbled 15 percent.
Nardelli made $37.9 million in 2005, ranking 10th in compensation among CEOs last year, according to a Bloomberg analysis of 492 companies with $3 billion or more in market capitalization. Nardelli has collected compensation valued at $256 million since he took over in December 2000.
"While you have been greatly compensated, the stock has been flat," Richard Ferlauto, director of pension and benefit policy for the American Federation of State, County and Municipal Employees, told Nardelli at the company's annual shareholders meeting yesterday in Wilmington.
Shareholder proposals seeking disclosure on compensation highlight the growing dissatisfaction among some investors with Nardelli's performance since he arrived from General Electric Co. During Nardelli's tenure, Home Depot shares have fallen while shares of rival Lowe's Cos. Inc. have tripled.
Shareholders asked that the company's compensation committee disclose more information, including how they determined Nardelli's salary. The requests, which came in the form of nonbinding resolutions, were defeated, Home Depot said without providing details.
Nardelli did not respond to comments from shareholders except to thank them for their remarks. There was no general question-and-answer period that is common at annual meetings. The meeting lasted about 45 minutes.
The Atlanta-based company's stock rose 39 cents to $38.40 in New York Stock Exchange trading.
About a dozen shareholders spoke at the meeting; all were critical of Home Depot's pay packages and other corporate-governance practices, such as not having any directors other than Nardelli attend the annual meeting.
"This is a closed circle, with executives and directors on the inside and stakeholders on the outside," said Richard Metcalf, director of corporate affairs for the Laborers International Union of North America, which sponsored a proposal seeking to limit what it called "extraordinary retirement benefits."
"The board didn't bother to show," Metcalf said. "They refused to allow questions. People were waiting in line to speak, and they just cut the microphones. I'm offended."
Revenue has increased 52 percent to $81.5 billion since fiscal year 2002, Nardelli's first full one as CEO, on increased sales to general contractors amid a rising housing market. Net income has increased 92 percent over that same period even as the stock has declined.
"We are very concerned that this is a company where we are paying for failure, not for performance," Christianna Wood, senior investment officer for the California Public Employees' Retirement System, said yesterday in an interview. Calpers owns about 10.3 million Home Depot shares among its $210 billion in assets, and it supported the proposal to allow shareholders to vote on executive pay.
