This isn’t new news, but as I was doing research into Executive pay packages, I picked up this info from earlier this year.
On 3 January 2007, Bob Nardelli (once in line for GE top spot) left Home Depot, where he had been CEO for 6 years. Just four months earlier he had said (to AP) he would not consider leaving the company. During his years, there was a 6% drop in share price, during the time of a fairly rampant market, and the steady increase in competitor’s shares (especially Lowe’s). To be fair there was a massive drop after he joined, and the last 4 years have seen a slow and steady climb, but nevertheless, he has underperformed against the market. Home Depot, which has 345,000 staff and is second only to Wal-Mart among US shopping chains, and the world’s largest DIY store.
Nardelli had come under fire for his massive pay package (he earned $228m in his 6 years) while at Home Depot, especially since the last set of results he had presented were anything but spectacular. He had infuriated shareholders in May 2006 by refusing to take any questions during the company’s annual meeting – at which he was the only board member to turn up. He had angered unions, who were scathing about him – one sent activists dressed as chickens to Home Depot’s annual meeting to highlight the board’s lack of accountability.
But, amazingly, on leaving the company he received a $210 million compensation package that includes $20 million in cash severance and $32 million in retirement benefits. Nardelli has agreed not to compete with the company for one year, not to solicit employees or customers of Home Depot for four years, and other conditions – if he complies he could be entitled to a further $18m or so. (Although, as one blogger points out, surely with his record, you would want him to go to a competitor).