Home Depot CEO silences pay critics
By Harry R. Weber
By Harry R. Weber
ATLANTA — The Home Depot Inc.'s chief executive did little yesterday to quell the uproar among some shareholders over his hefty pay, stifling debate at the company's annual meeting as the board members who approved the compensation didn't show up to defend themselves.
Despite the criticism and some institutional shareholders withholding votes, the company's directors were all re-elected. Shareholder proposals seeking to allow investors to have a say on the CEO's pay and to restrict retirement benefits for senior executives were rejected.
The only shareholder proposal to pass was one changing the voting structure for the election of directors.
Besides CEO Bob Nardelli, who is board chairman, none of the other directors of the Atlanta-based company attended the meeting in Wilmington, Del. Home Depot said in a statement that many of the directors were handling business at the company headquarters.
Nardelli did not allow shareholders to ask general questions, ending the meeting, which was broadcast on the Internet, after 30 minutes. He also did not respond directly to any of those investors who were allowed to address him about the proposals.
"This is not the forum in which we would address your comment," Nardelli told one shareholder representative who asked him what he would do to make board members more independent. "We certainly receive your comment."
Another shareholder representative asked him about his pay, to which Nardelli responded, "This is about the election of directors, not about compensation. We'll move on at this point."
After just a few people spoke on the proposals, Nardelli announced the voting results, adjourned the meeting and headed for the airport. A spokesman said Nardelli would not be granting interviews with reporters.
Shareholders were upset because Nardelli has received $123.7 million in compensation, excluding certain stock option grants, since taking over as CEO in December 2000, according to proxy statements. The handsome pay has come even though the company's stock price has dropped 9 percent over that period on a split-adjusted basis.
The option grants, if they were to be exercised, would add tens of millions of dollars to Nardelli's compensation.
Shares of rival Lowe's Companies Inc. have increased 185 percent, on a split-adjusted basis, over the same period Nardelli has been Home Depot's CEO.
In the last fiscal year, Nardelli earned $29.7 million, or $37.9 million including the value of stock options granted to him. Lowe's CEO Robert Niblock earned $7.8 million in the same period, excluding options granted. The company's proxy for the last fiscal year does not say how much Niblock's options were worth at the time they were granted, only what they would be worth based on a certain rate of return.
Also yesterday, Lowe's, which is based in Mooresville, N.C., held its annual meeting. It re-elected four directors, and Lowe's shareholders approved several proposals, including one that amended the company's articles of incorporation to set the minimum number of directors at three and another that changed the voting standard from plurality to a majority of votes cast.
Associated Press writer Randall Chase contributed to this report from Wilmington, Del.