Home Depot shareholders sue, ask judge to freeze Nardelli's $210 million severance payment

http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20070111-000930-1541

Shareholders Fight Nardelli's Severance Pay

CHICAGO (Dow Jones) -- Home Depot Inc. investors are asking a Georgia judge to block the retailer from giving $210 million in severance to former Chief Executive Robert Nardelli, in the latest demonstration that executive pay packages are outraging shareholders.


Shareholders, led by the Pontiac, Mich.'s public-employee retirement fund, have filed a request for a temporary restraining order in Superior Court of Fulton County, according to published reports.


The Pontiac fund filed a lawsuit in September charging that Atlanta-based Home Depot (HD) executives and its board members backdated options and had given Nardelli, who was hired in October 2002, an exorbitant amount of money. The company has admitted to the backdating, but said it was done before Nardelli's time.


Home Depot spokesman Jerry Shields said the company could not comment on the request.


Nardelli resigned last week with a $210 million package, which included a $20 million severance check and about $77 million in deferred stock rewards, among other payments. The severance pay, dictated by a contract, comes on top of multimillion-dollar wages and compensation that Nardelli already has received.


The legal action shows how CEO pay is likely to be the hot button for shareholders this year, dominating proxies and annual meetings.

CEOs of US public corporations have been ripping off investors and employees for 20 years. Every year there is outrage but nothing is done. The Democrats have had this issue handed to them on a platter that most American citizens see as greedy and unfair. Only the Business Roundtable would oppose that something being done.

I believe that laws should be established giving shareholders a direct vote in all senior management compensation plans over and above a marginal compensation amount, and also tying or limiting senior management compensation in pensions or special bonuses to a multiplier of median worker compensation. In short it must be controlled as their greed is taking out of the overall US economy for a limited number of elite individuals that have zero accountability.

I have always supported the pay that LLoyd Blankfein got at Goldman Sachs and what Mack got at Morgan Stanley. However, those guys did great things for their companies that have benefited BOTH employees and shareholders tremendously. I commend their efforts and their huge bonuses were justified. So, I am not as far to the left as most people on this board.

Nardelli, on the other hand has his company's stock in the shitter. It is an absolute outrage that someone can be such a fuckup and get so much compensation - in fact, he got quite a lot more than both Blankfein and Mack - COMBINED! Blanklfein and Mack played integral roles in the profitability of their companies. Blankfein was a head of trading for a group that made a ridiculous number of billions before Hank Paulson left the job of CEO for Sec of Treasury - Blankfein filled his spot and got a justified bonus - he would have had that bonus even if he were not promoted to CEO - the heads of trading usually make as much as, and even more than the CEOs quite often - others at Goldman made more than Blankfein this year in fact, but they made more money for the bank in trading that did Blankfein I guess. Look at a chart for HD for the last ten years - it has done terribly. Had HD's stock quadrupled during his tenure with a rosy outlook ahead, I would say the pay is justified and that he earned it (such things do not occur by luck) - remember that a lot of pension and other retirement money is tied up in HD stock. Employees are treated better in those circumstances too(unless you are at WMT :( ).

The guy should have been fired long ago and given $250K while he looks for another job. Fuck him.

My aspirations of getting an eight digit salary for not working at Home Depot have just evaporated.