Cramer's 'Mad Money' Recap: In Praise of CEOs
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#1 Jul 26, 2010
ATLANTA — Bob Nardelli said he had no intention of stepping down. His board said it didn’t want anybody else. But in the end, analysts said, the criticism over Nardelli’s hefty pay and The Home Depot Inc.’s poor stock performance forced a change of heart.
Nardelli abruptly resigned as chairman and chief executive of the world’s largest home improvement store chain after six years at the helm, the company said Wednesday.
He didn’t leave empty-handed: the Atlanta-based company said Nardelli would receive a severance package worth roughly $210 million, an amount decried by some lawmakers as a golden parachute that sends the wrong message to investors.
“It’s a sign of being totally out of touch,” said Rep. Barney Frank, D-Mass., the incoming chairman of the House Financial Services Committee.“They don’t understand the extent to which they make the American public angry.”
Frank said he would push for legislation requiring public companies to allow shareholders to have a say in compensation and severance for senior executives. At Home Depot’s annual meeting last May, shareholder proposals to give investors a say on the CEO’s pay and to restrict retirement benefits for senior executives were rejected.
Nardelli’s severance package includes a cash payment of $20 million and the acceleration of unvested deferred stock awards currently valued at roughly $77 million. A Home Depot spokesman said the timing of the resignation, which was effective Tuesday, had no bearing on the amount in the package.
The total package is seven times the $30 million Home Depot set aside last June for stores and employees that provide good customer service. Home Depot has 2,127 stores and 355,000 employees in the United States, Canada, Mexico and China
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