CEO's pay irks Home Depot investors
Shareholders could stage showdown with management at annual meeting over right to vote on executive compensation, report says.
NEW YORK (CNNMoney.com) - A showdown could occur at Home Depot's annual shareholder meeting Wednesday as some shareholders and activist groups prepare to seek the right to vote on CEO Robert Nardelli and other executives' annual compensation packages, according to a report published Wednesday. The New York Times reported that some firms that advise large shareholders are also urging shareholders to withhold votes from several directors and plan a rally outside the meeting in Wilmington, Del., to protest Nardelli's "excessive pay" package. According to the report, Home Depot (Research)'s board has awarded him $245 million in his five years at the helm. Yet during that time, the company's stock has slid 12 percent while shares of its archrival, Lowe's (Research), have climbed 173 percent. The No. 1 home improvement retailer angered investors again last week with its surprising decision to stop reporting company sales at stores open at least a year - a key retail measure known as same-store sales - going forward. Analysts frowned on the move, calling it "strange" and "irresponsible." Angered by what they called "Nardelli's weak performance, high pay, free loans, guaranteed bonus and extravagant retirement package," the A.F.S.C.M.E, the government workers' union, said it will urge directors to take steps to constrain excessive compensation at the Home Depot. In a statement Tuesday, the group said that despite Home Depot's weaker stock performance, Nardelli has collected more than $150 million in compensation, whereas Lowe's CEO Robert Niblock has received less than $35 million. "It is clear that there is a huge disconnect between CEO performance and reasonable standards of pay at Home Depot," A.F.S.C.M.E International President Gerald McEntee said in a statement. The A.F.S.C.M.E proposal would allow Home Depot shareholders to approve or reject the company's executive compensation report, the Times said. However, even if the proposal is accepted, any future rejection of the board's compensation report would be merely symbolic since the board can simply ignore shareholders and pay executives what they wish, the newspaper said. So far, similar proposals have been rejected at two other companies whose executive pay A.F.S.C.M.E. identified as a problem: Merrill Lynch and U.S. Bancorp. The Home Depot board is urging its shareholders to vote against the proposal, the newspaper said. None of the current or former members of Home Depot's compensation committee returned calls seeking comment. Nardelli also could not be reached for comment, the newspaper said. Home Depot shares closed lower Tuesday. ______________ Defiant Home Depot = worried investors. Click here for more. |
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