Home Depot CEO Builds Huge Nest Egg

I own some Home Depot stock, so I'll be casting 30 of the 2.1 billion votes at the 2006 annual meeting Thursday. The proposals are usually dull, but there's a nice snarky one this year about excessive executive compensation that blasts company CEO Robert Nardelli:

In our view, senior executive compensation at Home Depot has been excessive in recent years. In each of the last three years, CEO Robert Nardelli has been paid a base salary of more than $1,800,000, well in excess of the IRS cap for deductibility of non-performance-based compensation. His bonus in each of those years has been at least $4,000,000, and he was awarded restricted stock valued at over $8,000,000 in 2002, 2003 and 2004. Mr. Nardelli has also received a disturbingly large amount of compensation in form of "loan forgiveness" and tax gross-ups related to that forgiveness, which totaled over $3,000,000 in each of the past three years.

We believe that the current rules governing senior executive compensation do not give stockholders enough influence over pay practices. In the United Kingdom, public companies allow stockholders to cast an advisory vote on the "directors remuneration report." Such a vote isn't binding, but allows stockholders a clear voice which could help reduce excessive pay. U.S. stock exchange listing standards do require shareholder approval of equity-based compensation plans; those plans, however, set general parameters and accord the compensation committee substantial discretion in making awards and establishing performance thresholds for a particular year. Stockholders do not have any mechanism for providing ongoing input on the application of those general standards to individual pay packages. (See Lucian Bebchuk & Jesse Fried, Pay Without Performance 49 (2004))

During the six years Nardelli has led Home Depot, he's earned $154.3 million plus millions more in stock options. The company's stock price dropped 6 percent last year and is lower than when he arrived in 2000, while in the same period, Lowe's delivered 200 percent return for its shareholders. "The board at Home Depot has rewarded Nardelli for mediocre to poor performance," Paul Lapides, director of the corporate governance center at Kennesaw State University, told the Atlanta Journal-Constitution. "The pay for Lowe's former chairman is a quarter of Nardelli's annual pay, and Lowe's has outperformed Home Depot in the last six years."

Home Depot stacks the deck against shareholder proposals by obscuring the identity of the proponent, and the board of directors recommends a vote for or against each one. (They're against more scrutiny of executive compensation.)

One of the company's largest shareholders, the California Public Employees' Retirement System, came out in favor of this proposal last week.

A second proposal's even more blunt about Nardelli, calling for the company to stop letting one person serve as CEO and chairman of the board:

The pay-for-failure, pay-for-success, pay-for-anything-at-all attitude displayed by our board calls into serious question its effectiveness. ...

It is well to remember that at Enron, WorldCom, Tyco, and other legends of mis-management and/or corruption, the Chairman also served as CEO.

Stocks · Business · 2006/05/22 · 49 COMMENTS · Link

I Enjoy Particularly Rigorous Specs

James E. Robinson III has a confession to make:

I read specs. While sometimes messing with specs turns into a waste of time. Many times understanding the spec can keep you out of trouble. The problem is that specs are tedious, but the reality is that they have to be. Nothing is worse than a poorly written spec.

Being patient and weeding thru specifications helps you understand not just how something is designed to work, but why. I used to read specs because i had to; now i read them because i want to ... even the boring ones.

I have evolved into a spec-reading, spec-writing, specs-crazed dork during my time on the RSS Advisory Board. I now take pride in my personal compliance with RFC 2119, both in the documentation that I write and in everyday conversation. You SHOULD read it. I RECOMMEND it highly.

I used to think there was a virtue in less precise, more readable specs because they are much less intimidating to new implementers of a format. The success of XML-RPC has been driven in part by how easy the spec is to understand at first read.

But making software interoperate well is a hard job that becomes significantly harder when a spec lacks precision. An incredible amount of time can be burned on arguments over interpretation, especially when a programmer is told that his code doesn't meet a spec.

Matt Mullenweg of WordPress, a programmer so militant about web standards that he once called for a boycott of LockerGnome because it used HTML tables for layout instead of Cascading Style Sheets, recently flipped out when WordPress RSS feeds were declared invalid by the Feed Validator.

The validator had been relying on incorrect capitalization of a namespace element called wfw:commentRSS. When informed that it was wfw:commentRss instead, Sam Ruby updated the validator to follow the wfw spec.

Mullenweg, hearing from users expecting him to change his code so that their feeds passed the validator, declared that "the Feed Validator is dead to me:"

Here is a post on their mailing list which also explains the issue and includes a link to the archive.org version of the page with the capitialization everyone uses, which was there for at least two years. One line can cause so much trouble.

One line can cause an incredible amount of trouble, which is why every line in a spec has to be precise, thoroughly vetted, and developed within a framework for resolving disagreements and moving on.

I know this will sound ridiculously pedantic to programmers who are sane enough to stay away from specification development, but you have to write these documents in such a rigorous manner that every use of "should," "may", and "must" means exactly the same thing. You have to read them like a Supreme Court jurist poring over the U.S. Constitution.

An easy-to-read spec is like an adjustable-rate mortgage. You get in cheap, but you have absolutely no way of knowing how costly it will be in the long run.

Rss · Atom · 2006/05/19 · 7 COMMENTS · Link

These Laser Pointers Are Too Wicked

Earlier this week, I began running an ad purchased by a company that sells 15 to 300 milliwatt laser pointers with some pretty grandiose claims:

Used by the US Army! Slash, Cut Tape, Pop Balloons, Ignite Matches, Light Cigarettes, Sizzle Plastic, and Start Fires. Powered by a Sony diode.

Another blogger who runs their ads bought a laser and calls them insanely powerful:

Most laser pointers commercially available today top out at 5mW. The "Extreme Nexus" model that was sent to me rates at 95mW (they got some 300mW models, by the way). And let me tell you something, that's a difference that's really hard to miss. The laser is green, and is plainly visible without smoke, fog or dust, especially in dimmer settings. Not only that, but it actually burns. Yeah, the kind of burning that you can feel on your skin. And yes, it does light matches, it burns through dark plastic things and pretty much looks like a freaking light saber that extends for miles and miles into the sky.

I pulled the ad this morning after finding out more about the capabilities of these lasers, which I wrongly believed were comparable to toys, and their legal status for sale in the U.S.

A laser pointers guide published by the Food and Drug Administration states that pointers above 5 milliwatts only can be sold in the U.S. for commercial uses such as land surveying. They cannot be sold as amusement or pointing devices and are subject to seizure when imported into the country:

Irresponsible use of more powerful laser pointers poses a significant risk of injury to the people exposed. Persons who misuse or irresponsibly use lasers are open to personal liability and prosecution.

The company, which is based in China, has been warned by the FDA to follow product warning and compliance laws.

Though it does not appear illegal to run the ads, I don't accept ads for products that could get their American customers in legal trouble. I've rejected ads for absinthe and Cuban cigars on the same grounds.

· 2006/05/19 · 43 COMMENTS · Link

Texas Lottery Winner's Identity Kept Secret

The state of Texas is hiding a lottery winner's identity, refusing to release the name of the winner of a $64 million drawing Feb. 8.

A press release published by the Texas Lottery Commission calls the winner "The AB Revocable Living Trust" as if that were the name of a corporate entity, but an A-B revocable living trust is a form of estate that minimizes estate taxes by splitting marital assets into separate shares for each partner.

I've never heard of a state lottery that would keep a winner's identity private. Releasing the names is the only way the public can be assured that the state isn't keeping the money, as I was told years ago by a Texas Lottery Commission spokesperson when I wrote a question-and-answer column for the Fort Worth Star-Telegram.

2006/05/19 · 187 COMMENTS · Link

Six Minute Preview of Sorkin's Studio 60

Before NBC gets it pulled as a copyright violation, check out the six-minute preview of Studio 60, Aaron Sorkin's new fall series about a legendary but washed-up late-night comedy show.

I haven't been interested in the series, because television shows about television are like blogs about blogging -- they should be opposed on principle. But the promo, which NBC showed to the press during its upfront event, looks as great as West Wing did when it began.

Does anyone know what series it could possibly be based on?

Television · 2006/05/18 · 2 COMMENTS · Link

Dick Cheney's No Dick Nixon

In his famous Checkers speech in 1952, Richard Nixon was so aggrieved by allegations he misused $18,000 in political funds that he ran down an itemized list of his personal finances, showing the world that he hadn't grown rich in public life:

I have made an average of approximately $1,500 a year from nonpolitical speaking engagements and lectures. And then, fortunately, we've inherited a little money. Pat sold her interest in her father's estate for $3,000 and I inherited $l,500 from my grandfather.

We live rather modestly. For four years we lived in an apartment in Park Fairfax, in Alexandria, Va. The rent was $80 a month. And we saved for the time that we could buy a house.

Now, that was what we took in. What did we do with this money? What do we have today to show for it? This will surprise you, Because it is so little, I suppose, as standards generally go, of people in public life. First of all, we've got a house in Washington which cost $41,000 and on which we owe $20,000. We have a house in Whittier, California, which cost $13,000 and on which we owe $3,000. My folks are living there at the present time.

I have just $4,000 in life insurance, plus my G.I. policy which I've never been able to convert and which will run out in two years. I have no insurance whatever on Pat. I have no life insurance on our our youngsters, Patricia and Julie. I own a 1950 Oldsmobile car. We have our furniture. We have no stocks and bonds of any type. We have no interest of any kind, direct or indirect, in any business.

Now, that's what we have. What do we owe? Well, in addition to the mortgage, the $20,000 mortgage on the house in Washington, the $10,000 one on the house in Whittier, I owe $4,500 to the Riggs Bank in Washington, D.C. with interest 4 1/2 per cent.

I owe $3,500 to my parents and the interest on that loan which I pay regularly, because it's the part of the savings they made through the years they were working so hard, I pay regularly 4 per cent interest. And then I have a $500 loan which I have on my life insurance.

Well, that's about it. That's what we have and that's what we owe. It isn't very much but Pat and I have the satisfaction that every dime that we've got is honestly ours. I should say this -- that Pat doesn't have a mink coat. But she does have a respectable Republican cloth coat. And I always tell her that she'd look good in anything.

Vice President Cheney, who has spent all but five of the last 35 years as a public servant, has amassed a net worth of $94 million during that time.

That would buy a lot of Republican coats.

Politics · 2006/05/16 · 15 COMMENTS · Link

Jake Savin Has Been Assimilated

Jake Savin recently left UserLand Software for a move to Microsoft:

I've accepted a new job as technical program manager at Microsoft, working on the MSN/Windows Live team, and Monday morning I begin my first day of work.

It's been a very productive six years at UserLand, which has seen blogging go from obscurity to commonplace, RSS and XML-based syndication go from experimental to mainstream (even required), web services go from dream to business model, and podcasting go from non-existent to the big time.

I've relied on Savin often over the years for help with UserLand's publishing and programming tools, especially when I was writing Radio UserLand Kick Start. I didn't know he was also a music mogul in Dallas until he joined the RSS Advisory Board and I had to write his bio.

Rock on, Jake!

2006/05/16 · Comment · Link

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