Home Depot's Board Dodges Shareholders

All but one of Home Depot's 11-member board of directors was a no-show at the company's annual meeting Thursday, where several proposals questioned the huge executive compensation paid to CEO Robert Nardelli.

Nardelli was the only board member present at the meeting, which ended quickly because he didn't give the customary speech and took no questions from the audience.

In a statement prepared in response to this article, the retailer said that, although its approach to the annual meeting this year was a departure from past practice, it should not be seen as a lack of respect for shareholders or a lessening of its commitment to sound corporate governance and transparency.

I know it's quaint to believe that publicly traded companies serve at the discretion of their shareholders, but this demonstrates outright contempt for the idea:

Each time Mr. Nardelli was addressed by someone presenting a shareholder proposal, he let them speak but then replied firmly that Home Depot's directors had urged voting against it, and moved on to the next agenda item. After about 30 minutes, Mr. Nardelli said "preliminary" results indicated that the company's slate of director nominees had been elected, adding that the only proposal to win a majority of shareholder votes was a recommendation led by the United Brotherhood of Carpenters pension fund to change the director-election process to require that nominees receive a majority of votes.
Mr. Nardelli then adjourned the meeting and left the building.

Home Depot's leadership must not believe there's even the slightest possibility any of them will be accountable for their decisions, and they seem to be right: The entire board was re-elected for another term.

Business · 2006/05/27 · 11 COMMENTS · Link

Comments

As a shareholder you should sue Nardelli, the directors and the company. I'm pretty sure you can find a competent attorney to take the case pro bono and, in the wake of Enron et al, have a decent chance of making serious waves.

#1 · BillSaysThis · 2006/05/27

I couldn't believe this when I first read about it in the Times this morning. I'm thinking of taking my business elsewhere -- I don't want to do afavor for a prick like Nardelli.

#2 · Stunned by the arrogance · 2006/05/27

Send Home Depot an email and tell them that you're outraged and that you'll find another hardware store to go to. A company run by a guy like Nardelli doesn't deserve our business.

#3 · visitor · 2006/05/27

This is the link to the Home Depot website to submit a comment...

Link

#4 · Nardelli's the Worst · 2006/05/27

Outrageous conduct. I will no longer be a HD customer until Nardelli is out. Hello Lowe's, true value, ...anyone but HD

#5 · Peter Levine · 2006/05/30

Home Depot: Calling Off the Dogs

In the wake of shareholder outcry at the way Home Depot's annual meeting was handled last week (as I blogged about a few days ago - also see this WSJ editorial), Home Depot issued this press release yesterday noting that next year's shareholder meeting will return to "normal" (ie. shareholders will be permitted to ask questions and directors will attend).

In addition, the company announced that it intends to implement "majority vote measures" since a shareholder proposal seeking a majority vote standard received support from 56% of those voting. It will be interesting to see what those "measures" comprise of given that 10 of Home Depot's 11 directors received high levels of withheld votes: over 30% (the only director not receiving a similar level is a brand new director). According to this WSJ article, these high levels are mainly due to anger over CEO pay. Depending on the math, if broker non-votes were not counted and a majority vote standard had been in place, this board might have been gone!

Interestingly, Home Depot has landed near the top of the ISS CGQ scoring system in recent years (99.6% right now) - which can be taken one of two ways, either the conduct of this meeting was an aberration or CGQ scores should be taken with a grain of salt...

Thanks, Broc Romanek
Editor, TheCorporateCounsel.net

#6 · Broc Romanek · 2006/06/02

I work for the home depot,I've been there for 10 years.ever since Mr. Nardelli took over I have seen nothing but squeezing the bottom line to make the upper crust excel.It seems as if the company is headed for disaster,but of course the (filthy rich)board of directors are blinded by $$$$$$$$$$$.The average employee has seen their raises go from 1.00 twice a year to .50 a year now to a minimal.125 to .25 cent raise Gee thanks Bob and company.whatever happened to the phrase "shape up or ship out"? I have also seen the customer service at home depot decline in recent years.If the boss (bob Nardelli)doesnt take care of us why should we do our best to help pad his pockets.this is the overwhelming feeling amongst most of my coworkers.It has become just a place to work and collect a check.The fools who believe its a great company need to observe Mr. Nardelli and his elite crew of G.E kronies a little better.Please forward this letter to someone of importance and maybe the sun will come out again for The Home Depot that once was great............thanks

#7 · visitor · 2006/06/05

#8 · Jeff Long · 2006/06/05

Maybe Tom Ridge wasn't as stupid as most people thought he was when he began pimping duct tape as an adequate response to bioterrorism. If nothing else he was rewarded by Home Depot by his appointment as a Director for increasing the sales of duct tape.

#9 · Fred T. Angelilli · 2006/08/09

When I was hired to work for the Home Depot I was sold a bill of goods including what they called "entrepenural spirit". Basically I was told that as an employee and a shareholder that I had a voice. There was a pride in wearing the orange apron. Customer service was our #1 priority. There were knowledgable people on the floor who actually could help people with their projects. People who were employed there made a decent salary for retail. There were classes given weekly to all employees on varying products and their applications so that employees could potentially assist customers throughout the store with confidence. When Nardelli took over, this all came to a screeching halt. Salaries were capped, your "entruprenural spirit" gone... Everything was to be mapped out and the same from store to store. They implemented a "Freight team" to pack out the freight overnight with half of the hours required to effectively do it. Now with several stores doing business that far exceeded the dollar amount intended they still cannot alot the funds to properly run them. Overtime must be cut (usually always) and yet there are not enough people to keep up with the demands that the store brings. The employees are stressed out and angry that they can not get more that a few cents a year increase yet if they stay after hours to help a customer they have to cut this time and can not recieve overtime. They can only cut this time during the week, God forbid you leave a few minutes early on a Saturday or Sunday. Meanwhile the store is still doing 90 million a year and you sit there with your quarter at the end of it while the big guy gets his millions. It is a bit hard to swallow. Especially when the store looks like a shit hole.

#10 · Another former employee · 2006/09/23

They implemented a "Freight team" to pack out the freight overnight with half of the hours required to effectively do it. Now with several stores doing business that far exceeded the dollar amount intended they still cannot alot the funds to properly run them. Overtime must be cut (usually always) and yet there are not enough people to keep up with the demands that the store brings* Right

#11 · Robota · 2007/04/16