Bob Nardelli, the chief executive of the American DIY chain Home Depot, agreed to quit yesterday after falling victim to a shareholder revolt over his oversized pay packet. But he ignited one final storm of protest with a severance package valued at $210m (£108m).
The pay-off , which marks the end of Mr Nardelli's six years at the helm of the retailer - over which time the shares fell 8 per cent - has roused Democrat politicians to promise new laws on pay.
Dissident shareholders were promising a showdown at the company's annual meeting in the spring, and were demanding an investigation into pay, management controls and strategy. Home Depot said Mr Nardelli agreed to quit at a board meeting on Tuesday and had already left.
The departure was cheered on Wall Street and by company employees. Workers have been furious at the scale of their boss's pay and been further fuelled by criticism of company strategy. Shares in Home Depot rose 2.3 per cent for the second biggest gain in the Dow Jones index. The company now looks more vulnerable to a takeover. It has been said to be in the sights of private equity groups mulling what, at approaching $90bn, would be the most ambitious leveraged buy-out of all time.
Mr Nardelli was one of the most sought-after executives in the US when he joined Home Depot from General Electric in December 2000. By the end of 2006, though, he was a poster boy for executive greed.
Investor anger over his pay and deferred compensation, which totalled $256m over six years, boiled over at the group's annual shareholder meeting last May, which was attended by no board members apart from Mr Nardelli. At least 30 per cent of shareholders withheld support for the re-election of 10 of the 11 directors, including Mr Nardelli. As recently as September, the board was defending its pay policies.
"He has been there six years and the company has not returned even a T-bill rate to shareholders," said Ralph Whitworth, head of Relational Investors, a Home Depot shareholder. "He has taken out $1m every three days with no return."
Democrat politicians said the severance package confirmed the need to control executive pay. Barney Frank, incoming chairman of the House of Representatives financial services committee, said Mr Nardelli's contribution to raising Home Depot's value appeared to consist of quitting - and receiving hundreds of millions of dollars for doing so.
Home Depot said Mr Nardelli's decision to resign was "by mutual agreement". A statement by the board said: "Under Bob's tenure, the company made significant and necessary investments that greatly improved the company's infrastructure and operations, expanded our markets to include wholesale distribution and new geographies, and undertook key strategic initiatives to strengthen the company's foundation for the future."
Frank Blake has been promoted to chief executive, and Carol Tome, the company's chief financial officer, will assume responsibility for mergers and acquisitions, although UK analysts expressed scepticism that she would reopen the possibility of a takeover of Kingfisher.
Over there and overpaid
The former chairman of the New York Stock Exchange was forced out when the board saw his annual pay had hit $187.5m (£96m) without it fully realising. A court has ordered that he return the bulk of it.
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