Home Depot - Potential Good News

Today, Bob Nardelli, their CEO, got fired.
Maybe the new guy can turn the place around
blog link to more info about Bob ( or " it's all about Bob" )
http://sethgodin.typepad.com/seths_blog/2007/01/do_you_want_to_.html
btw looks like he gets a $210,000,000 severance package
he's a master of double talk
http://www.directorship.com/publications/0906_nardelli.aspx
he could have been a politician with is ability to talk & not answer questions but obviously he made the correct financial decision
OTOH with his $210 million he could buy himself a governorship somewhere
cheers Bob
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BobK207 wrote:

Unfortunately, the Iraqis just hanged him.
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BobK207 wrote:

They found a video of him once helping a customer, back when he was a young man.
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BobK207 wrote:

I just came back from HD an hour ago. I wondered why every employee smiled and asked if they could help. :-)
--
Bill
in Hamptonburgh, NY
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Sure, but tomorrow it will be back to the same old same old.
"Come meet the new boss, same as the old boss."
-Pete Townsend
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John Reddy wrote:

They pretty much have to. The only way big box stores can pay for all of the overhead and big salaries of upper management is to spin how good their stores are and have poorly paid "associates".
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While I'm not a stockholder (Wish that I was years ago) in Home Depot I think the shameful thing about all this is although he was "Fired" he left with $210,000,000.00 for what? FAILURE? Something is wrong when CEO's and Executive level people have Golden Parachutes that guarantees a fortune for failure to perform, just as Nordelli did. If it were a store manager whose store failed to excel or meet sales expectations or some department manager the only thing they would leave with or get for being fired would be uncertainty about their families future and a bad job reference to carry with them.
To me that's the story. I'm glad for the Stockholders whose stock will most likely go up due to his leaving, if but for a short while, but $210 Million for failing to do your job?
On 1/3/07 4:30 PM, in article snipped-for-privacy@i12g2000cwa.googlegroups.com, "BobK207"

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Poor Guy!!! I hope he can live on 210 million!!!
Gary KW4Z wrote:

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Gary KW4Z wrote:

I agree. The problem at Home Depot wasn't just the CEO it was, and is, the BOD.
Matt
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Gary KW4Z wrote:

Shit! I'm willing to fail to do my job for a mere $100 million. Mention my name to the board, will ya?
--
Mortimer Schnerd, RN
mschnerdatcarolina.rr.com
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"Mortimer Schnerd, RN" <mschnerdatcarolina.rr.com> wrote in message

I was going to be a pitcher for the RedSox but it only paid $5 million a year and I'd have to work, not just get fired. I'd rather get fired.
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I got into a situation a few years ago where I was told to do things the manager's way or else. I chose the "or else" but it didn't include $210 million to go away. I'm obviously in the wrong line of work.
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Ouch!
The Atlanta Journal publishes in Home Depot's hometown.
I'm a 7 year HD associate and today was the best day I've had in years. You shoulda heard the cheers!
Nardelli benefits grossly from appalling standard http://www.ajc.com/opinion/content/opinion/bookman/stories/2007/01/03/0104edbookman.html
Published on: 01/04/07
Bob Nardelli was, by almost any measure, a failure in his job.
As chairman and chief executive officer, Nardelli led Atlanta-based Home Depot for six years, and during that time the company's stock price declined almost 8 percent. In that same time frame, the stock market as a whole rose almost 17 percent, and the stock price of the company's prime competitor, Lowe's, soared, as did its market share.
Nardelli's real failure runs still deeper, though, in ways less easily measured. Home Depot's once sterling reputation - among customers, shareholders and employees - also plummeted under his leadership, a critical failing for a retail company whose dominance in the home-improvement sector was once built on customer service.
So on Wednesday, Nardelli paid the price for his failure, just as football coaches and others do, with the company announcing his resignation. And as part of the deal arranged for his departure, Nardelli will take with him a package of benefits totaling $210 million.
That buyout, combined with his previous compensation, means that for his six years of failed leadership at Home Depot, Nardelli will have reaped several hundred million dollars from company shareholders.
Ladies and gentlemen, that's obscene.
Typically, criticism of soaring executive pay is dismissed as mere envy or class warfare. Successful people - the producers in society - ought to be rewarded, the theory goes. If CEO pay is now several hundred times that of the average worker, well, market forces must be allowed to play out, and the only ones who complain are the losers.
Well, not only the losers. Warren Buffett, the head of Berkshire Hathaway and by most accounts the world's savviest investor, has also been highly critical of runaway CEO pay. In his company's 2005 annual report, he discussed the problem in terms that seem to describe Nardelli perfectly.
"Too often, executive compensation in the U.S. is ridiculously out of line with performance," Buffett wrote. "That won't change, moreover, because the deck is stacked against investors when it comes to CEOs' pay. The upshot is that a mediocre-or-worse CEO ... all too often receives gobs of money from an ill-designed compensation arrangement."
In Nardelli's case, there was no accountability built into the system, only guaranteed "gobs of money," to borrow Buffett's description. If Nardelli succeeded at Home Depot, he was going to be a very rich man, which is fair enough. But if he failed, he was also going to be a very rich man, and there's the rub.
Adam Smith, the 18th century Scottish philosopher, is revered as the founder of capitalist theory; among many other ideas, he contributed the concept of market forces operating as an invisible hand, guiding the economy with far more wisdom than government or anyone else could ever manage.
However, Smith was not naive about the ways in which the "invisible hand" could be manipulated and thwarted by those with the power to do so. And he was particularly harsh about the impact of guilds, the associations of tradesmen and artisans who joined together to insulate themselves from competition and basically set the price for their labor and skills artificially high.
That's in essence what corporate executives have become in this country, an informal but highly effective guild. As Buffett and others point out, it is a closed system in which CEOs, retired CEOs and future CEOs sit on boards of directors and compensation committees, setting each other's pay with no incentive whatsoever to keep that pay within bounds of decency or justice.
In fact, for a CEO or other board member to actually object to another CEO's pay package, Buffett once wrote, "would be like belching at the dinner table." Members of the guild just don't do that to fellow guild members.
As the Home Depot case demonstrates, there is no economic explanation for such ludicrous arrangements, only greed allowed to play itself out with no force to countervail against it. Smith, writing more than 200 years ago in his classic "Wealth of Nations," explained it all quite well when he wrote: "All for ourselves and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind."
Jay Bookman is the deputy editorial page editor. His column appears Thursdays and Mondays.
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Gary KW4Z wrote:

$210 million for leaving? Well, it's none of my business. If the board want to pay him that much, and the board was elected by the stockholders, it's their decision. If something like that so offends a person's sensibilities, he's welcome to start a competing company with different policies.
To pay someone $210 million to leave may be a better deal than allowing them to stay. This technique is common in divorces.
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If you own stock and vote on directors then you know that you don't get to "elect" them. You get to "approve" them after the company tells you the very short list of candidates.
Sadly, it's a very rigged game. Boards long ago stopped putting the stockholders' interests first.
Thing that hacks me off is I finally unloaded the last of my HD stock a month ago since it was clear the company wasn't going anywhere under Nardelli and it's up 4 bucks since then.
Steve.
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Could you imagine if the government would lift the cap of SS tax for people who get paid this much? He would end up paying 6.3m in SS tax on the departing money instead of paying on the first 125,000 only. No wonder SS is going broke. Lou
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And the republicans say that unemployment is not a problem.
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BobK207 wrote:

Maybe I missed something here but what has been so bad about Home Depot?
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