Compensation at Home Depot

ASSIGNMENT 4

The Home Depot

The Corporate Rundown

Donald Coffman, BBA/JD

Jack Welch Management Institute

531 Financial Management II

Professor Alfred Sanders

11 June 2015

Executive Summary:

Home Depot is the leader in the Home Improvement market in the United States, number two in Canada and number one in Mexico.   When it comes to Executive Compensation, Home Depot has had its ups and downs.   The Nardelli era brought focus to Executive Compensation because Nardelli’s package was so out of line and had a 210,000,000 golden parachute attached that he was eventually asked by the Board to step down in 2007.   Frank Blake took over and compensation at the executive level underwent massive changes.  

The Home Depot:

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The Home Depot was established in 1979 by Bernie Marcus and Arthur Blank. The due led Home Depot until 2000 when they stepped down and Robert Nardelli was brought in as the new CEO.  

On January 2, 2007, the Home Depot and Robert Nardelli mutually agreed on Nardelli's resignation as CEO after a six-year tenure. Nardelli resigned amid complaints over his heavy-handed management and whether his pay package of $123.7 million, excluding stock option grants, over the past 5 years was excessive considering the stock's poor performance versus its competitor Lowe's. His severance package of $210 million has been criticized because when the stock went down his pay went up.

His successor, Frank Blake, previously served as the company's vice chairman of the board and executive vice president. Blake agreed to a much more conservative compensation package than Nardelli that is very heavily dependent upon the success of the company. Although a longtime deputy to Nardelli at GE and Home Depot, Blake was said to lack Nardelli's hard edge and instead preferred to make decisions by consensus. Indeed, Blake repudiated many of his predecessor's strategies, and it has been reported that the two men have not spoken since Nardelli departed Home Depot. (Gogoi)

The Home Depot: Analysis

The Board :

The Board comprises 11 people.   They are all from various parts of the country and independent.  

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Committees:  

The Home Depot Board has 4 committees that meet numerous times throughout the year.  

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Home Depot after the Nardelli era became very concerned about perceptions among rank and file associates around the United States, Canada and Mexico.  And the perception in Atlanta home to corporate headquarters the reputation was sullied in the community and in the corporate world.  

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