It’s hard to feel any sympathy for Bob Nardelli, the
ex-CEO of Home Depot. He was pushed out last week with a whopping $210 million
pay-off and another $64 million in compensation collected over the last six
years. Investors are steaming mad because the company’s current share price is
lower now
than when Nardelli took the job in late 2000. Frankly, it’s absurd
that he should be allowed to make this much money without being held
accountable on this critical financial metric. Actually, it’s just kind of
absurd that this board let him earn this type of compensation -- period.
But this isn’t the reason Bob Nardelli is no longer the
CEO of Home Depot. In fact, Nardelli actually succeeded in meeting other key
financial milestones, such as boosting sales and profits and leading one of the
few Dow 30 companies to achieve over 20 percent earnings-per-share growth each
year for the last four. And in many ways he out performed many peers in this
area and clearly did no worse then Jeff Immelt, the highly respected CEO of GE,
when comparing share price growth over the same period. But there is no angry
mob calling for Jeff Immelt’s head.
Quite simply, Nardelli failed to grasp that his pay was
plainly out of line and his abrasive “my way or the highway” style was
completely inappropriate for dealing with key public audiences in this day and
age. No polished business leader would ever treat investors the way that
Nardelli did in the last share holder meeting. And a CEO with a greater
understanding of the importance of public relations might have accepted a
scaling back of his overall compensation package. That’s because the savvy ones
understand that although image isn’t everything, well, it sure is important.
Yawn. Really going out on a limb here Ed. Keep 'em coming!
Posted by: Your blog makes me sleepy | January 08, 2007 at 03:17 PM