Home Depot Inc.'s chief executive did little Thursday to quell the uproar among some shareholders over his hefty pay, stifling debate at the company’s annual meeting as the board members who approved the compensation didn’t show up to defend themselves.
Despite the criticism and some institutional shareholders withholding votes, the company’s directors were all reelected. Shareholder proposals seeking to allow investors to have a say on the CEO’s pay and to restrict retirement benefits for senior executives were rejected.
The only shareholder proposal to pass was one changing the voting structure for the election of directors.
Besides CEO Bob Nardelli, who is also chairman, none of the other directors of the Atlanta-based company attended the meeting in Wilmington, Del. Home Depot said in a statement that many of the directors were handling business at company headquarters.
Nardelli did not allow shareholders to ask general questions and ended the meeting, which was broadcast on the Internet, after 30 minutes. He also did not respond directly to those investors who were allowed to address him about the proposals.
“This is not the forum in which we would address your comment,” Nardelli told one shareholder representative, who asked him what he would do to make board members more independent. “We certainly receive your comment.”
Another shareholder representative asked him about his pay, to which Nardelli responded, “This is about the election of directors, not about compensation. We’ll move on at this point.”
After just a few people spoke on the proposals, Nardelli announced the voting results, adjourned the meeting and headed for the airport. A spokesman said Nardelli would not be granting interviews.
Shareholders were upset because Nardelli has received $123.7 million in compensation, excluding certain stock option grants, since taking over as CEO in December 2000, according to proxy statements. That pay has come even though the company’s stock price has dropped 9% since then, adjusted for splits.
The option grants, if they were to be exercised, would add tens of millions of dollars to Nardelli’s compensation.
Shares of rival Lowe’s Cos. have increased 185%, on a split-adjusted basis, in the same period Nardelli has been Home Depot’s CEO.
Outside the hotel where the Home Depot meeting was held, half a dozen representatives of the American Federation of State, County and Municipal Employees rallied in support of the union’s proposal to allow Home Depot shareholders to vote on executive compensation.
The demonstrators, one dressed in a chicken costume and wearing a Home Depot apron, urged shareholders not to be chicken and to vote for the proposal put forth by the union’s pension and benefit plan.