Home Depot to Wall St.: Where's the love?
Jun. 19th, 2006 09:58 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
thatcrazycajunDespite stellar sales performance and record profits, The Home Depot, Inc., the world's largest hardware store chain, still gets no respect from analysts or investors, and its stock price continues its downward slide. What's the prob? Here's a big, fat hint: Look at CEO Bob Nardelli's outsize pay. Nardelli's compensation package is reported as extraordinarily generous even for more beloved CEOs: over $35 million for 2005 alone, and over $245M over the five years since he inherited the reins from founders Bernie Marcus and Arthur Blank.
Investors, skeptical that Nardelli deserves such a big paycheck, gave him an earful at last month's annual shareholders meeting, which made headlines for the absence of most of Depot's board of directors and Nardelli's stone-faced refusal to answer shareholders' questions or respond to their comments (see earlier entry below). Seems to me the Street might look more favorably on Big Orange if it plowed more of those gigundo profits back into the company -- beefing up Depot's notoriously hard-to-find floor sales staff, say, or expanding into new markets and spiffing up its product line -- and less into its arrogant boss' bank account.
The difference between CEOs' pay and that of their rank-and-file workers at U.S. companies in general is wider than it has ever been today, and the Bobster is fast becoming the poster child for such corporate profligacy and unfairness. If Depot wants to avoid losing its top-of-the-heap spot to fast-gaining chief competitor Lowe's Companies, it better wise up and rethink its fiduciary priorities PDQ.
Investors, skeptical that Nardelli deserves such a big paycheck, gave him an earful at last month's annual shareholders meeting, which made headlines for the absence of most of Depot's board of directors and Nardelli's stone-faced refusal to answer shareholders' questions or respond to their comments (see earlier entry below). Seems to me the Street might look more favorably on Big Orange if it plowed more of those gigundo profits back into the company -- beefing up Depot's notoriously hard-to-find floor sales staff, say, or expanding into new markets and spiffing up its product line -- and less into its arrogant boss' bank account.
The difference between CEOs' pay and that of their rank-and-file workers at U.S. companies in general is wider than it has ever been today, and the Bobster is fast becoming the poster child for such corporate profligacy and unfairness. If Depot wants to avoid losing its top-of-the-heap spot to fast-gaining chief competitor Lowe's Companies, it better wise up and rethink its fiduciary priorities PDQ.
