he severance package of $210 million paid to Robert Nardelli on his resignation as head of US retailer Home Depot last month brought renewed calls for greater controls to be placed on executive compensation.
Particularly galling was the fact that Nardelli’s handsome payout bore no relation to his performance during his tenure as the company’s chief executive. Home Depot’s share price has barely moved since his appointment as head of the Atlanta-based retailer in 2000, while the company has lost market share to its main rival, Lowe’s.
The new board has voted to tighten rules governing the company’s executive remuneration policies. Proposed pay deals will now have to win approval from two-thirds of non-executive directors, not half as was formerly the case. But whether controls of this sort can help cut fat-cat pay, given the pressure directors feel to attract top talent for executive management roles, remains to be seen.
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