Wednesday, January 03, 2007

Home Depot (HD) CEO departure pay - UNREAL!

For all of you who follow Home Depot (NYSE:HD), and the saga surrounding their ridiculously overcompensated CEO that enjoyed substantial personal wealth since starting his job in December of 2000 (even though the stock has actually gone down 7% since then according to CNBC this morning), today's news is just more of the same excess and out of control compensation practices by corporations today.

Keep in mind, this guy is under fire for the fact that he has been raking in a small fortune during his tenure, even though the average stockholder has made nothing.

A quote from a Forbes article on the Home Depot CEO's departure today should give you even more to become sickened by:
"Nardelli has also been under fire by investors for his hefty pay and is leaving with a severance package valued at about $210 million. He became CEO in December 2000."
This is nothing short of obscene! You have got to love it... Nardelli is leaving for being under fire for his hefty pay package, and to leave he gets severance worth $210 MILLION!!! UNREAL! These corporate boards are out of control, and this practice of awarding each other for everything, including for failing, underperforming, departing, you name it... exemplifies the arrogance among the super-compensated upper .01% of the population that will screw the average investor over at any chance they get!

Why can't the Home Depot board of directors just say "you are fired Nardelli... go to the unemployment line like everyone else"?!!? Oh, because that would mean someone may tell them (the board members and other upper-crust management and overpaid cronies) the same thing at a future date instead of securing them a similarly excessive, exoribitant, and obscene pay package for themselves!

It just sickens me that these mega-compensated "elite" of the corporate world can not simply be removed, without further pay or severance packages (certainly without packages that make the average person's expected severance package look like a pittance). For god sakes, they have been rewarded greatly (most likely excessively) for their time at the helm, and already make hundreds, if not thousands, of times what the average worker makes. But yet, they "deserve" these mega-compensation packages to get the boot, retire, or what have you! Why?! We, the average person, need to save the money that we earn from our wages in order to plan for retirement, and yet the ones who make extreme and absurd levels of compensation are not even expected to have to put away funds from their bloated wage-packages, since they are nearly assured of receiving a huge "golden parachute" on departure.

This must change!! There is ZERO incentive for these guys at the top to succeed anymore, since win or fail, they are guaranteed compensation packages that dwarf anything the average person can ever dream of making. In fact, their positions are like winning the lottery now - where, with a single term in a mega-compensated position, an executive can effectively stop working after a few years and live large on their winnings (oh, I mean, "pay"). But, even better, another company always seems to want to hire these same people again and reward them with hoards of cash just for their "experience" and such. I have heard so many times how there is just a lack of available talent for these upper-crust jobs -- give me a break!

So, to get back to the Home Depot (HD) stock story today... what I find amazing is how the stock instantly moves upward in trading today on the news of Nardelli's departure. I guess the average investor does not even care about the fact that this insane compensation practice is obviously deeply entrenched at the boardroom-level of the company, and that regardless of who takes over next, the same old buddy-system of rewarding even mediocrity will still exist. I'm sure the next guy at the top will get his chunk of the pie just like his predecessor, while the stockholders hold out hopes of being thrown a few scraps in the form of some higher earnings (earnings that seem predestined to be first awarded to the top executives who feel their "risk" is much higher than that of the average stockholders or something) - earnings which can't flow to the bottom line so long as they are flowing into the pockets of top-level management. Prove me wrong Home Depot execs... prove me wrong!

1 comment:

DED said...

I completely agree with you. CEO compensation has been out of control for years. But the only people who can reel this in are stockholders.