Henry A. McKinnell, the former CEO of drug maker Pfizer Inc. who was ousted in part because of investor anger about his rich retirement benefits, will get a package totaling more than $180 million.
Nardelli's $210-million deal tops both of those, but is far from a record. For example, former Exxon Mobil Corp. CEO Lee Raymond's retirement package was valued at $400 million when he stepped down last year.
A substantial amount of Nardelli's severance pay was included in the employment agreement that he secured before joining Home Depot. The company promised him at least $4.5 million in annual salary and bonus, plus at least 450,000 stock options each year.
In addition, the company loaned Nardelli $10 million when it hired him and forgave $2 million of that loan each year.
To woo him from GE, Home Depot also gave Nardelli an initial option grant of 3.5 million shares, which would have been worth $285 million if the company's stock price had appreciated at 10% a year. And it promised a pension equal to 50% of his pay and bonus.
Rep. Barney Frank (D-Mass.), incoming chairman of the House Financial Services Committee, called the severance package "further confirmation of the need to deal with a pattern of CEO pay that appears to be out of control."
Some analysts noted, however, that much of Home Depot's poor stock market performance occurred during the first two years of Nardelli's reign, when he was struggling to turn the company around.
Over the last four years, Home Depot's stock price rose more than 67%, beating the 61% turned in during that period by the benchmark Standard & Poor's 500 index of big U.S. firms.
In addition, the company's annual sales doubled to $81.5 billion during his tenure, and profit nearly doubled as well.
Home Depot has struggled as the housing market slowed -- its stock fell almost 1% last year -- but so has its well-regarded competitor Lowe's Cos.
"I think there was some unfair criticism" of Nardelli, said Stephanie Hoff, an analyst at brokerage firm Edward Jones & Co.
That said, Wall Street seemed pleased that Nardelli was being replaced as chairman and CEO by Frank Blake, who had been vice chairman. Home Depot's stock rose more than 2% Wednesday, adding 91 cents to $41.07.
Richard Ferlauto, director of pension and benefits policy at the American Federation of State, County and Municipal Employees, said the resignation took the heat off Nardelli but not the Home Depot board.
"It's Round One," Ferlauto said. "We are not sure who won. We are happy that he's gone, but it's the board that we hold responsible."
kathy.kristof@latimes.com
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Cash depot
Highlights of former Home Depot CEO Bob Nardelli's $210-million severance package:
* $20 million in cash
* Stock-based compensation valued at $128 million
* Retirement benefits valued at $32 million
* Lifetime health and life insurance valued at $18 million
* $9 million in owed but unpaid compensation
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Source: Home Depot
