Greed unleashed

Every time you think the greed of corporate managers has reached its limits, yet another record is set. The reigning king of unprincipled pay packets must surely now be Robert Nardelli, recently chairman and CEO of Home Depot. Nardelli walked away (pushed, some say) with a $210-million platinum parachute after heading the company for only six years, nicely topping off the $245-million he received during his reign as top dog. That's almost half a billion American bucks for six years work.

Much of Nardelli's compensation came in the form of stock options. The point of stock options of course is that if the CEO increases share value, he rewards the shareholders, and they in turn, via the options, reward him. Nardelli did not, however, reward the shareholders (apparently both they and Home Depot employees despised him). During his six-year tenure, a period that saw the biggest home improvement boom in U.S. history, share price fell by eight per cent. (Stock in the company's main rival, Lowe's, rose by 218 per cent in the same period.)

You might well ask how he managed to make so much money off options if the share price was falling. Good question. Part of the answer may lie in Home Depot's admission it has been back-dating options for decades, part of yet another scandal sweeping through American boardrooms.

Home Depot shareholder have, however, recently received some good news. Following Nardelli's departure, their stock rose 2.3 per cent.