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January 03, 2007

Paid Leave: Bob Nardelli Gets Fired and $210 Million

posted by MR WAVETHEORY at 1/03/2007 05:55:00 AM
Bob Nardelli started the New Year with a bang: a $210 million bang. The board of The Home Depot, Inc. (NYSE HD) had to pay him $210 million to usher him out. He was criticized for having an exorbitant pay package during his tenure and his exit package is even more egregrious considering the performance of HD vs Lowe's Companies, Inc. (NYSE LOW) since he joined HD as CEO in December 2000. Lowe's is up 218% since December. Home Depot is up a measly 7%. (press release)

You have to love the game! Ironic that Forbes wrote in the January 8, 2006 issue on newstands, "The housing bust is worse than people expected. But Bob Nardelli has a plan for survival." Not so. If you read the article, you should have read the last two sentences, "Will the housing sector survive this recession? Parts of it will." Meanwhile, Nardelli has bailed. Timed like a pro.

Update: Bob Nardelli leaving seems to support the idea that the housing slump is continuing. It serves as a conflicting data point to the conclusion drawn by Halstead and Brown Harris Stevens that real estate prices continue to firm up in New York. The strength of New York real estate could be regional - and partially explained by the private equity and the hedge fund boom.

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