Relational Investors, which owns $1 billion of Home Depot stock, or 1.2 percent of shares outstanding, is calling for an independent committee to investigate the company’s management and overall corporate strategy. Home Depot's CEO Robert Nardelli and the company's board have been under heavy criticism for excessive executive compensation which has yielded only poor stock performance. Mr. Nardelli has received $240 million in salary, bonuses, stock grants and company loans since he became CEO in 2000. During Nardelli's tenure, Home Depot’s shares have increased by about 3%. Home Depot's rival Lowe’s Companies, have increased by 177 percent. Analysts report that the company is working on raising the stock price, including a $3 billion dollar share buyback.
• Sources: NY Times, WSJ, Boston Globe
• Related commentary: Don't Scapegoat Bob Nardelli for Home Depot's Stagnant Stock, Private Equity Gone Wild: Home Depot In Play?, Home Depot's Dividend Increase: Not What Bob Nardelli Wants You To Believe Conference call transcripts: The Home Depot F3Q06 (Qtr End 10/29/06)
• Potentially impacted stocks and ETFs: Home Depot (HD) Competitors: Target (TGT), Lowe's (LOW), Best Buy (BBY) ETFs: Retail HOLDRS (RTH), Vanguard Consumer Discretionary VIPERs (VCR), Vanguard Dividend Appreciation VIPERs (VIG)
Seeking Alpha's news summaries are combined into a pre-market briefing called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only a few seconds to sign up.