Raymond Micaletti

CEOs Must Bring Investors Along for the Ride (WSJ)

One note about Bob Nardelli: He actually didn't run Home Depot into the ground. Under his watch earnings increased dramatically (going from $1.11 the quarter before he became CEO to $2.63 in the quarter when he left, a 15% CAGR). The problem was that when he became CEO, Home Depot's stock was egregiously overvalued and over time it naturally drifted down to a more reasonable valuation despite the fact that earnings were increasing. Thus, shareholders of HD, if they bought the top during the Internet bubble, should really be upset with themselves for buying an overvalued stock, not with Bob Nardelli.