For Immediate Release
Thursday, June 29, 2006
Shareholders to Home Depot Board: What Are You Trying To Hide?
WASHINGTON —A no-show by Home Depot's board of directors at the company's annual meeting on May 25 has prompted company shareholders to ask a simple question: What are you trying to hide?
The American Federation of State County and Municipal Employees (AFSCME) Pension Plan sent a "demand letter" this week to Home Depot seeking to make public all books, records and internal documents related to the board's decision not to attend the meeting. Chairman and CEO Robert Nardelli's exorbitant pay package — including the backdating of stock options — was to be a major focus of the annual shareholder meeting in Wilmington, Del.
Chairman Nardelli was the lone director among Home Depot's 11-member board to attend the meeting. Shareholders were strictly limited in the length of their questions and spoke against the backdrop of a giant ticking clock. Mr. Nardelli did not provide answers to a single substantive question and adjourned the meeting in less than an hour.
"The board of directors at Home Depot abdicated their responsibility and in doing so, they ducked a basic accountability obligation to company shareholders. The real question is what are they trying to hide?" said Chairman of the AFSCME Pension Plan Gerald W. McEntee.
The demand letter is an option open to shareholders under Delaware's general corporation law. Inspection of Home Depot's records will allow shareholders to make informed decisions when voting on future shareholder proposals and director elections. The records, once disclosed, will also allow shareholders to properly investigate Board members' compliance with their fiduciary duties to Home Depot and its shareholders.
"Robert Nardelli has pocketed more than $150 million over the past five years despite Home Depot's languishing stock value," McEntee said. "Shareholders are the true owners of Home Depot and deserve to know the truth."
"Was the no-show a deliberate effort to avoid discussion of Home Depot's excessive executive compensation? Was it to shield Chairman Nardelli's abusive use of stock options from scrutiny? Whatever it was, Home Depot must come clean with its board minutes and other records so we can understand who should be held accountable."
AFSCME is the largest union for workers in the public service with 1.4 million members nationwide. The union's members have their retirement assets invested by public pension systems with combined assets totaling more than $1 trillion. President McEntee chairs the AFSCME Employees Pension Plan, which—as an institutional investor and active owner—engages public companies on shareholder issues like restraining executive pay.
