One
more CEO makes an unceremonious exit. This time it is the turn of Home Depot's
CEO, Robert L Nardelli to get sacked by the world's largest home-improvement retailing
major's board, under pressure from angry shareholders. In the process, however,
Nardelli joins the list of celebrity bosses who after earning iconic status suddenly
fall from grace. Bruce Karatz of drug maker Bristol-Myers Squibb resigned amid
a scandal over backdated options, William McGuire (scandal over backdated options)
of United Health, W James, Harry Stonecipher (Defense department leasing controversy
and a sex scandal) of Boeing, and Jacob `Kobi' Alexander (stock options backdating
scandal) of Comverse Technology are among those CEOs who were ousted as shareholders
became resentful about their gargantuan pay and manipulation of stock options.
Steve Jobs, the charismatic leader of Apple Computer was involved in a media storm
recently over allegations about improper dating of stock options, though the company
board exonerated him later. "To account for the backdating, Apple restated
its financial reporting back to 2002 and took an $84 mn charge", reported
NY Times. However, the US-based newspaper added that the report by Apple
Board's Special Committee, probing into the allegation, failed to give a clean
chit to the company as a result of the backdating of options and improper record
keeping, especially concerning two large option grants made to Jobs in 2000 and
2001. In fact, as Fortune points out, the number of US companies under
investigation for possible options backdating has climbed from just a handful
sometime back, to 50 during the last count now.
While
Nardelli left the company, he took with him a hefty severance pay package of $210
mn, which did not go well with shareholders whose impatience with him only grew.
Nevertheless, Nardelli's disgraceful exit reignites the debate over CEO's exorbitant
pay packages and about golden parachutes. |
