Nardelli Exit Package

Once again we have a mediocre CEO leaving a company and enjoying an obscene severance package.  Nardelli was paid $64 a year for six years and did poorly with his company when he should have done well, the market in home improvement was booming while Home Depot languished.  On exit he receives another $210 million (another $34 million per year on the job).  It is another "Holy Cow, did we vote for that??" moment for the Home Depot outside directors.  The outside director who headed the board's compensation committee had multiple other jobs.  The insiders, Langone et al., and their counsel, Marty Lipton, know the game and have played it before (both teamed up to get Grasso $140 million severance package from the NYSE).  What did the outside directors understand of the deal?  Of course, just as in the NYSE and Disney cases, the outside directors will publicly note that they knew what they were doing.  As I have noted in my discussion of the Disney case, the compensation committee should be able to show in its minutes a table of projected payments based on potential future terminations for the claim of approval with knowledgeable to be credible.  Somewhere in the minutes of the compensation committee, on the date Nardelli's salary package was approved, should have been a calculation of Nardelli exit payments based on a termination in say, five years.