Sunday, November 30, 2008

Managing Into The Ground: Robert Nardelli

It's been a rough couple of years for Robert Nardelli, though you wouldn't know it from the compensation he has brought home. First as CEO of Home Depot, now as CEO of Chrysler, he can't seem to do anything right except negotiate pay packages.

Nardelli took the reigns at Home Depot (HD) in the year 2000 after losing a power struggle for the top job at GE to Jeffrey Immelt. A great boom in housing would ensue in the next several years, but Home Depot's stock had essentially remained flat for his entire tenure all the way to 2007! When confronted by angry shareholders at the 2006 annual shareholder meeting, Nardelli limited each shareholder to one minute, and refused to answer many of their questions. Meanwhile, competitor Lowe's (LOW) saw its stock triple during Nardelli's seven years at HD. Nardelli, however, received a $210 million parachute when he left.

A few months later, Nardelli accepted the top job at Chrysler. A year and a half later, he's back in the spotlight! Here he is asking Congress for taxpayer funds to help his company out:

Is Nardelli a bad manager that runns companies into the ground, or simply a victim of circumstance? It's impossible for us to tell from the outside. Operationally, Home Depot has looked great (as we've discussed here) but its stock never really responded. However, his stock results in both of these companies certainly haven't made him look good at all.

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