Surprise, Speculation Surround Home Depot CEO's Resignation
Word of The Home Depot CEO Bob Nardelli's resignation spread as fast as fiber-optic lines could carry it Jan. 3, and almost as quickly speculation surrounding his sudden departure filled news Web sites and message boards. Most shocking of all seemed to be the size of Nardelli's compensation package—roughly $210 million, including a $20 million severance, an acceleration of unvested deferred stock, payment of previously earned and vested deferred shares, and other considerations.
In its official announcement, the home improvement retailer called the decision “mutual” and praised the “significant and necessary investments” during Nardelli's tenure that “greatly improved the company's infrastructure and operations, expanded our markets to include wholesale distribution and new geographies, and undertook key strategic initiatives to strengthen the company's foundation for the future.”
But the media wasted no time pointing out Nardelli's missteps, namely disheartened investors and regulatory probes that recently overshadowed the big profits Home Depot posted under his six-year tenure. As PROSALES contributing editor John Caulfield noted to the New York Post, Nardelli's greatest legacy to The Home Depot may be a management staff full of retail rookies. “It's a bunch of GE guys who don't know anything about retailing,” Caulfield said. Indeed, according to Business Week, “since 2001, 98% of Home Depot's top 170 executives are new to their positions, 56% of the changes involved bringing new managers in from outside the company.” That latter number includes Steve LeClair, who joined HD in 2005 —from GE, of course—and on Oct. 24 became head of HD Supply's lumber and building materials division. HD Supply overall chief Joe DeAngelo has just one more year of HD experience (plus some time at Stanley Works).
The company's board of directors elected current vice chairman and executive vice president Frank Blake, a four-year company veteran, to succeed Nardelli as chairman and CEO. The board also appointed DeAngelo to a newly created position of COO. The announcement said DeAngelo will continue to oversee HD Supply, but did not indicate how and if the additional responsibilities will affect HD Supply's efforts to capture larger shares of pro contractor business.
Raleigh, N.C.–based Stock Building Supply, which operates 322 locations, announced Dec. 20 it has acquired framing services provider Tonto Verde Construction and its four-acre lumberyard, Precision Forest Products. The Tonto Verde acquisition marks Stock's entrance into the Phoenix market. Tonto Verde had 2005 sales of $37 million and brings 172 employees into Stock's operations.
Roseburg, Ore.–based lumber, panel, and EWP manufacturer Roseburg Forest Products Co. took ownership of seven former Georgia-Pacific mills, located in Mississippi, South Carolina, and Georgia, on Dec. 1, a move that expands Roseburg's operations into the Southeast, the company said. ...Federal Way, Wash.–based forest products provider Weyerhaeuser announced in December it has closed veneer technologies manufacturing operations in Springfield and Coburg, Ore., a decision the company said was driven by shrinking demand for plywood panels due to the decline in housing starts. In addition, the company has indefinitely curtailed its East Kentucky Trus Joist TJI production line, citing falling demand for engineered wood products. The company also announced it will revamp lumber operations in Washington state by closing its Green Mountain sawmill in Toutle in 2008 and opening a new, more efficient mill at the company's lumber finishing operation in Longview.
Scherer Bros. Lumber, based in Minneapolis, has elected Rachael Scherer as its board chair. A third-generation family member, Scherer is vice president of emerging technologies marketing for Medtronic. ...Mooresville, N.C.–based Lowe's promoted 37-year company veteran Larry D. Stone to president and COO in December.