A culture and compensation shift is taking place at Home Depot. An excerpt from the Business Week article:
In what could mark the first major step toward reversing oversize executive payouts, Home Depot set new CEO Frank Blake's base salary at $975,000 and his bonus target at 200%, or $1.95 million. Of the target bonus, 70% is based on achievement of financial goals and 30% on achievement of individual performance measures, the company said in a filing with the Securities & Exchange Commission.
Blake's pay package stands in sharp contrast to ousted CEO Nardelli's $2.25 million base salary and $7 million cash bonus in 2005, none of it tied to performance. Most dramatic is that Blake's deal has no provisions for severance pay, compared to the $210 million retirement package with which Nardelli decamped. "It's fair to say that Nardelli's pay package, among others, was the high-water mark of CEO pay excess," says Nell Minow, editor and co-founder of governance adviser the Corporate Library. "The pendulum is swinging very drastically now." (See BusinessWeek.com, 1/4/07, "Out at Home Depot.")