The Home Depot signed a peace deal late Monday with Relational Investors, its largest and most boisterous shareholder, which had been threatening a showdown at the retailer’s annual meeting.
David H. Batchelder, a principal of Relational Investors, will join Home Depot’s board of directors on February 22; he will also be appointed to the leadership development and compensation committee and to the audit committee. A director of Washington Group International and ConAgra Foods, Batchelder has served on seven other public-company boards during his 25-year career.
In return, the investor group agreed to drop its proxy contest, through which it had sought to form an independent committee to evaluate strategy and to elect nominees of Relational to the Home Depot board.
“We are very pleased to have reached this understanding, which will give The Home Depot the benefit of Relational’s strategic business advice without a costly and distracting proxy solicitation,” said Ralph Whitworth, a principal of Relational Investors, and Frank Blake, chairman and chief executive officer of The Home Depot, in a joint statement.
Under the pact, Relational agreed to support each slate of directors nominated by the board. The investor group also agreed not to support or participate in any “withhold” vote or similar campaign, not to nominate any candidates for election to the board, and not to submit proxy resolutions or conduct proxy solicitations.
In addition, four directors have agreed to leave the board in 2008: Kenneth G. Langone, Milledge A. Hart III, John L. Clendenin, and Claudio X. Gonzalez. The departing directors, who will have reached Home Depot’s retirement age, all were involved in the hiring of former CEO Robert Nardelli. The retailer agreed that its board will consult with shareholders when it seeks to fill those director positions.