Risk & Compliance

Union Seeks to Further Humble Home Depot

The AFSCME pension plan is seeking to make public all books, records, and internal documents that bear on the board's decision not to appear at las...
Stephen TaubJune 29, 2006

Some shareholders are still upset about last month’s Home Depot annual meeting, at which chairman and chief executive officer Robert Nardelli was the only board member in attendance.

Earlier this week the pension plan of the American Federation of State County and Municipal Employees sent a “demand letter” to the company — an option available to shareholders of companies incorporated in Delaware, the union elaborated.

According to AFSCME, it seeks to make public all books, records, and internal documents that bear on the board’s decision not to appear. In a press release, the union maintained that inspection of Home Depot’s records will allow investors to make informed decisions when voting on shareholder proposals and electing directors. “The records, once disclosed, will also allow shareholders to properly investigate board members’ compliance with their fiduciary duties,” added the release.

AFSCME also noted that Nardelli’s “exorbitant pay package,” including the backdating of stock options, was to be a major focus of the meeting. What’s more, according to the union, shareholders who attended the meeting had strict limits on the length of their questions — they reportedly spoke against the backdrop of a giant ticking clock — and Nardelli did not provide answers “to a single substantive question” before adjourning the meeting in less than an hour.

“The board of directors at Home Depot abdicated their responsibility and in doing so, they ducked a basic accountability obligation to company shareholders. The real question is, what are they trying to hide?” said Gerald McEntee, chairman of the AFSCME pension plan.

Apparently stung by widespread criticism, the week after the meeting Home Depot announced that next year it would “return to its previous format.” The company’s 2007 annual meeting, according to a statement by Nardelli, will include “an opportunity for shareholder questions and with the board of directors in attendance.”