by James Parks, Apr 12, 2006

Home Depot’s slogan is: “You can do it. We can help.”

Meanwhile, Home Depot CEO Robert Nardelli seems to operate under the slogan: “I can do it. You’re on your own.”

With the cooperation of the Home Depot board, Nardelli is guaranteed to receive one of the largest CEO pensions around, no matter how well he does his job.

But his nonunion employees, who can be fired for cause, only are offered a cutely named “FutureBuilder” 401(k) plan as well as an Employee Stock Purchase Plan to build their retirement nest egg. These plans do not provide a guaranteed annual pension benefit.

When Nardelli, 57, was hired at the nation’s largest home-improvement retailer, he was guaranteed a pension equal to 50 percent of his salary and bonus at age 62. Even if Nardelli’s performance does not entitle him to a bonus, his pension benefit will be calculated as if he had earned a $4.5 million bonus.

Altogether, Nardelli’s annual pension package is worth $3.875 million, placing him in the top five pension plans, according to the newly released AFL-CIO Executive PayWatch. Other notable features of Nardelli’s golden parachute include $20 million in cash, immediate vesting of stock options and restricted stock and forgiveness of a $10 million loan.

And what has Nardelli done to earn such a well-funded retirement? You decide.

The day he was picked for the CEO job in 2000, Home Depot’s stock price was $39. As of April 11, 2006, the price had risen slightly to $40.95. That’s a 5 percent increase in six years, a period when the New York Stock Exchange average increases have shot through the roof.

Maybe Nardelli learned how to guarantee his retirement security by watching two people with whom he has worked closely in the past: Jack Welch and Richard Grasso.

Nardelli headed General Electric Corp.’s (GE’s) power division from 1995–2000. When he was passed over to succeed Welch as GE’s CEO, he jumped to Home Depot.

Welch, who was famous for sending jobs offshore to save labor costs—and bragging about it—took away such a lavish retirement package that the U.S. Securities and Exchange Commission (SEC) fined GE for hiding the details of the package from investors. Welch voluntarily gave up some of the retirement perks, which included an $11 million New York City penthouse apartment and use of corporate jets.

Grasso was forced to resign as chairman of the New York Stock Exchange in 2003 amid a public outcry that developed on Capitol Hill and in the financial markets when his secret $188 million salary was revealed as part of an SEC corporate governance reform. From 202 to 2003, he sat on the Home Depot board, which would have approved any increases in Nardelli’s salary.

Nardelli, coincidentally, sits on the board of Coca-Cola, which has been accused of major labor law violations in several countries.     

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