Nardelli

CHICAGO, Illinois (Reuters):

Home Depot Inc. chairman and Chief Executive Robert Nardelli has left the retailer in a mutual decision with the board of directors, the company said on Wednesday, sending its shares up more than 3.0 per cent in premarket trading.

Nardelli, who came under fire last year for a pay package some investors said was not in line with Home Depot's performance since he arrived in late 2000, will receive a severance package valued at about US$210 million, the company said.

Nardelli was succeeded by Vice-Chairman Frank Blake, the company said. Nardelli's resignation and Blake's appointment were effective Tuesday, according to the company.

Nardelli leaves as Home Depot faces a regulatory probe over its options pricing practices and increased investor scrutiny amid falling earnings as a cooling housing market has hit demand at the retailer.

Last month, Home Depot said it found almost 20 years of options backdating, resulting in US$200 million in unrecorded expenses. The retailer's independent review of the options practices concluded that there was no intentional wrongdoing by any person who was a member of the management team or board when the review was released in December.

Nardelli incurred the wrath of some investors for declining to take questions or review the company's performance at its 2006 annual meeting, which was also notable for the absence of its board of directors.

"When you're highly compensated and you don't ring the cash register for shareholders, you're at risk," said Richard Steinberg, president of Steinberg Global Asset Management in Boca Raton, Florida, which owns Home Depot shares.

At the time of that board meeting in May, Nardelli had earned at least $119.2 million during his tenure, excluding options and some other compensation, while the company's stock price had dropped 15 per cent.

Home Depot shares are up about 4.0 per cent since early June and have rallied recently on speculation the company could be a target for a private equity buyout.

Its shares were at US$41.46 on Wednesday in premarket electronic trading, up from Friday's close of US$40.16 on the New York Stock Exchange.