I'm not upset by the $210 million golden parachute Robert Nardelli just received as a send-off from Home Depot. Not at all. To those critics who see it as one more step in the slide from free-market capitalism to wholesale looting, I say: What do you really know about Nardelli's circumstances? Maybe he has a dozen high-maintenance ex-trophy wives to support, each with a brood of special-needs offspring. Ever think of what that would cost?
Or he may have a rare disease that can be held at bay only by daily infusions of minced fresh gorilla liver. Just try purchasing a gorilla a day for purposes of personal consumption, or any endangered species for that matter. There are the poachers to pay, the smugglers, the doctors and vets. I'm just saying: Don't start envisioning offshore bank accounts and 50,000 square foot fourth homes until you know the whole story.
Another reason I'm not troubled by the $210 million payoff is that the Home Depot board may see it as a kind of tip for its fired CEO, and like me, they may see no reason to link tips to performance. I don't tip as a reward for good service; I tip because it's part of the tipped person's living. Waitstaff, for example, earn about $2 or $3 an hour - a bit more now in certain states - so a tip is just my contribution to their wage. Sloppy waitress? Surly cabdriver? I'm not their damn supervisor-- they get their 20-25 percent anyway.
So what if Home Depot's stock fell from $50 to $41 on Nardelli's watch? Maybe the board should be commended for their generous tipping policies. Possibly they're trying to send a message to us stingy 20 percent-ers: that 300 percent (based on Nardelli's $64 million earnings over his six year tenure) is more like it.
Or it could be that Home Depot has a more profound philosophical message to impart. The board may have decided to flout the very principle of capitalist exchange: that what you get paid should in some way reflect the work that you've done--or the "value added," as they say in the business. If that seems unlikely, consider that Pfizer has just rewarded its own failed CEO with an exit package of - and this can't be coincidental --$200 million.
Picture the board members sitting cross-legged on the floor in a circle, munching S'mores and giggling about how cleverly they've undermined the basis of our capitalist economy. Home Depot sales clerks get about $8-10 an hour for lifting heavy objects and running around the floor all day; the CEO gets a total of almost $300 million for sinking the stock. We're not talking about a rational system of rewards - just random acts of kindness, vast sums of money alighting when and where they will, generally in the outstretched hands of those who already have far too much.
Now, could anyone in this store please tell me where to find the little doohickeys that hold up shelves? Oh well, I guess you have to scrap a lot of sales associates to come up with a decent CEO tip these days.