Home Depot Director Reelected

Home Depot Inc. shareholders reelected Kenneth Langone as the retailer’s lead outside director Thursday, three days after the former head of the New York Stock Exchange’s compensation committee was sued for giving an outsize pay package to Richard Grasso.

Langone, Home Depot’s co-founder, was reelected with at least 77% of the vote at the company’s annual meeting in Dallas. Some investors including the California Public Employees’ Retirement System opposed Langone, citing a possible conflict of interest because his investing-banking firm had been hired by Home Depot as recently as 2001.

New York Atty. Gen. Eliot Spitzer on Monday sued to recoup more than $100 million from Grasso, charging that the former exchange chief executive and Langone had manipulated the NYSE’s board to win Grasso’s $139.5-million pay package. Langone, 68, and Grasso, who was ousted in September, said in separate statements that they did nothing wrong.

Grasso served on Home Depot’s board from 2002 until Thursday’s meeting.

“I’m very proud of this board,” Home Depot Chief Executive Robert Nardelli told shareholders. “Home Depot takes corporate governance very seriously.”

All other directors were reelected to the board, which now has 10 members.

Langone, chief executive of Invemed Associates Inc., was the only exchange director named in the lawsuit. In his statement, Langone said the NYSE board made “honest, diligent and sound compensation decisions.” He declined to comment after the meeting.

Shares of Atlanta-based Home Depot, the world’s No. 1 home-improvement retailer, rose 38 cents to $35.84 on the New York Stock Exchange.

Nardelli was recruited to Home Depot in December 2000 from General Electric Co. by Langone, who also serves on the General Electric board.

“Ken Langone is a totally independent director,” Nardelli told reporters after the meeting. “He is a very large investor. He brings a tremendous amount of passion to his work as a director.”

Shareholders approved two resolutions opposed by Home Depot’s board. A resolution calling on Home Depot to put any shareholder-rights plan, known as a “poison pill,” to a shareholder vote was approved by 66% of investors. Such plans can make it more difficult for a suitor to acquire a public company.

A resolution calling for shareholder votes on executive severance pay agreements was approved by 55%.

Sidney Kay, a Home Depot shareholder, prompted applause at the meeting when he said severance agreements and other executive compensation amounted to “legal financial thievery.”

Nardelli told reporters that the board would carefully review the two resolutions.