Amid Criticism, Home Depot Directors Re-elected

Chicago, IL, June 2--Shareholders of Home Depot Inc. on Friday reelected all of the retailer's directors, but some had urged votes against co-founder Kenneth Langone because of concerns about board independence. Stockholders of the largest U.S. home improvement chain approved all director candidates with a favorable vote of at least 80 percent, Home Depot said during its annual meeting in Chicago. The company said it does not disclose vote counts for individual directors. In April, the National Association of Securities Dealers accused Langone's New York investment bank, Invemed Associates LLC, of illegally charging high commissions in return for access to hot stock offerings. Some shareholders at the meeting opposed the election of Langone, who is not an executive of Home Depot, and asked for more information about the NASD matter. "Mr. Langone is not an independent director," said Evelyn Davis, who holds stock in many U.S. companies and has been a vocal critic on corporate governance issues for decades. Home Depot directors, who are elected for one-year terms, also include Richard Grasso, head of the New York Stock Exchange. Grasso has faced criticism for his presence on boards of companies regulated by the NYSE, and some people have called for him to resign from Home Depot. Langone, who also sits on a committee the New York Stock Exchange, has set up to review its corporate governance issues, was instrumental in hiring Home Depot Chief Executive Robert Nardelli in late 2000. Nardelli defended his board, saying Grasso gave Home Depot a first-hand interpretation of NYSE corporate governance rules, and Langone should not be considered a company insider because he had never held a management position. "I see no conflict, I see no issue with having Dick Grasso and Ken Langone and the other members we currently have on our board," Nardelli told reporters after the meeting. Home Depot, whose stock price fell more than 50 percent last year amid strong competition from smaller rival Lowe's, moved its annual meeting to Chicago this year from its headquarters city of Atlanta for the first time. Nardelli said the retailer plans to rotate its annual meeting to cities where it has large investor bases. But a strong first quarter helped defuse shareholder anger over the company's 2002 performance, and many investors applauded as Nardelli noted a 31.4 percent rise in the stock price so far this year. Still, some shareholders objected to Nardelli's generous pay package. The CEO's 2002 salary climbed to $1.87 million from $1.53 million the year before, but his bonus was trimmed to $4 million from $5 million. A proposal seeking a shareholder vote for any poison pill -- a defensive tactic designed to ward off unsolicited takeovers -- passed with 65 percent in favor. Home Depot also said on Friday that it approved a plan to buy back up to $500 million of its stock.