updated 5/25/2006 3:24:52 PM ET 2006-05-25T19:24:52

The Home Depot Inc.’s chief executive did little Thursday to quell the uproar among some shareholders over his hefty pay, stifling debate at the company’s annual meeting as the board members who approved the compensation didn’t show up to defend themselves.

Despite the criticism and some institutional shareholders withholding votes, the company’s directors were all re-elected. Shareholder proposals seeking to allow investors to have a say on the CEO’s pay and to restrict retirement benefits for senior executives were rejected.

The only shareholder proposal to pass was one changing the voting structure for the election of directors.

Besides CEO Bob Nardelli, who is board chairman, none of the other directors of the Atlanta-based company attended the meeting in Wilmington, Del. Home Depot said in a statement that many of the directors were handling business at the company headquarters.

Nardelli did not allow shareholders to ask general questions, ending the meeting, which was broadcast on the Internet, after a mere 30 minutes. He also did not respond directly to any of those investors who were allowed to address him about the proposals.

“This is not the forum in which we would address your comment,” Nardelli told one shareholder representative who asked him what he would do to make board members more independent. “We certainly receive your comment.”

Another shareholder representative asked him about his pay, to which Nardelli responded, “This is about the election of directors, not about compensation. We’ll move on at this point.”

After just a few people spoke on the proposals, Nardelli announced the voting results, adjourned the meeting and headed for the airport. A spokesman said Nardelli would not be granting any interviews with reporters.

Shareholders were upset because Nardelli has received $123.7 million in compensation, excluding certain stock option grants, since taking over as CEO in December 2000, according to proxy statements. The handsome pay has come even though the company’s stock price has dropped 10 percent over that period on a split-adjusted basis.

The option grants, if they were to be exercised, would add tens of millions of dollars to Nardelli’s compensation.

Shares of rival Lowe’s Companies Inc. has increased 185 percent, on a split-adjusted basis, over the same period Nardelli has been Home Depot’s CEO.

In the last fiscal year, Nardelli earned $29.7 million, or $37.9 million including the value of stock options granted to him. By comparison, Lowe’s CEO Robert Niblock earned $7.8 million in the same period, excluding options granted. The company’s proxy for the last fiscal year does not say how much Niblock’s options were worth at the time they were granted, only what they would be worth based on a certain rate of return.

Also Thursday, Lowe’s, which is based in Mooresville, N.C., held its annual meeting. It re-elected four directors as Niblock said the company remains confident in its outlook for 2006. Lowe’s shareholders also approved several proposals, including one that amended the company’s articles of incorporation to set the minimum number of directors at three and another that changed the voting standard from plurality to a majority of votes cast. Shareholders rejected a shareholder proposal to require a separate annual report addressing progress toward implementation of the company’s wood policy.

Meanwhile, outside the hotel where the Home Depot meeting was held, a half-dozen representatives of the American Federation of State, County and Municipal Employees rallied in support of an AFSCME shareholder proposal to allow Home Depot shareholders to vote on executive compensation.

The demonstrators, one dressed in a chicken costume and wearing an orange Home Depot apron, urged shareholders not to be “chicken,” and to vote for the proposal put forth by AFSCME’s pension and benefit plan, which holds more than 23,000 Home Depot shares.

“Hey, Nardelli! Your stock price turned to jelly!” chanted the demonstrators, who carried signs describing him as an “OPCEO,” or overpaid CEO.

Richard Ferlauto, director of pension and benefit policy for AFSCME, said a similar proposal on executive compensation received more than 40 percent of the vote at last month’s meeting of U.S. Bancorp shareholders, and will be presented to Sun Microsystems shareholders later this year.

“This concept has got a lot of legs with shareholders,” said Ferlauto.

While AFSCME representatives targeted Nardelli’s pay, four animal rights activists waged their own protest outside the meeting, decrying the decision by “Harm Depot” to resume sales last year of glue traps for household pests. The group People for the Ethical Treatment of Animals contends that mice and other animals caught in the traps can suffer for days before succumbing to starvation, dehydration, self-mutilation and shock.

In its statement, Home Depot said the directors not showing up for the meeting does not mean shareholders don’t have opportunities to address them.

“In our experience, shareholders are more likely to communicate with directors through e-mail and standard mail, and can find these addresses in our proxy,” the company said.

Home Depot, the nation’s largest home improvement store chain, operates 2,051 stores in the United States, Canada and Mexico. It also has announced plans to expand to China, but has repeatedly refused to say how many stores it will open there or when it will open its first one.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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