Skip to main content

A couple of weeks ago, on May 25th in Wilmington, Delaware, Home Depot held its annual shareholders meeting.  What happened there has been described by observers as "cowardly", "disgusting", "disgraceful" and "contemptous".  It was all of those things.  But it is also extremely telling as to how so many of our major corporations have become organizations that serve no one well, and how they can be taken back and made responsible.

The situation at the annual meeting was set for controversy, as Home Depot's CEO, Robert L. Nardelli, has become the latest poster child for runaway executive pay.  Mr. Nardelli has been awarded compensation by the Home Depot board of $245 million in the five years he has been CEO of the company, including $37.1 million last year alone.  Over those five years, the stock of Home Depot has fallen by 12%, while the stock of its closest competitor, Lowe's, has risen 173%.  Stockholders, who own the company Mr. Nardelli is getting so richly compensated for ill-serving, were set to withhold votes from the directors who Mr. Nardelli has asked them to approve for the board at the annual meeting.

What happened next was a circus.  Only one of the eleven directors of the company showed up, Mr. Nardelli.  In fact, no chairs were even set up for the other directors.  Mr. Nardelli permitted one question per person, with one minute each to speak (time was kept on a large digital clock).  Questions such as what steps will the board take to address conflicts of interest were given terse, single sentence responses (the answer to that particular question was "This is not the forum in which to address these comments.").  Shareholders who did not stop speaking when their time expired were approached by men described by Joe Nocera of the New York Times as "big, strong men, some wearing Home Depot aprons, who look as if they could be bouncers at a rowdy club."  The vote tallies for the stockholder issues were kept secret.  The entire meeting lasted less than an hour.

Why does this story matter?  What makes it more than another story of how CEOs and corporate directors consider themselves above any responsibility, be it to their country, their employees, or their shareholders (who ostensibly own the company)?  After all, Home Depot has already made concessions, vowing to "return to our traditional format for next year's annual shareholders meeting, which will include a business overview, the presentation of proposals, an opportunity for shareholder questions and with the board of directors in attendance."

We sometimes forget that in a free and democratic society, the notions of freedom and democracy are not only our covenant with our government, but with one another.  What meaning does capitalism have if contracts are unenforcable against the powerful, other than as an excuse for the inequitable distribution of wealth?

The formative idea of the publicly-held corporation is that of voluntary democracy; for the price of a share, you can purchase your stake in a company, to share in the profits and the decision-making that directs the enterprise.  Yet today, we have seen the disappearance of that democracy.  But this is changing.

A movement has begun among investors to retake their role in the choosing of the boards of directors.  Proposals to require the election of directors by a minimum of a majority of shareholders have been raised at 140 companies this year.  More than half of the shareholders voted for these proposals at Bank of America, International Paper, and Verizon.  Right now, the SEC is considering whether or not to allow shareholders in CA, the software company once known as Computer Associates, to hold a vote on two long-term members of the board, over the strong objections of CA.  A special committee of the New York Stock Exchange has recommended that the NYSE abolish a 70 year old rule allowing brokerage firms to vote shares in director elections if their clients do not give them instructions.

Who are the people most robbed by the corporate scandals and mismanagement we have observed in the past decade?  Who loses most when the Enrons and Global Crossings give out hundreds of millions in compensation to incompetent and criminal executives?

The shareholders.  The employees with shares in their 401(k) funds.  The unions with their members' pensions invested in the market.  The parents saving for their childrens' education.

What happened at the Home Depot shareholders' meeting affects us all that way.  The fight to take back companies from their executives to their owners is the most effective means at our disposal to restore both fiscal sanity to our corporations, and to restore power to the people who have paid for their share in it.  This is a fight worth paying attention to.

Originally posted to Jay Elias on Wed Jun 14, 2006 at 04:00 PM PDT.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

jd in nyc, Bob Johnson, Kimberley, Frederick, opus, Mary, AP, davidb1224, xerico, Alumbrados, paradox, Ed in Montana, Angie in WA State, AustinSF, hoipolloi, TheC, Joe Bob, Alfred E Newman, DeminNewJ, Go Vegetarian, KeithH, Terri, tmo, SteveLCo, coral, Ducktape, northsylvania, pb, SWicklund, Nathan in MD, Sean Robertson, Upper West, Irfo, elizsan, Inky, CrazyDem, marmoset, TealVeal, fouro, skyesNYC, Ben P, Rayne, Brent, georgiacmt, ks, Bendygirl, laurak, MrHinkyDink, Hornito, Geenius at Wrok, Kimberly Stone, Delaware Dem, Nina Katarina, Pandora, joeltpatterson, sen bob, Unstable Isotope, sarac, ScientistMom in NY, wytcld, Maryscott OConnor, thesill, bosdcla14, sphealey, Robespierrette, walter mitty, ortcutt, B Rubble, Stoy, Hummingbird, Shockwave, Heather in SFBay, LynChi, Wintermute, billlaurelMD, Hesiod, bramish, byoungbl, meg, democat, Jay C, VetGrl, rhubarb, Lufah, GayHillbilly, Ed Tracey, tryptamine, saluda, MakeChessNotWar, LesIsMore, Rat, Sandy on Signal, rlamoureux, elfling, TarheelDem, Mumon, frisco, ilona, Carnacki, Newsie8200, musicsleuth, bumblebums, exNYinTX, BaconGreaseKid, Poika, Jerome a Paris, linc, doorguy, zeitshabba, Cecrops Tangaroa, PKinTexas, memberofthejury, Paulie200, sardonyx, Soy Lechithin, kissfan, RubDMC, bara, agoldnyc, km4, fabacube, calipygian, smintheus, bronte17, worriedmom, conchita, Athenian, macdust, guyute16, Big Time Patriot, annrose, AikidoPilgrim, nyceve, jem6x, Ti Jean, mayandjay, RabidNation, Rupert, snoopydog, joe pittsburgh, wanderindiana, PBnJ, Glic, sukeyna, Proud SW FL Lib, buckhorn okie, cookiebear, mrblifil, chimpy, roses, khloemi, Colman, javelina, Tejas Geek, L0kI, Molee, stepzeb, House, sagra, dcvote, luddite, PeteZerria, frightwig, Nate Roberts, thingamabob, fumie, Cedwyn, antirove, high uintas, CocoaLove, HeyThereItsEric, LawStudent, Janet Strange, Braindead, hhex65, AlphaGeek, Barbara Morrill, Moody Loner, sockpuppet, jlynne, Miss Jones, missliberties, pat bunny, Chicago Lulu, BmoreMD, johnfire, gmb, Rageaholic, TXsharon, praedor, jsquared, Zem, Hawksana, Caldonia, Fernando Poo, NYFM, kathika, flatford39, Black Maned Pensator, joan reports, johnnygunn, Catte Nappe, Mrcia, mrsnart, Cliff Talus, FLDemJax, horsewithnoname, Liberaljentaps, DH from MD, Green Tea, Dood Abides, kismet, walkshills, One bite at a time, bwintx, Matt Esler, Noisy Democrat, AllisonInSeattle, peterj911, mattes, gmhowell, WisVoter, Man Eegee, Elwood Dowd, CanYouBeAngryAndStillDream, Wife of Bath, Mosquito Pilot, jcrit, HK, DrewDown, kd texan, vacantlook, Schwede, bluemajority, The Gryffin, snowbird42, Flann, thereisnospoon, rickroks, FlawedAI, vansterdam, Shapeshifter, TexH, sawgrass727, Gowrie Gal, sxwarren, weelzup, rapala, sharkbite, John3, frostyinPA, nehark, madaprn, Fabian, Recovering Southern Baptist, historys mysteries, DCleviathan, Bluesee, Tinfoil Hat, pattyp, kingubu, denise b, bellevie, Tami B, bargie23, fartofliving, coloradobl, LarisaW, essexgreen, Heiuan, OpherGopher, PBen, corvo, annettenajjar, saucy monkey, Melody Townsel, panicbean, clammyc, Northstar, beans, stitchmd, Yellow Dog Dem Woman, juliesie, snacksandpop, dynamicstand, stagemom, Ranting Roland, klk, Back in the Cave, boofdah, eru, Mz Kleen, lennysfo, GUGA, ocooper, dansk47, AnnArborBlue, Morrigan, SaraBeth, truebeliever, Green1010, OregonCoast, RB in Pgh, jorndorff, The American Prophet, dunderhead, GreyHawk, science geek, jmonch, rpm5250, SheriffBart, libbie, RickE, fivefouranonymous, DblTrbl4Me, Savvy813, el zilcho, ikrisarus, fotyc, Thursday Next, Shotput8, wiscmass, FindingMyVoice, sodalis, Riff, willers, dsteffen, Cory Bantic, mightymouse, danger durden, Pacific NW Mark, RainyDay, soyinkafan, bently, Hazardman, CJnyc, Jim P, lgmcp, itsadryheat, CCSDem, SSMir, axman, taracar, makeitstop, Audio Guy, AceDeuceLady, pmc1970, occams hatchet, andreuccio, keefer55, Sanuk, nyarlahotep, Thundergod, PoppyRocks, neworleanslady, Do Tell, kraant, highfive, ama, vigilant meerkat, Activist Girl, BlueInARedState, redcardphreek, 4thepeople, cazimi, G Red, HoundDog, Ellicatt, Gorette, natsirt, Chincoteague, Samwoman, buhdydharma, KenBee, compbear, UntimelyRippd, teeb, katier, Babaloo63, bluebrain, Esjaydee, dangangry, xopherma, luckydog, Gasonfires, sailmaker, greenearth, quinque, Joshua Lyman, goodasgold, jlove1982, NBBooks, TalkieToaster, MJ via Chicago, jguzman17, global citizen, StrayCat, zorba, Lashe, nonnie9999, The Hindsight Times, gatorcog, aldpol, VegasLiberalStevo, paul2port, condoleaser, Data Pimp, KbThorn In Massachusetts, armadillo, MO Blue, Preston S, Wbythebay, justCal, MarciaJ720, max stirner, ThePenIsMightier, ER Doc, Unitary Moonbat, engine17, vox humana, Mysticdog, deathsinger, breakingranks, va dare, thewhiterabbit, means are the ends, WarrenS, MarketTrustee, Dreaming of Better Days, Carbide Bit, kurt, BoojumSte, chapel hill guy, guachi, donlong, libertyisliberal, matx, Progressive420, coolsub, lemonsieur, Palmetto Progressive, Garden Liberally, Joelarama, eastmt, Trixter, McSnatherson, moehardy, elRanchero, Lummoxia, Balam, drawnonward, Haningchadus14, Jared Bernstein, Cat Whisperer, oklacoma dem, PhantomFly, Kujo AAR

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site