ATLANTA - The Home Depot Inc. is paying new Chief Executive Frank Blake a fraction of what it paid his predecessor, Bob Nardelli, and has taken the unusual step of promising Blake no severance package if he leaves.
But executive compensation experts don't expect the decision announced Wednesday by the world's largest home improvement store chain to be a trend in corporate America, despite the ire hefty salaries have drawn among investors.
''I wish it were a trend,'' said Lowell Peterson, a New York labor attorney who is familiar with executive compensation issues. ''I suspect it's unique to Home Depot because the pay and severance package given to Nardelli was so out of line.''
Atlanta-based Home Depot said in a regulatory filing that Blake could earn as much as $8.9 million in total compensation this year.
That's a fraction of the $25.7 million a year on average that Nardelli was earning at Home Depot, excluding stock options.
Nardelli resigned earlier this month after six years at the helm of Home Depot amid a furor over his hefty pay and Home Depot's lagging stock price. He was replaced by Blake, who was Home Depot's vice
Nardelli left with a severance package worth about $210 million. Home Depot said Wednesday that Blake's compensation arrangement does not provide for payment of severance upon termination.
There are examples in recent years of other major companies reducing the amount they pay their top official.
General Electric Co. granted Chief Executive Jeffrey Immelt $3.4 million in total annual compensation in 2005, far less than the $16.25 million his predecessor, Jack Welch, earned in 2001, the year Immelt replaced Welch. Immelt earned about $8.5 million in total annual compensation at GE in 2004 and $7.6 million in 2003, according to regulatory filings.