Relational Gets Board Seat at The Home Depot

Date: Thursday, February 8, 2007
Author: HFN Daily Report

The Home Depot announced Monday it has entered into an agreement with Relational Investors to appoint one of the fund's principals to the company's board.

David Batchelder will join the board on Feb. 22 and will be appointed to the compensation and audit committees. In return, the long-only fund has agreed to support the rest of the company's board slate for the next three years. Should Batchelder be unavailable in the future, the company will nominate another individual of Relational's choosing.

Francis Blake, chairman and chief executive officer, signed the deal with Batchelder and fellow Relational principal Ralph Whitworth. The agreement brings an end to the proxy battle Relational began in December.

The fund was an outspoken critic of The Home Depot's former CEO, Robert Nardelli, who left the company while wearing a $210 million golden parachute. Blake is slated to make less than a quarter of what Nardelli made when he ran the company. Nardelli saw The Home Depot's market share and stock price gradually decline over his six-year tenure.

San Diego-based Relational prides itself on taking the long-term view on its investments. The fund has not shied away from activism in the past, and waged a long war to oust Sovereign Bank head Jay Sidhu, who resigned in October. Sidhu left with $13 million in severance.

Relational has about $7.5 billion in assets under management. The fund currently owns approximately 26.5 million shares of The Home Depot.