Home Depot Gives Seat To Critical Investor
David H. Batchelder, principal and co-founder of Relational Investors LLC, San Diego, an investment fund that was a leading critic of former Home Depot chief Robert Nardelli’s efforts to diversify the retail giant by buying wholesale companies, such as Hughes Supply. Batchelder’s business colleague, Ralph Whitworth said the company should be improving its retail stores instead.
Relational Investors owns about 1.3 percent of Home Depot’s shares. Last December, the fund told Home Depot it planned to launch a proxy battle for at least one board seat.
Nardelli was forced out last January. Home Depot’s new chief executive, Frank Blake, says the company will remain in the supply business, but he’s pledged to make reinvigorating Home Depot’s sluggish retail stores the company’s main priority. For its part, Relational Investors dropped the proxy and agreed to also withdraw the resolution for Home Depot to establish an independent committee to reassess its business strategy and management.
Home Depot will nominate and support Batchelder or another Relational Investors recommendation to the board for each of the next three years as long as the investment continues to a significant stake in the company. Relational Investors will also support each slate of directors nominated by the Home Depot board.