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And he's taking his money with him.

Vice Chairman Frank Blake, 57, will replace Nardelli, effective immediately, Home Depot said in a statement today. Nardelli, 58, will receive $210 million in severance payments, the company said.

Home Depot has lost market share to Lowe's Cos. during Nardelli's six-year tenure, its shares have declined 7.9 percent and the company is headed for its smallest annual gain in profit in at least nine years.

"Ultimately the board felt the negativity associated with Nardelli was an impediment to his and the company's success," said Daniel Popowics, an analyst with Fifth Third Asset Management. "This is a surprise. I thought Nardelli carved out some time for himself to turn things around." The Cincinnati firm manages $21 billion, including Home Depot stock.

Nardelli, who joined Home Depot from General Electric, became a lightning rod for critics of excessive executive pay. Nardelli was the only board member to appear at the company's annual meeting last year, where the size of his pay package was questioned.

In the press release, the company stated exactly what Nardelli is going to get.

Nardelli and the Company have agreed in principle to the terms of a separation agreement which would provide for payment of the amounts he is entitled to receive under his pre-existing employment contract entered into in 2000. Under this agreement, Nardelli will receive consideration currently valued at approximately $210 million (including amounts which have previously been earned or vested). This consideration will include a cash severance payment of $20 million, the acceleration of unvested deferred stock awards currently valued at approximately $77 million and unvested options with an intrinsic value of approximately $7 million, the payment of earned bonuses and long-term incentive awards of approximately $9 million, the payment of account balances under the Company's 401(k) plan and other benefit programs currently valued at approximately $2 million, the payment of previously earned and vested deferred shares with an approximate value of $44 million, the payment of the present value of retirement benefits currently valued at approximately $32 million and the payment of $18 million for other entitlements under his contract which will be paid over a four year period and will be forfeited if he does not honor his contractual obligations.

Posted by edelfenbein at January 3, 2007 10:03 AM