Home Depot Not Fixed

Taking Nardelli's place at the company's helm is one those directors, Vice Chairman and Executive Vice President Frank Blake. Meanwhile, the company said its board voted to waive the retirement age of 72 for its directors, clearing the way for three of them -- John Clendenin, Claudio Gonzales and Milledge Hart -- to stand for re-election at this year's shareholder meeting.

"This action was taken to retain these directors' experience, and deep knowledge of the company's business and key personnel to help ensure a smooth management transition," said Home Depot in a statement. "This action is temporary and effective for one year."

It's unclear whether the change will affect the tenure of investment banker and Home Depot director Kenneth Langone, who is over 70 and has been widely blamed for pushing through a huge pay package for former New York Stock Exchange (NYX Quote) Chairman Dick Grasso. The company couldn't be reached for further comment.

In addition to his compensation, Nardelli was criticized for being unresponsive to shareholder concerns expressed at Home Depot's investor meeting in June, where none of the board members were present. Ultimately, the company apologized for the way the meeting was conducted, but it defended its track record by pointing to its fundamental performance.

While its shares declined over the previous five years, Home Depot nearly doubled its sales to $81.5 billion from $47.5 billion. During that time, its annual earnings climbed from $1.10 a share to $2.72 a share in 2005. It returned nearly $13 billion, or approximately 59% of its cumulative earnings, to shareholders in the form of dividends and share repurchases.