Updated from 12:23 p.m. EDT
shareholders re-elected the company's board at a meeting Thursday in Dallas, retaining a slate that includes company founder Kenneth Langone, the former
New York Stock Exchange
director who was sued along with Richard Grasso last week.
The 10-member board was backed by about 77% of the votes cast, the company told the gathering. More specific information wasn't immediately available.
Langone was among the biggest supporters of Grasso, who ultimately resigned from the exchange amid a firestorm over his lucrative pay package. The Home Depot lead director headed the compensation committee when Grasso's pay was approved. Both were charged in a suit brought this week by New York Attorney General Eliot Spitzer alleging a breach of state laws governing not-for-profit entities.
regarding the lawsuit, Langone said: "Mr. Spitzer's case is built on little more than his own political opportunism. I won't settle this case, and I'm taking the stand because I know decisions the board made were based on the most expert judgment and the most thorough analysis. And I'm going to prove it."
Langone resigned from the NYSE board in late 2003.
Last year, the AFL-CIO called for Langone to be banished from every board in the country for his unapologetic defense of the fallen NYSE chairman. The California Public Employees Retirement System also said it would withhold votes for him at the meeting. Still, criticism of his board performance at Home Depot is far from unanimous.
"It would be tragedy for Home Depot not to have Langone on the board of directors," said Eric Bosshard, an analyst at FTN Midwest Research. "Of any company that I cover, that I see, he's probably the most valuable board member I've observed in action."
Langone "is viewed as one of the founders
of Home Depot, it would be very unlikely that they would ever get rid of him as a director," said another buy-side analyst who preferred not to be named.
Langone, who has been with Home Depot for 25 years, is so actively involved in the company, said Bosshard, that he gives his phone number out to store associates when he visits stores and asks them to call with problems. Further, though Home Depot requires its board directors to visit at least five stores each year, Bosshard said. Langone generally visits 50.
"The company would be meaningfully worse off," Bosshard said. "I can't tell you how strongly I feel that he is an important part." (FTN Midwest Research does not do investment banking and Bosshard holds no shares of Home Depot.)
In addition, the investigation of Grasso and Langone should not be confused with Langone's service to Home Depot, said Bosshard. "It is nonsensical to allow that other issue, which is unfortunate, to tarnish his image and commitment at Home Depot."