Home Depot ( HD) CEO Bob Nardelli finally got an offer he couldn't refuse.

Ending months of tumult at the Atlanta-based home-improvement retailer, Home Depot's board generously handed Nardelli $210 million Wednesday to pack his bags. Wall Street applauded, sending shares up 4% in midday trading.

The move comes less than a month after a big shareholder, riled by Nardelli's hefty pay and the stock's long stupor, threatened to start a proxy fight if Home Depot's board didn't agree to review its strategy and corporate governance. The company agreed to a meeting but pledged to stay its charted course.

Countless other rumors have been swirling about the company, which has been hit hard by the rise of rival Lowe's ( LOW). One had private equity players circling Home Depot for a possible $100 billion leveraged buyout. The company said no deal is in the works.

Now, after six years of well-paid mediocrity, Nardelli is leaving. The problem for shareholders is that he isn't taking his wealthy patrons on the company's board with him.

Home Depot says the golden parachute includes both cash and stock and is consistent with the terms of a "pre-existing employment contract entered into in 2000." Still, some observers say the whole deal smells rotten.

"It's disturbing, but given this board it doesn't surprise me," says Charles Elson, the chair of the University of Delaware's corporate governance program. "It's contractual. The question is why would they ever get into an agreement that they would have to pay him this?"

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