On Thursday, National Legal and Policy Center presented a proposal at The Home Depot, Inc.’s annual shareholder meeting that would require the board to implement a policy to require the chair of the board of directors to be an independent member from the CEO.
The meeting came just as the company reported that first quarter revenue dropped 4.2 percent compared to the same quarter last year.
The company’s board of directors opposed our proposal, as explained on pages 32-33 in its proxy statement.
Speaking as sponsor of the resolution was Paul Chesser, director of NLPC’s Corporate Integrity Project. His three-minute remarks, which you can listen to here, follow:
Last year when we presented our independent chair proposal for Home Depot, I more-or-less predicted that even though the Chairman and CEO roles were held by two different executives at the time, that it wouldn’t be long before the positions were again consolidated.
Ted Decker/PHOTO: The Home Depot
Sure enough, here we are in May 2023, and Mr. [Ted] Decker has quickly assumed both roles.
Last year I also presented a series of questions that Home Depot should ask itself, and I called upon the Board and executive leadership to reconsider its emphasis on the ESG agenda.
This was in light of the damage done to the Disney brand over political battles in Florida.
It was also in the context of skyrocketing energy prices wrought by the radical climate change agenda.
Regretfully it does not appear my warnings were heeded, as Home Depot appears to have doubled-down on ESG priorities rather than shifted away from it, despite a public backlash against it that has only increased since last year.
Consider again the example of Disney, which is perhaps the one U.S. company most identified with left-leaning Corporate America.
In 2022 Disney suffered the worst year in terms of financial performance in 50 years.
That’s what woke agenda politics will do to a company.
And now this year we have also seen what has happened to Anheuser-Busch, in the wake of the Bud Light/Dylan Mulvaney fiasco.
Sales across all the company’s brands are significantly down, and its competitors are taking advantage.
Yes, the backlash against woke is real.
Another issue area where Home Depot clings to ESG fantasies is its claims that it will “produce or procure 100 percent renewable electricity equivalent to the electricity needs for all Home Depot facilities by 2030.”
All that means is that Home Depot will pay far more for its power than necessary.
This decreases shareholder value, without any benefit.
Finally, speaking of shareholder value, while Home Depot is a strong company, it has lagged in some key areas under the combined leadership of Mr. Decker and his predecessor.
Over the past five years, Home Depot’s share price performance has lagged compared to that of its main competitor, Lowe’s.
This is largely attributable to the improvement in its competitor’s improved efficiency and expanding its margins, while Home Depot’s margins have remained flat over the past five years.
These can be indicators of an executive leadership that, if it’s not careful and sufficiently focused on its fiduciary duties, can one day wake up and wonder what happened to the significant lead in market share it had over its main competitor.
Just look at Anheuser-Busch as a cautionary tale of what woke can do to kill your business.
Please vote FOR Item Number 6 on your proxy card.
Read NLPC’s resolution for The Home Depot’s annual shareholder meeting here.
Listen to Chesser’s three-minute remarks presenting the proposal here.
