Home Depot CEO Nardelli quits

“Obviously, something happened over this last period of time that changed their mind and Nardelli’s mind about staying,” Marcus said.

Home Depot said Nardelli’s decision to resign was by mutual agreement with Home Depot.

“We are very grateful to Bob for his strong leadership of The Home Depot over the past six years,” Home Depot’s board said in a statement.

Nardelli was a nuts-and-bolts leader. He helped increase revenue and profits at Home Depot and increase the number of stores the company operates. Home Depot’s earnings per share have increased by approximately 150 percent over the last five years. But the public discussion about his pay and the company’s stock price became a distraction.

As of the end of 2005, Nardelli had earned $123.7 million in compensation excluding certain stock option grants since becoming CEO. His compensation for 2006 has not yet been disclosed.

Industry experts and analysts said his departure and Blake’s ascent to the top job are a good thing for Home Depot.

“This is not about strategy or vision,” said James Senn, director of Robinson College’s Center for Global Business Leadership at Georgia State University. “This is coming down to two things. Really the foundation of leadership is credibility. Bob has run into some problems there. The second is execution.”

Edward Jones analyst Stephanie Hoff said she views the developments at Home Depot as a sign that there was a need for change at the top, not a change in the company’s strategy.

“I think his gruff demeanor, while some people would consider that refreshing, sometimes hurt him,” Hoff said, adding that Blake is considered by some as more articulate and polished.

She added, “I think the board basically was looking at this situation and figured Nardelli had become such a lightning rod for criticism of his pay package.”

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