With investors increasingly unhappy that CEO Robert Nardelli had earned more than $120 million even as the retailer's stock stalled, Home Depot (HD) said on Jan. 3 that Nardelli had resigned by mutual consent. The new chief: Frank Blake, who joined in 2002. Nardelli's six-year reign had been fraught with controversy: While the retail giant's revenues had nearly doubled during Nardelli's tenure and the earnings per share had risen 140%, critics noted that its shares were trading at roughly the same level when Nardelli took over in 2000. Nardelli won't leave a pauper: The former GE (GE) exec got $210 million in his departure deal.
In a filing with the SEC on Dec. 29, Apple Computer (AAPL) claimed co-founder and CEO Steve Jobs was innocent of wrongdoing for any of the options shenanigans an internal probe revealed. The stock market breathed a sign of relief, but the intrigue may not be over.
Seeking to boost customer service, Wal-Mart Stores (WMT) is adopting a new scheduling system that staffs U.S. outlets so more workers are on the floor during peak hours. The move comes as the world's largest retailer is struggling with weak sales and is expected to post its worst fourth-quarter profit growth in six years. WakeUpWalMart.com, a union group critical of the company's labor practices, contends the new scheme will push out costlier full-time workers because they no longer have consistent schedules. Wal-Mart says it has no evidence that the number of full-time workers will fall.
The United Steelworkers and Goodyear Tire & Rubber (GT) disagree on many matters, but they have one thing in common: Both claim to be the winner in the three-month strike that ended on Jan. 2. More than 12,000 workers walked out last October after the company said it would close two plants. In the end, though, the company agreed to shutter just one and to put off the closing until the end of 2007. But by ending work at the 1,100-person plant in Texas, Goodyear claims it will save $610 million over the three-year contract.
Ever since it was tarred in 2003 by federal and state allegations of improper trading, which it settled for $110 million, Putnam Investments has struggled. Maybe a trip north of the border will do it good. The $191 billion mutual fund unit of Marsh & McLennan (MMC) is expected to fetch about $3.9 billion from buyer Power Corp. of Canada. Neither Marsh nor Power will confirm the sale, which should be wrapped up early this year, a person familiar with the deal says. Montreal-based Power owns Canadian mutual funds and has wanted a toehold in the U.S. market.
French retail and luxury tycoon Fran?ois Pinault hinted on Jan. 2 that he might bid for Paris-based utility Suez (SZE). Based on the current Suez share price, Pinault would have to pay more than $92 billion to land his prize. He might also face opposition from the French government, which has been trying to broker a merger between Suez and Gaz de France. Some investors now want someone else to acquire Suez, though, and break it up to get more money.
Ma Bell has grown a few sizes. AT&T (T) completed its $86 billion buy of BellSouth (BLS) on Dec. 29 by agreeing to concessions friendly to rivals. AT&T promised federal regulators to maintain "network neutrality" of its high-speed Internet network for two years. AT&T will also offer dsl Internet access for $19.95 a month and freeze some wholesale rates, agreeing to allow rivals access to its network for 48 months. The deal gives San Antonio-based AT&T full control of Cingular Wireless, which it plans to rename AT&T Wireless and bundle with other services.
See "Wireline: Coming Up In The World?"
SteelmakerNucor (NUE) has become the envy of the industry by spreading its aw-shucks egalitarian culture to its new mills, boosting productivity in the process. That may be harder at its latest addition. Using some of its cash stash, the company said on Jan. 2 it was paying $1.1 billion for Harris Steel, a Toronto steel fabricator. In a first for Nucor, half of Harris' 3,000 workers are union members. Nucor CEO Daniel DiMicco says Harris is a good fit.
Detroit limped out of 2006 with lower sales and market share, plus the prospect that Toyota (TM) would overtake both General Motors (GM) and Ford (F) in worldwide sales by 2008 at the latest. In the U.S., GM sales were down 8.7%, while Ford was off 7.7%, and Chrysler (DCX) 7%, according to Auto-data. Toyota's U.S. sales, meantime, rose 12.5%. Lexus was the top luxury brand. BMW was second. As carmakers head to the North American International Auto Show in Detroit, they will see yet another sign of the times: Chang Feng will be the first Chinese company to display cars.
Leave this one off the r?sum?: J.C. Penney (JCP) fired Chief Operating Officer Catherine West on Dec. 28 after just five months on the job. The former U.S. credit-card head at Capital One Financial (COF) had failed to learn quickly enough the operational skills required in running a retailer, says one Penney insider. West, 47, could not be reached for comment. As a consolation, she'll reap a severance package of nearly $10 million.
Internet service provider EarthLink (ELNK) said on Jan. 3 that CEO Charles "Garry" Betty, 49, had died of complications from cancer. Betty, who had been with EarthLink since 1996, helped the Atlanta company boost its subscribers to 5 million, a tenfold increase. EarthLink said Michael Lunsford, who became interim CEO in November, would stay on.
Now if they could only do something about calories. On Jan. 3, Starbucks (SBUX) quit using trans fats in the pastries it serves in half of its 5,600 company-owned caf?s in the U.S., including outlets in Chicago, Los Angeles, New York, Philadelphia, and Washington. The switch away from trans fats, also known as partially hydrogenated oils, came as the nation's restaurants are rewriting their recipes to comply with a ban that New York City will begin imposing next July. KFC will convert to a healthier frying oil at all of its 5,500 U.S. locations by May, and in field tests, McDonald's (MCD) and Burger King are trying out oils without trans fats, which have been linked to heart disease. But the cooking oil change won't help dieters meet their New Year's resolutions. A Starbucks chocolate chunk scone still packs 510 calories and six grams of saturated fat.
See "How KFC Went Trans-Fat Free"