Robert Nardelli Cerberus

Robert Nardelli Finds a Position at Cerberus Capital

Robert Nardelli, the executive infamous for ‘earning’ a $210 million “golden parachute” upon leaving Home Depot, has landed a position with Cerberus Capital. He became familiar with Cerberus while he oversaw the private equity firm’s portfolio company, Chrysler. It may surprise people that Cerberus selected Nardelli as CEO of Cerberus Operating and Advisory Company. This is a reasonable reaction considering Nardelli’s recent track record.

Home Depot

Mr. Nardelli was hired as chief executive officer of Home Depot in 2000 after an unsuccessful bid to succeed Jack Welch at GE. Before Nardelli, Home Depot was headed former by Bernie Marcus, who had a easy-going saleman style which conflicted with his successor’s disciplined management style. Besides Robert Nardelli’s difficult manner, Home Depot faced the growing threat from home improvement competitor, Lowe’s.

When he left Home Depot the firm faced several challenges included: expanding overseas, reenergizing consumers domestically and growing the wholesale supply arm. Some have criticized his leadership for not sparking any innovation that would continue to propel the company’s growth. While it doesn’t seem he offered too much in creativity, he maintained the Home Depot’s position which may have already reached the peak for its growth and inevitably slowed. Overall, however, he ran the company pretty smoothly but he failed to anticipate the housing crisis (as few did). Since 2007 (when Nardelli left) Home Depot’s stock has tumbled from a 2007-high of just over $41 to as low as $18 this year. With an average managerial performance with Home Depot, few expected Bob Nardelli to receive a $210 million severance package. Here’s a look at Home Depot’s stock value from 2007 up til today:

Chrysler

While he had a relatively quiet tenure at Home Depot, Robert Nardelli’s next position as CEO of auto-maker Chrysler, was public and troubled. He led the ailing car company into the ground culminating in a plea to the federal government for assistance and filing of Chapter 11 bankruptcy.

His proponents would argue that he inherited a dying Chrysler company and managed to bring it out of bankruptcy with a sale to a group including Italian automaker Fiat. However, Erin Griffith rightly notes, that “the company’s sales fell 30% last year and 45% in the first quarter of this year, leading, as we all know, to one of the year’s largest bankruptcies.” Whether you blame Nardelli for Chrysler’s undoing or you credit him as a good manager dealt a bad hand, it is still curious that Cerberus would want to bring on Nardelli again.

Here is the beginning of Cerberus Capital Management’s press release on the move:

Cerberus Capital Management, L.P. (“Cerberus”), one of the world’s leading private investment firms, today announced that Robert Nardelli has rejoined the company as Chief Executive Officer of Cerberus Operating and Advisory Company LLC (“COAC”). Mr. Nardelli previously served as Chairman and Chief Executive Officer of Chrysler LLC. In his new role, Mr. Nardelli will be responsible for the supervision and oversight of the management and operations of the portfolio companies in which the funds and accounts managed by Cerberus and its affiliates are invested. Mr. Nardelli will also join Cerberus’ investment committee and valuation committee, and will be integrally involved in significant due diligence projects relating to prospective investments.

COAC is comprised of seasoned operating professionals that assist with sourcing, due diligence and portfolio surveillance. COAC members also serve as advisors and board members for Cerberus portfolio companies and are available to take interim or full-time positions with portfolio companies.

“Having worked with Bob over the past few years, both at Cerberus and while he was at Chrysler, we are excited to welcome him back to Cerberus,” said Mark Neporent, Chief Operating Officer of Cerberus. “Bob is one of the world’s best operating executives and a proven leader. We are pleased and fortunate that he has agreed to take the lead of our COAC team, and to become a member of the key committees through which we manage our business and our portfolio.”

In an interview with the Times earlier this year, Nardelli concluded, ““It’s not the fate I would have chosen, but it has allowed us to save the company. I think the cup is half full, and not half empty.”

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