HOME DEPOT, INC. - DEF 14A - 20250407 - PROPOSAL_4
SHAREHOLDER PROPOSAL REGARDING INDEPENDENT BOARD CHAIR (ITEM 4 ON THE PROXY CARD)
Mr. John Chevedden, located at 2215 Nelson Avenue, No. 205, Redondo Beach, California 90278, has been the beneficial owner of at least $2,000 in shares of the Company’s common stock for at least three years prior to submission of his proposal and has notified the Company of his intention to present the following proposal at the Meeting. The Company is not responsible for the accuracy or content of the proposal, which is presented as received from the proponent in accordance with SEC rules.
Proposal 4 – Independent Board Chairman
Shareholders request that the Board of Directors adopt an enduring policy, and amend the governing documents as necessary in order that 2 separate people hold the office of the Chairman and the office of the CEO.
Wherever possible, the Chairman of the Board shall be an Independent Director.
The Board has the discretion to select a Temporary Chairman of the Board who is not an Independent Director to serve while the Board is seeking an Independent Chairman of the Board on an expedited basis.
It is a best practice to adopt this policy soon. However this policy could be phased in when there is a contract renewal for our current CEO or for the next CEO transition.
The roles of Chairman and CEO are fundamentally different and should be held by 2 directors, a CEO and a Chairman who is completely independent of the CEO and our company.
A lead director is no substitute for an independent Board Chairman. Plus the Home Depot Lead Director violates the most important attribute of a Lead Director – independence. As director tenure goes up director independence goes down. The Home Depot lead director has 25-years long director tenure.
Home Depot has 2 directors with more than 17-years tenure each. This could be a red flag for poor Board refreshment and lack of succession planning.
Please vote yes:
Independent Board Chairman – Proposal 4
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30 | The Home Depot 2025 Proxy Statement |
RESPONSE TO PROPOSAL REGARDING INDEPENDENT BOARD CHAIR
The Board recommends that you vote against this shareholder proposal. Shareholders of the Company rejected similar proposals in 2006, 2007, 2010, 2015, 2022, and most recently in 2023, when 73% of votes were cast against the proposal. Our Board believes in the importance of having the flexibility to meet the needs of the Company and its shareholders rather than being limited to a particular leadership structure. On at least an annual basis, our Board assesses its leadership structure, including the appointment of the Board Chair. The stability and consistency in the leadership provided by one person serving as Chair and CEO, together with our independent Board committees, our independent Lead Director, and our other robust corporate governance practices, including our commitment to ongoing Board refreshment, has provided a very effective Board leadership structure for our Company at many times throughout our history.
Since 1998, the Company has had a Lead Director, an independent director elected annually by the independent members of the Board. The robust responsibilities of the Lead Director role are set forth in our Corporate Governance Guidelines. Gregory D. Brenneman currently serves as our Lead Director and has served on the Board through multiple business cycles and with a number of different management teams, which provides him with a deep level of understanding of our business that enhances his independence from management and his ability to provide strong oversight. The NCG Committee undertakes a rigorous analysis of each director’s independence, which is reviewed by the Board, on at least an annual basis. Our Lead Director and other independent directors, together with our independent Board committees, have provided strong independent and effective oversight of management. Our performance since 1998 has demonstrated the effectiveness of this leadership structure.
Our Board recognizes that circumstances may change such that a different structure could be warranted to support the Company’s needs. At different points in the Company’s history, the Board has recognized the importance of the departing CEO remaining as the Chair of the Board for a period of time to assist with a smooth succession process and leadership transition for the incoming CEO. In our two most recent CEO transitions in 2014 and 2022, the independent members of our Board determined that it was in the best interest of the Company for the former CEO to remain on the Board as Chair following his successor’s appointment as CEO to support the leadership transition. When the prior CEO retired from the Chair role, the independent members of the Board again carefully assessed the Board’s leadership structure to determine what best supported the Company and decided to return to a combined Chair and CEO structure. In the role of Chair, to which he was appointed in 2022, Mr. Decker serves as a conduit between the Board and the operating organization to promote communication and provide consistent leadership on the Company’s key strategic objectives. Utilizing this leadership structure, the Board has overseen our transformational journey to continue investing in and growing the business by executing across multiple strategic initiatives.
We believe that our Board is best situated to determine which director should serve as Chair. While having a separate CEO and Chair has supported a smooth management transition and ensured strong leadership at other times in the Company’s history, our independent directors have determined that having a combined Chair and CEO, a strong independent Lead Director, and Board committees composed entirely of independent directors provides a successful Board leadership structure for the Company at this time. We believe that the Board should retain the flexibility to decide the most effective leadership structure given the needs of the Company and its shareholders at any given time.
WE RECOMMEND THAT YOU VOTE “AGAINST” THE
ADOPTION OF THIS SHAREHOLDER PROPOSAL.
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The Home Depot 2025 Proxy Statement | 31 |
SHAREHOLDER PROPOSAL REGARDING BIODIVERSITY IMPACT AND DEPENDENCY ASSESSMENT (ITEM 5 ON THE PROXY CARD)
