Golden Goodbyes to ex-CEOs

As President Bush gets ready to deliver his State of the Union address, here's one resolution for the new Congress: don't waste one penny of taxpayer money to launch an investigation into excessive CEO pay.

Sure, more than 90 million Americans who invest in stocks have a right to be furious when they read about pay packages — like the golden goodbye just awarded to Home Depot's ex-CEO Robert Nardelli. Nardelli was awarded $210 million when he was booted from the top spot earlier this month; other workers at the home improvement chain would be lucky to walk away with their orange aprons.

Rather than gin up some new legislation as Congressman Barney Frank and other Democrats propose, there's a simpler solution — a clarification of disclosure rules already on the books.

Turn the spotlight on the Securities and Exchange Commission and require the agency to begin putting the details of CEO compensation in plain simple English and math, so that the investing public can understand which fat cats are playing by the rules and which ones are crossing the line.

The Nardelli fiasco provides the perfect opportunity for Washington to refine the rules for corporate disclosure. No new laws are needed, just a template that would flag shareholders to the cold hard facts about a CEO's true cost to the company — whether he continues on the job or is fired.

In the case of Bob Nardelli, it appears there was very little to negotiate as the Home Depot directors showed him the exit this week. From the looks of things, all but $20 million of the do-it-yourself exec's $190 goodbye package was already guaranteed by his employment contract signed way back in December, 2000. In other words, his $210 million getaway deal was already baked-in-the-cake when Nardelli signed on as CEO six years ago.

Shame on the board for signing on to it, and shame on the SEC for making the disclosure process of opaque only a forensic accountant could begin to crunch the numbers. Had analysts and investors understood very fine print in Nardelli's 13-page deal, they might not have been shocked to see him walk away with such a king's ransom. In fact, they probably would have understood why he, like former NYSE Chairman Dick Grasso, was so eager to lock-in his contractual bounty and get out of Dodge.

While it was no secret on Wall Street that Bob Nardelli was among the most highly compensated CEO's in the land, it was only in the past few weeks, when the extent of the riches bestowed upon him by the board carried an eye-popping 9-figure number, that the story became front page news.

Imagine, if the SEC could devise a formula that would put all ballpark value on all CEO pay packages, grants, options deferred compensation and all? For shareholders it would be a handy tool with which to finally match pay versus performance.

Of course, the guys and gals in the corner offices will fight such a measure to the death — just as they fought an SEC proposal in 2006 that would shed light on all top earners (not just executives) at a public company. The so-called "Katie Couric clause" was rejected by the SEC last July.

In the case of Bob Nardelli, his employment contract was disclosed, but buried in a bunch of long filings. If the SEC had ways to break out such deals and break them down into dollars and cents, it wouldn't take six years for an overpaid CEO to finally be held accountable.

Terry Keenan is anchor of Cashin’ Inand is a FOX News Channel business correspondent. Tune in to Cashin' In on Saturdays at 11:30am and find out what you need to know to make your money grow and keep what you already have!