Readers often ask why the newspaper cares so much about the compensation packages of local executives.
Bob Nardelli’s sudden resignation this week as CEO and chairman of Atlanta-based Home Depot and his $210 million severance package should leave little doubt as to why The Atlanta Journal-Constitution aggressively covers Georgia’s major companies and the executives who lead them.
Investors heralded the news of Nardelli’s resignation and ajc.com bloggers painted a picture of a company in dire need of fresh leadership.
Nardelli’s exit comes after several controversies involving the company, which have been well documented in these pages.
“His pay was always controversial because the stock went nowhere,” said AJC business editor Mark Braykovich. “In the last few years it’s become a lightning rod for criticism.”
Nardelli’s decision to stop releasing same-store sales figures a move that angered Wall Street analysts made it difficult to gauge the company’s performance, said Braykovich.
“The numbers are important because they show how your existing stores are faring from one reporting period to the next. You can keep adding new stores and growing your revenue, but that doesn’t mean you’re actually performing better.”
Last May, the company made national headlines when the board didn’t come to the annual meeting and Nardelli didn’t speak or take questions from shareholders.
In October 2005, AJC reporter Matt Kempner and columnist Maria Saporta analyzed the company’s charitable giving and found that despite the generous track record established by Home Depot founders Bernie Marcus and Arthur Blank, the $35.5 million the company gave to charity in 2004 amounted to less than 1/200th of its annual sales.
“We took quite a bit of heat on those stories,” said Braykovich. “Particularly in the business community.”
The newspaper received letters from readers who questioned the merits of the stories, which noted employee volunteerism and used a measure for charitable giving that Home Depot helped craft.
Managing editor Hank Klibanoff believes the stories were fair.
“We were hearing complaints from the community that the largess they had experienced in the past had dried up in terms of contributions and participation,” said Klibanoff. “We heard that not only from the arts, culture and philanthropy communities but also from the business community, which perhaps felt that Home Depot’s executive ladder wasn’t participating in civic endeavors at a level that was commensurate with its place in the national economy it’s in the Dow, it’s our biggest company by many measures, yet it was playing a shrinking role in the community.”
Several months after the stories ran, the newspaper entered a legal fight with the Atlanta Chamber of Commerce over access to records on the city’s bid for the NASCAR Hall of Fame. This added to a belief in some segments of the community that the AJC is anti-business.
“It’s our responsibility to be assertive in our reporting on corporate Atlanta, and I think we do it knowing that it sometimes might be uncomfortable for corporate leaders who are not used to being asked to explain why they do the things they do,” said Klibanoff.
Business reporters must be the watchdogs of corporate Atlanta, just as Metro reporters act as local and state government watchdogs, said Braykovich.
“Home Depot, at least in terms of revenue, is our largest company,” he said. “We believe we have an important role to tell readers everything important that is happening there, including whether they are a good corporate citizen, whether they have good corporate strategies in place and how much they are paying their top executive.”
During Nardelli’s six-year tenure with Home Depot, the AJC has written a mix of stories, including those focused on industry trends and company strategies. One recent example is Home Depot reporter Patti Bond’s story on the company’s move into the wholesale supply business.
In the interest of delivering fair and complete coverage, finding the right mix of stories on Atlanta’s businesses and institutions is critical.
