Home Depot shareholders rediscover their comfort zone at annual meeting
By Maria Saporta
After Home Depot’s annual meeting at the Cobb Galleria Thursday morning, Chairman and CEO Frank Blake was asked how he felt it went.
“It felt different,” Blake said. “This was fun.”
Then he attributed the mood among shareholders to the fact that Home Depot’s stock “is up,” hovering around $80 a share compared to $17 a share not so long ago when the company was facing a leadership transition and a devastating decline in the U.S. economy, especially in the housing market.
But perhaps the real reason the annual meeting felt different was because the rediscovery of the company’s core values and culture was now complete, and that realignment of its roots had been translated to Home Depot’s associates and shareholders.
In so many ways, Thursday’s annual meeting was reminiscent of the meetings that were held during the leadership of co-founders Bernie Marcus and Arthur Blank.
The co-founders would welcome all shareholders and employees (often one and the same) to share comments, complaints, ideas, impressions and constructive suggestions on how to improve the company. Those meetings, often lasting more than two hours, displayed one sentiment — they were all part of the Home Depot family.
Bonnie Hill, Home Depot’s longest serving board member (1999) and lead director, described Thursday’s meeting this way: “I love it when the shareholders are so comfortable.”
In all, 17 shareholders and/or Home Depot associates asked questions or made comments — several more than once.
Questions ranged from a conservative think tank representative questioning Home Depot’s policies toward sustainability; to shareowners asking about Home Depot’s unsuccessful operations in China; the impact of the Affordable Care Act; giving preference to American-made products; whether the company was going to split the stock; and to what Home Depot was doing to discourage union activity.
Blake patiently responded to each question, often referring back to the company’s core values — the inverted pyramid where customers come first, followed by the associates with the CEO at the bottom.
“If we take care of our associates and if we take care of our customers, everything else will take care of itself,” Blake said when asked about what changes employees could expect in their health care plans. Although Blake said there would be changes because of the new law, the company would continue to make sure its associates would be covered.
Later, Gary Patton, the employee with a 21-year career with Home Depot who had asked the health care question, felt compelled to observe that there were “many more positive comments than negative ones” at the meeting.
“You are doing the job,” Blake said. “I’m just up here at the mike.”
And Patton was comfortable enough to say that there still were not enough sales associates on the floor to serve customers in the stores. Blake said that as sales improved, it would permit stores to add more hours to the floor.
About union activity, Blake said the company’s goal was that “there never be a need to contact a union because a union would not do anything for them.”
Of course there were the individual issues about the high cost of installing a water heater or a former employee who felt she had been discriminated against because of a medical condition. Both of them were directed to meet with Home Depot executives who could deal with their issues.
There were several upbeat testimonials of shareholders who had bought Home Depot stock years ago, and how it had changed their lives.
Robert Chandler said that in 1984, he started giving his grandchildren (he now has seven) $100 of Home Depot stock on their birthdays and as holiday presents. He later increased that to $200. One grandson used Home Depot stock to put a down-payment on a home, and one grand-daughter used her stock to buy a new car.
Blake was especially proud that a 10-year-old shareholder, Everett, was present, and even asked a question about new models in the stores.
“Thank you for investing your money in Home Depot,” Blake told one of his youngest shareowners. “I hope you will be at the mike two decades from now saying it was a good decision to invest in Home Depot.”
The mood of the meeting was quite a departure of most annual meetings that are held in Atlanta and likely all over the country. There are meetings where few shareholders show up and never ask questions, and executives brag about the brevity of a meeting. There are meetings that have become spectacles — platforms for showmen with their own causes who take advantage of major brands to get their day in the sun (think the Coca-Cola Co.).
But the thoughtful, constructive, comfortable annual meeting where a CEO allows shareholders to vent (with no time limit) and where there is a spirit of “we’re all in this together” is all too rare.
It all goes back to the tone set by the CEO — a tone that Blake borrowed from the “Bernie and Arthur” playbook.
Not surprisingly, Blake keeps the co-founders close to his side.
At the board of directors dinner Wednesday evening at the St. Regis Hotel with the company’s executive team (about 20 of the top officers), the special guests were Bernie Marcus and Arthur Blank.
The co-founders shared a message of inspiration and humility — saying the company had never been under better management.
But they were quick to add: “Never forget the reason we are here. It is the 300,000 associates in our stores. They are far more important than you. Never let them down.”
As Thursday’s annual meeting demonstrated, Home Depot has come full circle.
It has found its way back home.