Robert Nardelli, who most recently stepped down as the head of Chrysler, is joining Cerberus Capital Management to oversee the management and operations of the firm’s portfolio companies.
Nardelli, whose career as a leader in corporate America started under the tutelage of Jack Welch at General Electric, also will join Cerberus’ investment and valuation committees, and will be involved in due diligence projects for potential investments.
Nardelli will serve as chief executive officer of Cerberus Operating and Advisory Company (COAC), which is comprised of operating professionals that “assist with sourcing, due diligence and portfolio surveillance”, Cerberus said in a statement. The employees at COAC serve as advisors and board members for Cerberus portfolio companies.
Nardelli was chief executive for seven years at Home Depot, where he is credited with doubling sales and increasing profits and expanding the business into China and Mexico. He also was criticised for the size of his compensation at Home Depot at a time when shareholders of public companies were pushing for more power to set compensation for senior executives.
In 2007, Nardelli resigned as Home Depot’s chief executive, taking a highly controversial $210 million severance package with him.
Even at Chrysler, the subject of compensation came up under Nardelli’s watch when executives at Chrysler Financial, the lending arm of the company, refused a $750 million loan from the government in April reportedly because the loan would have come with a cap on executive compensation. Chrysler Financial, at the time, said it did not need the additional financing and caps on compensation had nothing to do with it.
Nardelli joined Chrysler in 2007, taking a salary of $1 with other compensation that was not publicly disclosed. He announced earlier this year he would leave Chrysler once the company emerged from bankruptcy, which it did in June after agreeing to merge with Italian automaker Fiat.
Nardelli began his career at GE in 1971, advancing through the ranks until he was one of three executives groomed to replace Welch. Jeffrey Immelt was eventually chosen as Welch’s successor, and Nardelli left the company to join Home Depot.
Cerberus has been struggling to move forward now that the Chrysler debacle appears to be at an end. The firm acquired Chrysler in 2007 in a $7.4 billion deal that included a group of about 100 co-investors, including several hedge funds.
The firm turned over its entire equity stake in the company to the restructuring of Chrysler, and offered the first $2 billion of proceeds from Chrysler Financial to bolster the automotive operations of the vehicle maker.