Mr Nardelli agreed to resign after months of shareholder anger over a $245 million-plus pay and bonuses package granted over the past five years.

Investors were incensed that Mr Nardelli could be so richly rewarded when Home Depot’s share price performed poorly and the company lost market share to Lowes, its biggest US competitor. However, as part of his agreement to leave Home Depot, Mr Nardelli was awarded an equally lucrative severance package, which amounts to about $210 million in total.

The retirement deal includes a cash payout of $20 million, the acceleration of unvested deferred stock options worth $77 million plus other options worth $7 million, bonuses of about $9 million, benefits of about $2 million, shares worth about $44 million, a pension of some $32 million and an $18 million payment for contractual obligations to be handed out over four years.

US politicians immediately seized on the retirement payments as further evidence that pay for executives in America is out of control.

Barney Frank, the House Financial Services Committee chairman, said: “The action of Home Depot’s board of directors to simultaneously dismiss Robert Nardelli and provide him with $210 million in severance is further confirmation of the need to deal with a pattern of CEO pay that appears to be out of control.

“Some defenders of CEO pay argue that CEOs are rewarded for increasing the stock or the overall value of the company, but judging by today’s market reaction, Mr. Nardelli’s contribution to raising Home Depot’s stock value consists of quitting and receiving hundreds of millions of dollars to do so.”

Mr Nardelli refused to answer repeated questions about his big pay deal. The issue came to a head at the Home Depot annual meeting last May, when angry investors demanded to know why he was paid so much while the share price was performing so poorly. Some also asked why Home Depot changed the way it awarded bonuses.

The method used to calculate part of Mr Nardelli’s pay was changed so that it was linked to earnings per share, a measure on which the company was doing well, instead of returns to shareholders, a measure on which it was doing poorly.

At the time of the meeting, the stock was down about 8 per cent while Lowes was up by 173 per cent.

Mr Nardelli was replaced at Home Depot by Frank Blake, its former vice-chairman and a longtime close associate of Mr Nardelli. Both men were senior executives of General Electric.

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