Home Depot Chairman and Chief Executive Robert Nardelli abruptly quit after a year of heavy criticism for everything from his pay package to the underperforming retailer's corporate governance.
Nardelli, 58, will walk away with a severance package of about $210 million. He and the company said in a release that his leaving was a "mutual decision."
Succeeding Nardelli is Frank Blake, the 57-year-old vice chairman who joined Home Depot in 2002. The moves of Nardelli and Blake, who are both former executives of General Electric, took effect on Tuesday, according to the company.
Home Depot told CNBC that Frank Blake was elected as its permanent chairman and CEO. "This is not an interim position," the company said.
Nardelli came under fire early last year for a pay package that some investors said was not in line with Home Depot's performance since he arrived in late 2000.
Wall Street largely cheered the leadership change. Many analysts said that although Nardelli helped Home Depot with systems upgrades, recent unfavorable publicity dented confidence in the world's largest home improvement retailer as it faces a slowing housing market and more competition.
"I just think it's a sign that just from a morale standpoint and a confidence standpoint ... from investors, from employees, from the market, they needed to make a change," Jon Fisher, a portfolio manager at Fifth Third Asset Management, told Reuters. Fifth Third Asset Management owns Home Depot shares.
The resignation also may bring near-term help to the company's shares, some analysts said.
"This is a positive for Home Depot shares in the short term," added John Person, president of NationalFutures.com, in an interview with Reuters. "The resignation of Nardelli gives a chance for new leadership, better incentives for the growth for the company and better profit margins. (Nardelli's departure) is a surprise, but probably a welcome surprise because Home Depot has not been able to increase its share price for the last two years."