Home Depot will continue reimbursing Bob Nardelli, its former chief executive, for $55.3m in life insurance coverage for the next three years as part of the $210m severance package agreed when he resigned in January.
The home improvement retailer will also pay up to $1.3m of Mr Nardelli’s personal taxes related to the life insurance and $50,000 to cover his legal fees for negotiating the severance package.
A copy of the agreement was made public late on Thursday, as part of a filing by Home Depot to the Securities and Exchange Commission.
The mammoth pay-off caused uproar among many shareholder activists because Home Depot’s stock fell 8 per cent during Mr Nardelli’s six years in charge.
The controversy has made him a symbol of corporate excess in the US, amid mounting public and political scrutiny of soaring executive pay.
According to the SEC filing, the first part of the severance package is due to be paid on July 3, when Mr Nardelli will receive $33.8m in cash.
An additional $18m will be paid to him over the next four years for abiding by the terms of the deal, which includes a lifetime confidentiality agreement and a promise not to make disparaging comments about the company.
Mr Nardelli also vowed not to compete against Home Depot for at least one year and not to poach employees from the company for at least four years.
The remainder of the package will mostly come from the accelerated vestment of stock options. Mr Nardelli and his family will continue to receive healthcare benefits from the company for the next three years.
People familiar with Home Depot have said the terms of a future severance package were agreed when Mr Nardelli joined in 2000, leaving the company no choice but to honour the contract.
Mr Nardelli was hired from General Electric after he lost out to Jeff Immelt in the race to succeed Jack Welch as chairman of GE.
Home Depot was one of several companies competing for his services, forcing it to offer generous incentives to join.
Revenues and profits saw solid growth under Mr Nardelli but performance lagged behind that of Lowe’s, a rival DIY retailer.
Mr Nardelli resigned following months of pressure from investors for change.
Frank Blake, Home Depot's new chief executive, has been quick to distance himself from his predecessor.
He signalled a shift in approach towards executive compensation by agreeing to be paid less than half what Mr Nardelli received. And he granted a seat on the board to Relational, an activist investment firm that had led the calls for change.
Home Depot is the world’s largest home improvement chain and America’s second largest retailer after Wal-Mart.