WASHINGTON (Bloomberg) ? Home Depot Inc. chief executive officer Robert Nardelli?s ?egregious? $210 million severance package may be the catalyst for legislation that tries to rein in executive pay at US companies.

Nardelli, 58, was ousted after Atlanta-based Home Depot?s shares dropped 7.9 percent and the company lost market share to Lowe?s Cos. during a six-year reign in which he earned $225 million. Nardelli?s exit pay includes $20 million in cash and compensation earned and not yet received.

?It?s just egregious,? Frank Glassner, chief executive officer of Compensation Design Group in New York, said in an interview yesterday. ?For what the shareholders left on the table, versus what Bob Nardelli is going to take home, I would classify that not as pay for performance, but pay for attendance or pay for ego.?

Congress and the US Securities and Exchange Commission have focused on excessive executive pay in recent months. In July, the SEC began the biggest overhaul of rules covering compensation in 14 years, calling on companies to expand the information they provide to investors about the salary, incentives and perks given to senior executives.

US Representative Barney Frank, a Massachusetts Democrat who is the new chairman of the House Financial Services Committee, said yesterday that he would hold hearings on executive pay and will push for legislation to give shareholders greater say over what CEOs make.

?The justification for these really very, very large amounts of money being given has been that they are performance-driven,? Frank said of Nardelli?s package after a speech at the National Press Club in Washington. ?When it?s given as a consolation prize for bad performance, then the whole justification is called into question.?

A measure on executive pay that Frank wrote stalled in the Republican-controlled Congress last year.

Jerry Shields, a Home Depot spokesman, said the company wouldn?t comment on Nardelli?s package.

Matthew Fassler, an analyst at New York-based Goldman, Sachs & Co., yesterday raised his price target on Home Depot shares $1 to $42 on the ?increased likelihood? Nardelli?s departure will lead to a leveraged buyout. Fassler said there is a 33 percent chance Home Depot would be the subject of an LBO at $45 a share. He rates the stock ?neutral.?

Nardelli?s payout follows almost $200 million received by former Pfizer Inc. CEO Hank McKinnell, who was forced out in July. Exxon Mobil Corp. gave former chairman and CEO Lee Raymond a $357 million retirement package when he stepped down in 2005.

The average pay for chief executives rose to 369 times that of the average worker in 2005, up from 131 times in 1993 and 36 times in 1976, according to a study by Kevin Murphy, a finance professor at the University of Southern California.

?We hold the board of directors accountable,? said Richard Ferlauto, director of pension investment policy at the American Federation of State, County and Municipal Employees. ?The compensation committee should have known better. It is not a divine right of CEOs to be paid huge numbers of dollars when they do not perform, when they do not create value for shareholders.?

Frank said he preferred legislative changes that would give more information to investors. He said it wouldn?t be appropriate for lawmakers themselves to intervene directly and restrict company decisions on pay. It should be easier for stockholders to determine the actual dollar amounts being promised to executives, including pay and retirement packages, and what happens if they leave or if there is a change of ownership, Frank said.

Boards of directors aren?t enough of a check ?because they don?t stand up to the CEO,? he said. Boards and executives have a ?collusive relationship,? he added, since directors are chosen by the chief executive they are supposed to supervise.

Nardelli?s separation package, called for in his contract with the company, also includes a $9 million payment for long- term incentive awards, $44 million in previously earned and vested deferred shares, $32 million in retirement benefits and $18 million in other compensation.

?It?s an outrageous amount of money,? said Jeffrey Sonnenfeld, senior associate dean at the Yale University School of Management in New Haven, Connecticut. ?It is even more than Carly Fiorina was paid over the same period of time for a comparable drop in shareholder value. In both cases, it was bad deals from the first day.?

Fiorina, former chief executive of Hewlett-Packard Co., was paid about $42 million in severance, including stock options, restricted stock and annual pension payments, according to four union pension funds that sued the company for the return of the payments in March.

Patrick McGurn, executive vice president at Institutional Shareholder Services in Rockville, Maryland, called the Nardelli payment a ?$200 million-plus mistake? that ?should serve as a cautionary tale for other boards that find themselves rushing to impulsively ink a lucrative, one-sided, long-term contract with a ?can?t miss? executive. Most of the pay-for-failure payout flows directly from Nardelli?s flawed employment agreement.?

Home Depot and Lowe?s are both headed for the smallest increase in net income in at least nine years as a slowing housing market crimps home-improvement spending.

Lowe?s shares have tripled during Nardelli?s tenure at Home Depot.