The bar for a Section 14 case is still incredibly high, since fraud claims have to meet a tough pleading standard.But the vast majority of derivative suits die before any consideration of the merits of the claims because plaintiffs can’t establish that it would have been pointless to ask the board to act because of directors’ self-interest.

"Even as Bernie and Arthur left the company, they were at a million a year; their compensation even with bonuses didn't come to $2 million a year, even in 1990," when chief executive pay was beginning to escalate into the stratosphere.

"They never took a stock option or a stock grant at any time.

He had been making more than $10 million a year in his six years as chief executive of retailer Home Depot. At last, people may have awakened to the obscenity of chief executive pay. Faye Wilson, a resident of Rancho Bernardo who was instrumental in the early financing of Home Depot, resigned from the company's board in early 2001, right after Nardelli was hired. One of the two founders of the company, Arthur Blank, a longtime associate of Wilson's, retired at the same time she did. The corporate strategy is "way off track," says Whitworth.

On his watch, sales growth had receded and the stock had dropped from above $50 to $41, while shares of competitor Lowe's had zoomed. Wilson feared that the Home Depot entrepreneurial, customer-centered culture, fostered under Blank and the other founder, Bernard Marcus, would disappear under Nardelli, a veteran of General Electric who would favor centralization, top-down decision making, militarized bureaucratization, and cost cutting that would alienate customers. "The original culture was very important to the success of the business," says Wilson, who was a senior vice president at the former Security Pacific Bank in 1981, when she took on the role of helping to finance Home Depot, which was then opening its third and fourth stores.

But there was an intriguing nugget in Judge Thrash’s opinion.

Home Depot shareholders, represented by lead counsel from Faruqi & Faruqi and Schubert Jonckheer & Kolbe, asserted Delaware state law actions for breach of duty and waste of corporate assets – but also claimed board members violated Section 14 of the Securities and Exchange Act because, according to the plaintiffs, board members signed off on proxy statements in 20 that falsely assured shareholders the board was taking care to secure the company’s data.

Plaintiffs' lawyers are voting with their filing fees, filing suits in federal court in addition to or instead of suing in Delaware.

Cornerstone Research has already reported a rise in securities filings in federal court.

— Robert Nardelli is corporate America's new symbol of wretched excess.