Postings

Shareholders 3, Management 0 

Another classic showdown between management and a vocal shareholder ended in favor of the activist investor. H&R Block shareholders backed the three board nominees put forth by Breeden Partners. The approval signaled support for the trio’s intent to push for a streamlined company. Richard Breeden, Robert Gerard, and L. Edward Shaw, Jr., were elected to the board.

“The votes represent a landslide victory for Breeden Partners,” said Breeden in a statement. “The vast majority of H&R Block shareholders agree that it is time for a significant change in the strategic direction of this company.”

The Greenwich, Conn.-based investment fund run by Breeden, the Securities and Exchange Commission chairman from 1989 to 1993, began buying shares of H&R Block in November and holds a 1.8 percent stake. Breeden wants the company, whose shares are down more than 20 percent from five years ago, to focus on its core tax business and get out of the securities-brokerage, banking, and lending businesses. Shareholders also approved a nonbinding resolution to separate the office of the chairman and the CEO. Current H&R Block chairman and CEO Mark Ernst said he would take it under advisement.

H&R Block raised questions to no avail about Breeden’s role as the corporate monitor of KPMG, which is also the accounting firm used by H&R Block. The tax firm told its shareholders that Breeden’s relationship with KPMG would put the company’s ability to maintain its relationship with the accounting firm at “grave risk.” But shareholders didn’t buy the argument.

Management has struggled with its ailing mortgage business, Option One Mortgage Corp. H&R Block last spring agreed to sell Option One to private-equity firm Cerberus, but management has since said it is negotiating possible changes to the deal because “certain closing conditions” weren’t being met.

James M. Benson, former CEO of John Hancock Life Insurance, has joined the board of Sapient. Benson serves as president and CEO of Clark Benson LLC and as a principal of Pearl Meyer & Partners, a public executive compensation and benefits company.

Energy holding company NiSource elected former Ford Motor Co. executive Deborah Coleman to its board. Coleman, executive vice president and chief operating officer of the National Urban League, will serve on the environmental health and safety, corporate governance, and nomination and compensation committees.

David Cote, chairman and CEO of Honeywell International, was elected to the board of JPMorgan Chase where he will serve on the risk and public responsibility committees.

Atmel Corp. expanded its board from six to eight members with the election of Papken Der Torossian and Jack Saltich as independent directors. Der Torossian is a director of Parker Vision, chairman of Vistec Semiconductor, and managing director of Crest Enterprise. Saltich serves as chairman and interim CEO of Vitex Systems and on advisory boards for DuPont Electronic Materials and Cypress Semiconductor.

Paul Diaz, president and CEO of Kindred Healthcare, has been elected to the board of DaVita, one of the country’s largest providers of long-term healthcare. Diaz serves on the boards of PharMerica, the Bloomberg School of Public Health at Johns Hopkins University, and the board of visitors of Georgetown University Law Center.

Elected to the board of Boston Scientific was Ray Elliott, chairman of the board of Zimmer Holdings.