The news that Thomas Bloch, the son of the co-founder of H&R Block (the son of the H bit, it turns out, Henry, who at 88 is still with us) and former CEO of the company is not standing for re-election to the board of directors is cause for surprise. Sounds like the Roy Disney controversy a few years ago. Yes, he was related to Walt…. And while we’re on that subject, if Mr. Block, I’m sorry, Bloch is the son of the co-founder, how come the firm is called H&R Bloch, I mean Block? An old spelling error that never got corrected because no one noticed it in time to stop the first print run of business cards…?
That aside, in the letter he sent back on the 14th of this month he seems particularly miffed about a share buyback and the new CEO’s pay package. In addition to which he has been having serious differences with current chairman Richard Breeden whom he initially supported.
I love it when board arguments get aired publicly like this. It might just seem like dirty washing but it is in fact utterly refreshing to read about what must surely go on in boardrooms all the time. I wish there was more of it, but then we’d never get any work done.
The share buyback? The board authorized a buyback just before the stock went north. Not smart. Have to agree there. The comp for new CEO Alan Bennett (this is not the English playwright, this is a former interim CEO who according to Mr. Bloch won’t move to Kansas to be with Dorothy but continues to commute from his Florida and Connecticut homes)? Have to agree there too. A $900,000 signing bonus for someone who already worked for the company? That’s stretching the definition of signing bonus a little far. A million stock options at a special new low price? Don’t like that either. And:
The Company will provide on a tax “grossed up” basis for up to six months following the effective date of Mr. Bennett’s election as President and Chief Executive Officer: (i) reasonable and customary furnished housing and rental car expense to Mr. Bennett while in Kansas City in connection with the Company’s business and (ii) use of the Company’s Net Jet share to Mr. Bennett and his family for one round trip per week between Mr. Bennett’s Connecticut or Florida residences and Kansas City. The Company will provide Mr. Bennett with other customary health and employment benefits.
Have to agree with Mr. Bloch again. If you take the job, move. You can read all about it in the company’s 8-K filing.
Paul Hodgson - Senior Research Associate
