A beleaguered Hawaii banking company hopes to strengthen its leadership with a new chief executive officer and avert a repeat challenge to its board nominees.
The board of Honolulu-based CB Bancshares has approved the election of Ronald K. Migita to head the $1.4 billion-asset company.
Mr. Migita, currently chief operating officer, would replace James M. Morita, the company's 83-year-old president and CEO. Mr. Morita has announced plans to retire from all positions of leadership by this year's annual meeting, but he will remain a director.
The meeting is expected to take place in late spring.
Company officials also reached agreement with M.A. Schapiro & Co., a New York investment banking firm, on a joint slate of directors for this year's annual meeting.
M.A. Schapiro, which owns just over 6% of CB stock, waged an unsuccessful proxy battle last year to unseat two directors. The firm and other investors had complained of weak earnings, high expenses, and nepotism.
This year's nominees are Mr. Morita, Mr. Migita, consultant and former banker H. Clifton Whiteman, and M.A. Schapiro executive vice president Donald J. Andres. Mr. Whiteman was proposed by M.A. Schapiro.
CB officials declined to comment on the agreement until proxy materials have been filed with regulators and sent out to shareholders.
The succession plan is still subject to regulators' approval, which is expected to come by April 1, bank officials said. Mr. Migita declined to be interviewed before receiving that approval.
"We support the election of Ron Migita as chief executive officer," said George D. Reycraft, chairman of M.A. Schapiro. "He has a lot of experience in Hawaii, and we think he's going to do a good job."
Mr. Reycraft said the firm is also pleased that the two sides agreed on director nominees.
"It was in the best interests of ourselves, and we don't see why it wouldn't be in the best interests of other shareholders as well," he said.
The two moves come after a turbulent year for CB Bancshares.
Last fall, after a critical examination by federal and state officials, the Federal Reserve Bank of San Francisco imposed a memorandum of understanding on the company. The memorandum restricts its ability to pay cash dividends, incur debt, redeem stock, boost management and director salaries, or enter into acquisition or sale agreements.
Along with its announcement of Mr. Migita's election, the board also said it would reduce the company's cash dividend from 32.5 cents per share to just 5 cents.
Under a reorganization plan announced last October, the company is merging its thrift subsidiary, International Savings and Loan Association, into its City Bank subsidiary.
