Shareholders at HopFed Bancorp (HFBC) have elected a director nominated by a critic of the Hopkinsville, Ky., company's latest acquisition deal.
Robert Bolton, who was backed by Joseph Stilwell, will replace incumbent Thomas Miller on the board of the $981 million-asset company. During the same annual meeting, a large percentage of HopFed's shareholders voted against the company's executive compensation plan.
"The shareholders sent a convincing message to the board," Stilwell said in an interview Wednesday. "They should hire an investment banker and work on maximizing shareholder value. To not do so, in the face of an overwhelming vote by their shareholders, would be arrogant and show that they have something other than the owners' wishes in mind, that they're being driven by something else."
John Peck, HopFed's president and chief executive, was not available for comment.
HopFed in February agreed to buy the $184 million-asset Sumner Bank & Trust in Gallatin, Tenn., for $14.3 million, representing an 11% premium over the seller's tangible book value. Stilwell, who controls funds that own about 8% of HopFed's common stock, has stated that HopFed should have used its capital to buy back stock.
In a nonbinding say-on-pay measure included in the May 15 meeting, roughly 42% of shareholders cast "no" votes. The measure was approved, though proxy advisors note that a say-on-pay vote with an approval rating below 70% is a cause for concern for management. Stilwell had written to HopFed shareholders, complaining that Peck's base salary had more than doubled since 2001 and that he had accepted perks such as directors' fees and club dues.
ISS Proxy Advisory Services and Glass Lewis had recommended that HopFed's shareholders vote in favor of management's proposals.
Shareholders re-elected two incumbent shareholders: Steve Hunt and Michael L. Woolfolk.