The chief executive of an Alabama community bank is under attack by a group of dissident shareholders.
In a letter filed last week with the Securities and Exchange Commission, the shareholders accused Kennon R. Patterson Sr., chairman and CEO of Community Bancshares in Blountsville, of paying high salaries to family members and "lining his own pockets at the expense of shareholders."
The group, which calls itself Stockholders for Integrity and Responsibility, is proposing changes in Community Bancshares' bylaws that would separate the offices of chairman and chief executive, restrict compensation to directors, and force the board to stand for election annually.
Shareholders will vote on the proposed changes at the bank's annual meeting April 22.
"The objective here is to clean up the bank and eventually take it onto the Nasdaq," said Bryan A. Corr, a former Community Bancshares director and a member of the dissident group. The company's shares are currently traded over the counter.
A more liquid stock, Mr. Corr added, would allow the $602 million-asset company to make acquisitions.
The dissidents especially object to Mr. Patterson's 1998 salary of $778,246, which they termed "outrageous." They charged in a letter to shareholders that the company paid his country club dues, bought him a BMW, and financed his hunting trip to Alaska.
They also cried foul about the salaries paid to Mr. Patterson's five relatives who work at Community Bancshares. They said family members, including Patterson, took in a combined $2.2 million in 1997, up from $500,000 in 1993.
Mr. Patterson did not return phone calls.
In its proxy statement, the company defended his compensation, asserting that in 1998 the bank "achieved a number of important successes," including the opening of branches and "the development of new products and services."
This proxy fight is just the latest dispute between the bank and the Corr group. When he resigned from the board in January, Mr. Corr criticized the way the board handled shareholder proposals. He also accused the bank of putting misleading information in its press releases.
Community Bancshares, in its proxy, called his allegations "patently false."