Harry B. Brock Jr. suffered a setback last week in his campaign to gain control of Compass Bancshares when a charitable foundation threw its support behind bank management.
The Daniel Foundation, which owns 2.6% of Compass' 37 million shares outstanding, decided last Friday to vote those shares against Mr. Brock's proxy challenge and in favor of Compass management, which is led by chairman and CEO D. Paul Jones Jr.
Mr. Brock, who sits on the boards of both Compass and the Daniel Foundation, announced his intention Jan. 27 to ask the bank's shareholders to approve his three director nominees at the April 11 annual meeting. Mr. Brock has said he would put Alabama's fourth-largest bank up for sale if he wins control of the 12-person board.
Mr. Jones, who would be one of the three directors ousted should Mr. Brock succeed, has vowed to defeat that effort.
Mr. Brock said Tuesday that he had "fully expected" to lose the Daniel Foundation votes, though they constitute one of the largest blocs of Compass stock.
Mr. Brock is president and a director of the foundation, which was created by his now-deceased friend, R. Hugh Daniel, the Alabama construction magnate who helped Mr. Brock found Compass in 1963.
Besides Mr. Brock and treasurer/manager Gary Smith, the foundation's remaining four directors are members of the Daniel family. The problem for Mr. Brock has been that one of those four is Charles W. "Bill" Daniel, Hugh Daniel's son, who is also one of the six outside Compass directors siding with Mr. Jones.
At Friday's foundation board meeting, both Mr. Brock and Mr. Daniel abstained from voting because of their conflict of interest, according to Mr. Smith. The other four votes were unanimous in favor of bank management, he said.
The issue of the foundation's votes came up in a letter Mr. Jones and his six supporting directors sent to Compass shareholders this week. Dated March 18, the letter disputed Mr. Brock's claim in a recent message to shareholders that he personally controlled 5.34% of Compass shares. The actual figure is 2.7%, the letter said.
Mr. Brock said he assert an ownership claim over the Daniel Foundation shares.