Joseph M. Ochman, chief executive of IBS Financial Corp. in New Jersey, has a nightmare that won't go away: the company's largest shareholder.
Lawrence B. Seidman, who controls about 3.4% of the Cherry Hill-based company's stock, lost a proxy battle in December to put an independent slate of directors on the board that would likely have pushed for a sale.
But instead of fading away, Mr. Seidman has bought more stock in the company, whose subsidiary is Inter-Boro Savings and Loan Association. Between Jan. 18 and March 11, he and fellow dissident shareholders purchased another 47,170 shares in the company, spending $691,380.
The group now has 6.14% of IBS Financial's outstanding shares, according to documents Mr. Seidman filed with the Securities and Exchange Commission last week.
He and another member of the group also have fired off letters to Mr. Ochman, criticizing him for the how much directors and management are paid, given the company's "poor financial performance."
"I don't mind paying people money if they get results, but there are no results here, so they shouldn't be getting this kind of money," Mr. Seidman said.
He criticism was in part directed at the company's lackluster return on equity - 4.50% for the quarter ending Dec. 31, about half its peer group average. The return on assets was 0.95%.
IBS Financial's earnings also dropped by more than a third in the quarter from the year-earlier period, to $1.7 million. A statement attributed the falloff to the costs of expanded employee and director benefit programs and expenses incurred from the proxy fight.
When asked about Mr. Seidman's charges of lavish compensation, Mr. Ochman said angrily, "I don't know what you're talking about. Mr. Seidman is back to where he started."
Mr. Ochman said in a brief phone interview he would not comment because of a pending lawsuit filed against the bank by Mr. Seidman. Mr. Seidman is suing the company for libel for remarks in a letter to shareholders.
Mr. Ochman's salary and bonus totaled $572,750 in fiscal 1995, which falls in the top quartile among his peers at banks with more than $500 million of assets, according to Sheshunoff Information Services. He also received $1.2 million in stock grants last year.
ISB Financial has $726 million of assets.