HopFed Bancorp in Hopkinsville, Ky., has taken its biggest investor to task for refusing to meet with its CEO.
Independent members of the $871 million-asset company's board sent a letter to Joseph Stilwell of Stilwell Group on Jan. 25 complaining that the investor had rebuffed several efforts by John Peck to schedule a meeting in New York. The letter was included in a recent HopFed regulatory filing.
"The board believes that matters of mutual interest could be discussed in detail at such a meeting, and that a resolution of many of your concerns could be achieved," the letter said. "We remain available to meet with you, if you reconsider your rejection of such a meeting and recognize that it may benefit both you and your shareholders."
The board also made it clear that Peck has its "full support."
The action comes two months after Megan Parisi, Stilwell Group's director communications, sent a strongly worded letter to Peck, who is also HopFed's president, urging the executive to resign, while taking exception to his compensation and the company's "paltry" dividend.
"It seems to me you have little regard, value or respect for shareholders," Parisi said in her Nov. 21 letter. "You have utterly failed to earn our trust. Maybe your next letter should be a resignation — then we'd be the ones with something to smile about."
Parisi said Thursday in response HopFed's letter to "keep your eyes peeled" for a response.
The board's letter notably defended Peck's compensation, stating that it is in the 34th percentile of peers. "In simple terms, this means two-thirds of all peer group CEOs are paid more than ours is — this could hardly be characterized as a bloated pay package," the letter said.
The letter also touted HopFed's efforts to make more loans and enter new markets after "the economic crisis greatly impacted our market areas."
Stilwell Group, which owns 9.5% of HopFed's stock, has locked horns with the company in the past. In 2013, the investor sent a letter of HopFed's other shareholders complaining that Peck's base salary had more than doubled since 2001 and that he had accepted directors' fees, club dues and other perks. Stilwell also objected to HopFed's plan to buy Sumner Bank & Trust; that deal ultimately fell through.
Stilwell was able to get a representative, Robert Bolton, appointed to HopFed's board. The firm did not nominate a replacement when Bolton's term expired in May.