A dissident shareholder of a $308 million-asset thrift company has raised the stakes in a bitter proxy fight by hurling barbs at the chief executive over his 30% pay raise.
Barrett R. Rochman, a southern Illinois real estate investor who controls about 5.8% of Olney-based Community Financial Corp.'s stock, fired this latest salvo in a Securities and Exchange Commission filing about a week ago.
Mr. Rochman, who hopes to win board seats for himself and fellow dissident Michael B. Nadler at the company's shareholder meeting on April 27, chided Community Financial president and chief executive officer Wayne H. Benson, who made $100,000 in 1999, for taking a $30,000 pay raise this year. Mr. Benson has said that he has been disappointed with the company's performance.
"Do you think Community Financial would be able to afford Mr. Benson's pay raises in the event he ever becomes happy with the financial results of our company?" Mr. Rochman said in the SEC filing.
Mr. Benson did not return phone calls. However, in a March 3 letter to shareholders filed with the SEC, he urged investors to side with the company in the proxy fight.
"Your board of directors deeply regrets that Mr. Rochman has started what promises to be an expensive and distracting proxy contest," Mr. Benson wrote. He said the board is committed to "maximizing shareholder value."
The proxy battle could soon spill into the courtroom.
In early March, Mr. Rochman filed suit against Community Financial seeking board meeting minutes that the company had refused to give him. He said he wants to see whether board members have given themselves and management other rewards as part of the stock bonus program.
"Times have not been good there," Mr. Rochman said. "Their numbers are not good, but [directors have] been sure the bonus programs are."
In his SEC filing, Mr. Rochman said nine company executives and board members received 38,621 shares, worth about $375,000, over the past two years even though the company's performance has been "mediocre at best."
Community Financial's net income slid to $1.1 million last year from $1.2 million in 1998 and $1.4 million in 1997. Its stock was trading Friday at $9.3215, slightly below the $10 at which it was initially offered in 1995.
Community Financial's fight is far from an isolated case. With thrifts' stocks lagging and their earnings trailing those of commercial banks, shareholders of small thrifts increasingly are turning disgust with poor performance into action.
At least a dozen thrifts nationwide - including Haven Bancorp in Westbury, N.Y., and PS Financial Inc. in Chicago - are battling to keep dissident shareholders off their boards. Some of those, such as Massachusetts Fincorp in Boston, Jefferson Savings Bank in St. Louis, and Redwood Empire Bancorp in Santa Rosa, Calif., have been sued.