A report from an independent election inspector found that an activist investor group led by Joseph Stilwell failed to submit a signed ballot before the polls were closed at First Financial Northwest's (FFNW) annual meeting last week.
Stilwell's director nominee, Spencer Schneider, turned in his signed "master ballot" more than two hours after the polls closed at 9:16 a.m. last Thursday, according to the report prepared by Raymond J. Riley of Carl T.
Hagberg and Associates and released by First Financial late Wednesday. As a result, only one ballot with Schneider's name was permitted.
The inspector's report is the latest move in an ongoing proxy battle for a seat on the $1 billion-asset company's board. Both the Renton, Wash., company and Stilwell Group have declared victory in the proxy contest. Stilwell Group has said it would consider litigation to stop First Financial from invalidating what it says are the correct vote results showing Schneider as winning election.
The inspector's report did not say how many votes for Schneider were invalid. In a regulatory filing late Tuesday, First Financial disclosed that Victor Karpiak, its chairman, president and chief executive, received the fewest votes among its slate of nominees.
Neither Stilwell nor Schneider were immediately available for comment.
According to the inspector's report, a company representative named Artie Regan of Regan & Associates challenged the results of the proxy contest "on the grounds that no Master Ballot had been submitted by the named proxy for the opposition" before the polls closed. Schneider's representative, Rebecca Kral, said a ballot was not needed. She would later challenge whether there was a quorum at the annual meeting.
Riley ruled that 77.15% of First Financial's outstanding shares were present at the meeting, either in person or by proxy, creating a quorum. Riley also ruled that the Stilwell Group did not file the required ballot in time, "and this fact was not in dispute at the meeting site." Finally, Riley explained that a "master ballot" is also known as a "ballot of the appointed proxy," and that the company furnished such ballots at the meeting, with Schneider's name listed as the opposition candidate.