Jefferson Savings Bancorp's annual meeting turned stormy last week when a number of shareholders accused management of ignoring their interests.
The shareholders, including one who owns 10% of the company, griped about their lack of representation on Jefferson Savings' board, the lack of a cash dividend, a recently adopted anti-takeover plan, and excessive management compensation.
David McCay, chairman of the $860 million-asset St. Louis company, declined to comment on the meeting.
Shareholders' discontent sent the company's stock to $18.50 Monday; It had been at $16.75 a week before the meeting.
Mary Katherine Drake, a vocal shareholder at the meeting, said she was upset that a St. Louis businessman who owns little stock in the company was named to the board.
"My biggest concern was the fact that I have 10% of the stock and I haven't been offered any representation," Ms. Drake said in an interview. "They're putting people on (the board) who will vote the way management wants them to vote."
Ms. Drake, a resident of Texas, also called the company's shareholder rights plan, adopted last summer, "a poison pill type of situation where they're totally protected and the shareholders are not."
Shareholders also questioned why the company has not paid cash dividends while management and directors get hefty salary and benefits.
They complained about Mr. McCay's $300,000 salary and "sleazy" pension packages that directors have implemented, according to an account of the meeting in the St. Louis Post-Dispatch.
In the Post-Dispatch Mr. McCay defended his decisions, saying, "I'm doing a good job, and if the board doesn't like the job I'm doing, then they can fire me."
Wayne Bopp, a thrift analyst with Stifel, Nicolaus & Co., St. Louis, who attended the April 24 meeting, said he was surprised to see how unhappy shareholders were but that at least one concern had merit.
"The biggest complaint that I thought was valid is they really ought to institute a cash dividend," said Mr. Bopp, who this week downgraded his rating on Jefferson Savings to "hold" from "long-term buy." "I'm highly confident they'll institute a cash dividend fairly soon."
Going forward, management also must communicate better with major shareholders, he said.
Ms. Drake said she has had no response from management since the meeting. "They haven't contacted me at all," she said.
Stanley Bradshaw, chairman of Roosevelt Financial Group, St. Louis, attended the meeting and stirred speculation that his $9.1 billion-asset institution is interested in Jefferson Savings.
However, Mr. Bopp said that Jefferson Savings' three pending acquisitions in Texas totaling about $365 million in assets make the company less attractive for Roosevelt and others because any acquirer would get two divergent markets. Roosevelt, for instance, sold off the Texas branches of an earlier acquisition, he said.
Jefferson Savings earned $1.3 million in the first quarter, up about 1% from a year earlier.