The lone director who had been sitting on the fence during the Compass Bancshares proxy fight has finally jumped into the fray, throwing his support to dissident director Harry B. Brock Jr.
Director Garry N. Drummond, who had not previously stated his position in the ongoing battle, announced this week he had appointed Mr. Brock to vote his shares at the upcoming shareholders meeting on April 11. Mr. Brock, who founded Alabama's fourth-largest bank in 1963, is leading a campaign to wrest control of Compass' 12-man board by installing three of his own nominees.
Mr. Brock has said he will seek a buyer for Compass, which has $9.1 billion of assets, if he is successful next week.
Mr. Drummond, a mine operator and real estate developer, could not be reached for comment. But his 64,872 shares will not affect the outcome of the battle. Compass has nearly 37 million shares outstanding.
Mr. Drummond's announcement does, however, point up the bitter split on the Compass board. Since Mr. Brock announced his proxy challenge on Jan. 27, he has garnered the support of three directors, now including Mr. Drummond, which gives him a total of four, counting himself.
Compass management, on the other side, has six directors, including chairman and CEO D. Paul Jones Jr.
The situation is complicated by the fact that one of the 12 board seats won't be filled until next year, so six rather than seven are needed for control. Also, one of Mr. Brock's directors, G.W. "Red" Leach Jr., rotates off the board after the April 11 meeting.
The bottom line: Winning the proxy fight will give Mr. Brock six votes, just enough to win control. To put it another way: A Brock victory Tuesday would not be decisive without Mr. Drummond's support.
Mr. Brock said he had always considered Mr. Drummond an "independent" director who would finally see the wisdom of his - Mr. Brock's - position. "I guess I was confident enough to go forward with this campaign without his blood oath," Mr. Brock said.
In a letter to Mr. Brock dated April 2 and released Monday by Mr. Brock, Mr. Drummond wrote: "While I think both you and Paul (Jones) could have handled the situation better, I think your philosophy best represents the most value for the stockholders of Compass Bank.
"Our legal responsibilities as directors rest not to ourselves, and sadly enough, not necessarily to what is best for the employees, but rather, to the best value for the stockholders. I think your position represents that best value."
Compass spokeswoman Ellen Laden had no comment except to release a statement from Mr. Jones that said, "I respect Mr. Drummond's opinion and understand how difficult it would be to go against Mr. Brock because of their long-standing personal friendship."
Mr. Jones himself would be one of the three management-sponsored directors knocked off the board if Mr. Brock wins on Tuesday.