Florida Federal Facing Another Rough Shareholder Meeting as Dissidents Seek to Replace Management's Slate of Directors
ST. PETERSBURG, Fla. -- The vote has been called a "referendum on management." Analyst Tim Rayl of Raymond, James & Associates here calls it the "key event in determining the future of Florida Federal."
Florida Federal Savings & Loan Association officials, in an effort to downplay the significance of Wednesday's annual meeting, prefer to characterize it solely as a vote for four board of directors seats.
Whatever the case, shareholders in Florida Federal -- the largest S&L In the Southeast with $4.6 billion in assets -- are scheduled to gather here on Wednesday to cast ballots that will shape the future of the company.
"It will test the feelings of shareholders, the direction of management and the abilities of the Greenes to face the fire again," says Mr. Rayl.
The Greenes are Florida Federal chairman Raleigh W. Greene Jr., whose father founded the thrift in 1933, and Raleigh W. "Lee" Greene 3d, whose dad recommended that the board name him president and chief operating officer last year. The board subsequently appointed him.
Neither is popular with the company's shareholders. The animosity has little to do with nepotism or even the performance of the thrift.
It's simply that many of the shareholders have never forgiven the Greenes for the way the company handled its public offering when it went public in May 1983. Although Florida Federal told potential investors before the offering was made that it would issue 6.25 million shares, it actually doled out 9.35 million shares.
The result, analysts say, was a glut of overpriced Florida Federal stock. The price plummeted from $20 per share at the public offering to the $15 range within three months. "Shareholders got massacred," says Samuel Beebe, a bank analyst with Williams Securities Group Inc. in Tampa.
Two shareholders filed suit against Florida Federal and the stock has hovered in the $14 to $15 range for more than a year, as has the bad taste in the mouths of many shareholders.
"I don't think [the thrift's management has] ever regained the confidence of their shareholders," says Richard Blankenbaker, a stockbroker with Robinson-Humphrey/American Express in Jacksonville. Mean Crowd
Last year's annual meeting resembled a wrestling match more than a business get-together. Shareholders shouted at management and suggested they cut their salaries. Raleigh Greene Jr. was booed.
This year, things could be worse.
A dissident shareholders group led by Nashville investor Webb Follin Jr. and his attorney Eugene Stearns has proposed a slate of four candidates to oppose the four members of Florida Federal's 13-member board of directors up for re-election. Both sides are filling newspapers with advertisements lambatsing the other's position.
A victory of sorts has already been won by the dissidents when the company delayed a special shareholders meeting scheduled to follow the annual meeting. The special meeting would have addressed Florida Federal's controversial plan to convert to a state charter.
The dissidents accused management of slipping some antitakeover provisions into that conversion plan. Management denied it, but later agreed to remove the provisions from the conversion plan.
Now the dissidents may have Florida Federal on the ropes. "I think they have a good chance of unseating the incumbent director," Mr. Blankenbaker says.
Says Raymond James' Mr. Rayl; "I can recall few occasions when I've seen such a reservoir of ill will toward management."
While Florida Federal officials acknowledge that shareholders are less than enamored of them, they attribute it to a sole factor: the decline in its stock price.
"It's really as simple as that," says H.E. "Buz" Rummel, Florida Federal's vice president of investor and public relations. "Nobody likes it when the stock goes down. We don't like it ourselves. …