With a company that has been losing customers and executives, H&R Block got another blow this week when Thomas Bloch, son of founder Henry Bloch, said he would not seek reelection as a director because of differences he has had with the board.
The announcement follows this month's abrupt resignation by CEO Russ Smyth after less than two years in the job. Bloch also criticized the compensation given new CEO Alan Bennett as "overly generous" and tax preparation fees as too high.
Bloch wrote that he opposed a $2 billion stock buyback authorization in 2008 and the fiscal 2010 financial plan which he said was overly optimistic. He had also opposed re-election if Richard Breeden as chairman last year. Although Bloch had supported Breeden when he joined the board, "Richard and I have had differences of opinion on a number of fundamental issues that, I believe, could affect the company’s long-term future".
A major issue the former CEO cited was pricing strategy. Bloch, who stepped down 15 years ago and rejoined the board 10 years ago, said if the average charge for returns had increased consistent with inflation since 1996 "it would be significantly less than its current level."
He also said he hoped Bennett, the new CEO who had served as interim CEO two years ago, would moved to Kansas city and not commute from his Connecticut or Florida homes. Bloch offered serous criticisms of Bennett's compensation. He wrote, "Furthermore, I hope he [Bennett] will demonstrate a genuine commitment to long-term value creation, even though his compensation package, I believe, may prove to be seriously flawed with respect to its incentive components. In my opinion, the package is also overly generous.
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards. Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that. A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
