Feb. 18 (Bloomberg) -- First Financial Northwest Inc., a Renton, Washington-based lender, said director Spencer Schneider resigned after asking the bank to remove pictures of past directors and serve only hard candies at annual meetings.
Schneider made the requests at a Feb. 15 board meeting as “symbols of austerity,” and also asked that the bank suspend serving refreshments at the annual shareholders’ meeting, offering just hard candies instead, he said. Schneider, general counsel for shareholder Joseph Stilwell, resigned immediately when the company asked that his requests be placed on the agenda for a board meeting next month, the bank said yesterday.
Stilwell, who controls about 8.5 percent of the bank, and Schneider have criticized compensation practices and said they will fight to remove some directors at the next annual meeting. Chairman and Chief Executive Officer Victor Karpiak is among directors at the bank, which had $1.06 billion in assets at the end of 2011.
“Having seen firsthand senior management and the directors over the past five weeks, we believe that, collectively, they are irredeemable,” Stilwell said in a Feb. 15 filing. “We believe we can better maximize shareholder value by running a contested election for board seats.”
Karpiak didn’t respond to requests for comment. Hard candies are “cheap” and represent austerity, Schneider said. Many shareholders’ meetings waste investors’ money on catering because firms go “all out,” he said.
First Financial Northwest is the parent company of First Savings Bank Northwest, a lender that serves the Puget Sound region of Washington, according to the statement. Its hometown of Renton is about 12 miles from Seattle.
“Something is rotten in Renton,” Schneider wrote in his resignation letter, in which he claimed the board had rejected his requests. “Your corporate culture is unprofessional, pompous, sneaky, wasteful, stubborn, and moronic.”
Net income last year was $4.2 million, after the bank lost about $94.8 million in 2009 and 2010, the filings show. Karpiak was paid more than $3.7 million from 2008 to 2010, Schneider said in his resignation letter.
First Financial Northwest rose about 48 percent last year, the sixth-biggest gain in the in the 417-company Nasdaq Bank Index. The shares have gained 27 percent so far this year to $7.48. That’s 36 percent below the closing price on Oct. 11, 2007, the day after the bank’s initial public offering.
“I wanted them to take these simple steps to demonstrate their commitment to focusing on the shareholders’ interests above their own and of former directors,” Schneider said in a phone interview. “At the annual meeting, we’ll elect new people and remove people from their board.”
--With assistance from Molly Seltzer in New York. Editors: Dan Reichl, Elizabeth Wollman
To contact the reporters on this story: Donal Griffin in New York at email@example.com; Michael J. Moore in New York at firstname.lastname@example.org
To contact the editor responsible for this story: David Scheer at email@example.com.