Activist Fund Breeden Partners Wins 3 Seats on H&R Block's Board

H&R Block said in a press release Thursday that based on preliminary results from the company's shareholder meeting, three nominees from former SEC chairman Richard Breeden's investment fund have been elected to H&R Block's board of directors. The Breeden Fund, which has been accumulating shares of H&R Block since November and now holds a 1.8% stake, estimates its nominees won 82% of the vote. Five proxy advisers supported the Breeden Fund nominees, including 6.6% owner (third-largest) Harris Associates LP and California Public Employees' Retirement System. Before the vote was announced Richard Breeden told shareholders, "The tidal wave proportions of the election results convey the strongest possible message that share owners want a change in the company's performance and direction. This, we believe, is the dawn of a new era for H&R Block." Breeden wants H&R Block to focus on its core tax business and exit the securities-brokerage and banking and lending businesses. Breeden is also advocating separating the position of chairman and CEO, which incumbent Mark Ernst has held since 2002. Shares of H&R Block fell 0.9% to $19.99 on Thursday.

Sources: Press release, Associated Press, MarketWatch
Commentary: H&R Block Is Speeding Towards a Brick Wall • H&R Block Q1 Loss Widens on Mortgage Woes • H&R Block Taps Credit Lines
Stocks/ETFs to watch: HRB. Competitors: INTU, JTX
Related: CNBC video discussion with activist investor Richard Breeden

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