Split Verdict at CFS

CFS Bancorp Inc., the Indiana-based holding company that operates Citizens Financial, held its annual meeting on April 27.

CFS stockholders re-elected the current chairman and chief executive officer, Thomas F. Prisby. But they also rewarded the dissidents, electing John Palmer, managing member of PL Capital LLC, to its Board of Directors.

Follow this link for my pre-meeting discussion of the issues.

Shareholders also ratified the appointment of BKD, LLP as the Company's independent public accounting firm for the fiscal year ending December 31, 2010.

"We congratulate Tom Prisby on his reelection, and look forward to working with John Palmer to continue our efforts to further the interests of all shareholders," said Gregory W. Blaine, lead independent director of CFS Bancorp, Inc. "Despite the economic headwinds we continue to face, we believe we are on the right path to enhancing shareholder value over the long term and remain committed to executing our Strategic Growth and Diversification Plan."

And follow this link to get an inkling of an earlier adventure of Mr. Palmer's, in the same field, the exciting world of bank equity.

Speaking of bank equity, and since good links should come in threes, here's an update on Basel capital requirements.

CFS Bancorp Meeting, April 27

CFS Bancorp, the Indiana-based holding company that operates Citizens Financial, holds its annual shareholder meeting in less than a week.

A proxy contest is underway, because PL Capital Group, which owns 9.9% of the common stock, wants to put John Palmer on the board.

The company has received some assistance of late, because Glass Lewis has recommended a vote in favor of the election of the board's nominees. Glass Lewis says "we are not convinced that the Dissident should be elected to the CFS Board."

Glass, Lewis & Co. serves institutional investors that collectively manage more than $17 trillion in assets, and conducts research focused on the long-term financial impact of investment and proxy decisions. In its report, Glass, Lewis, speaking to one of the contested issues behind the proxy fight, said that it considers the retention bonuses paid by issuer to be appropriate, "given the company's reasonable pay-for-performance and the cancellation of cash bonuses despite [named executive officers] meeting portions of their individual performance objectives."

One of the issues here involves the charge of nepotism. The chairman of CFS is Thomas Prisby. The company employs two of his children -- Michael and Sandra Prisby. But Glass Lewis writes soothingly, "we do not feel that the Dissident's intent to eliminate all related party transactions, including the employment of Michael and Sandy Prisby are in the best interests of shareholders in this case."

Another proxy advisory group has taken the opposite side. Proxy Governance has written, “Given the other significant issues the dissidents have raised about the board’s attention to important governance details – the structure of certain bonus programs even as shareholder value plummeted, and the board’s acceptance of unnecessary related party transactions with the CEO’s direct family members – we believe shareholders will be best served by electing the dissident nominee, J. Palmer.”