In New York story headlined "Stifel postpones vote on
stock-based bonus pool" published on June 7, the sixth
paragraph should have said the firm is asking for approval of 6
million new shares, not 20.6 million. Correction also removes
bullet-point about 20.6 million shares.
* Stifel postpones shareholder vote on stock pay plan
* CEO Kruszewski speaking to firm's top shareholders
By Joseph A. Giannone
NEW YORK, June 7 Stifel Financial Corp (SF.N)
has postponed a shareholder vote to authorize new stock for
employee bonuses, possibly signaling a lack of support from
The St. Louis-based company, one of the best-performing
financial services stock of the past decade, adjourned its
otherwise routine June 1 annual meeting until June 27 "to
permit additional time to solicit stockholder votes," according
to a regulatory filing.
Stifel investor relations head Sarah Anderson declined to
discuss the number of shares submitted in favor of the proposal
or reasons for tabling the vote.
"We're meeting later this month to provide more time to
solicit more votes," she said, adding that Stifel Chief
Executive Ronald Kruszewski is communicating with top
shareholders about the matter.
Shareholders at the annual meeting overwhelmingly approved
all of Stifel's other management proposals, including the
election of directors, 2010 executive pay and the appointment
of an auditor.
EXPANDING AND DILUTING
Stifel is seeking to replenish its nearly depleted reserve
of bonus-plan shares with 6 million new shares to satisfy a
rapidly growing workforce. Since last amending its stock-pay
plan in 2008, the company's employee ranks have grown by nearly
The company last year purchased investment bank Thomas
Weisel Partners. Its count of financial advisers ballooned from
644 in 2005 to nearly 2,000 at the end of the first quarter,
reflecting its 2009 acquisition of 56 brokerage offices from
UBS UBSN.VX and its 2007 purchase of New Jersey broker-dealer
Ryan Beck & Co.
The company said in its April 18 proxy statement it would
issue the shares as stock appreciation rights, restricted stock
or options "to attract, incent and retain the company's
employees" and management and as currency for future
acquisitions. As of April 6, Stifel had 3.8 million shares
available in its current stock-bonus plan, with none left for
issuance under automatic provisions of the plan.
Though many investment banks use treasury shares as
retention and recruiting tools, shareholders sometimes object
to the dilutive effect of releasing the shares.
Stifel's proposed incentive stock plan represents 38
percent of its 53.7 million shares outstanding on April 30, and
at Monday's closing price would have a value of $2 billion.
Many of Stifel's biggest shareholders, including BlackRock,
Vanguard Group, Wellington Management Co. and T. Rowe Price
Associates, routinely decline to comment on their holdings as a
matter of policy. Representatives of other large shareholders,
including Rainier Investment Management, Sentinel Asset
Management and The Banc Funds Co LLC, did not return calls
Kruszewski, who received a $3 million cash bonus in 2010
and $1.2 million in stock awards as part of a $4.48 million
compensation package, has since 2001 presided over one of the
top-performing financial services companies.
Stifel produced record revenue in each of the past 15 years
and has noted in presentations that its shares as of April 2010
had outperformed its peer group over the previous three-, five-
and ten-year periods. This year, however, the stock is down 9.4
percent, lagging many rivals as well as the benchmark S&P 500
Index's 3 percent rise.
KBW research analyst Joel Jeffrey on Monday raised his
rating on Stifel to "outperform," saying the stock has room to
run and is trading at a discount to its usual valuations. He
also reduced his price target by $2 to $47, citing a weaker
Shares of Stifel early Tuesday afternoon were up 32 cents,
or .86 percent, at $37.52.
(Reporting by Joseph A. Giannone;editing by Jed Horowitz)