* ISS recommends investors again reject stock-pay plan
* Stifel reduced original proposal since June 1 meeting
* ISS, Glass Lewis had opposed original bonus-stock plan
(Adds response from Stifel)
By Joseph A. Giannone
NEW YORK, June 24 Stifel Financial Corp's
(SF.N) efforts to expand a stock bonus pool may be stymied for
a second time after an influential proxy adviser recommended on
Friday that the investment bank's shareholders reject an
amended, smaller stock plan.
Stifel, announcing the results of its June 1 annual
meeting, postponed voting on a proposal to add 6 million shares
to the company's incentive-stock program. Proxy advisory firms
Institutional Shareholder Services and Glass Lewis & Co had
recommended that investors oppose the plan, citing its cost to
The St. Louis company scheduled a new vote on the proposal
for Monday and has since then met with shareholders to seek
support. On Monday the bank announced an amended plan that
reduced net additional shares by 3.38 million to about 2.63
But ISS on Friday issued a proxy alert that recommended
investors again vote down the plan, concluding it still
benefits executives at the expense of shareholders.
"As amended, the estimated shareholder value transfer of
the restated plan is approximately 57 percent, which continues
to exceed the company-specific allowable cap of 20 percent,"
Stifel spokeswoman Sarah Anderson declined to comment on
the ISS alert.
Investment banks and brokerages are unlike most public
companies, in that a large portion of their income is paid out
Bonuses paid in shares, which can be substantial, force
banks to buy back stock and contain total shares outstanding.
Proxy firms like ISS scrutinize stock plans to measure their
cost to investors and the rate at which they are paid out.
Stifel Chief Executive Ronald Kruszewski on Monday sent a
letter to shareholders seeking their support on the proposal.
An existing pool of stock, used as incentive compensation for
employees, was running low on shares, he said.
"Our equity incentive plan is both a key element in our
compensation structure and a critical tool for recruiting,
rewarding, and retaining our employees," Kruszewski wrote.
Stifel's amended plan still requests 6 million new shares,
but cancels a provision that would add 1.13 million shares in
each of the final three years of a plan expiring in 2018.
The bank has about 3.9 million shares available under an
existing plan, and estimates it could exhaust plan shares in
two years without a new authorization.
Stifel has said it had 61.9 million shares outstanding at
the end of December, on a fully-diluted basis.
Kruszewski said in his Monday letter that the shareholder
proxy firms erred when making their calculations.
Their opinions, he said, "are based solely on a formulaic
estimate that our plan's cost and our burn rate are higher than
they would like them to be."
(Reporting by Joseph A. Giannone; editing by Andre Grenon)