St. Joe Shakes up Board Amid Shareholder Pressure

Monday, 28 Feb 2011 01:07 PM

 

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St. Joe, the largest landowner in Florida, said Monday its CEO and three board members have resigned amid pressure from the company's largest shareholder.

Britt Greene, who has been with St. Joe for 13 years, will step down from his president and CEO roles later this week, the company said. Michael Ainslie, John Lord and Walter Revell will resign from the board.

To replace them, St. Joe will add four new directors proposed by mutual fund Fairholme. That includes Fairholme President Bruce Berkowitz, executive Charles Fernandez, former Florida Gov. Charlie Crist and Carnival Corp. COO Howard Frank. The other three members are Hugh Durden, Thomas Fanning, and Delores Kesler.

Fairholme said it won't pursue any more changes to the board.

The remarkable turn of events comes as St. Joe, based in Jacksonville, Fla., is currently weighing its strategic options, including a possible sale, after it suffered massive losses during the real estate downturn.

Only two weeks ago, Berkowitz and Fernandez stepped down from the board after being elected to it in December. They cited disagreements with the nominating and governance process as they resigned, according to an SEC filing.

Two days later, St. Joe said it opposed Fairholme's efforts to replace the entire board, and called for Fairholme to make a buyout offer to shareholders if it wanted to take control of the company. The company also invited the mutual fund to submit any alternative business plan for consideration. It also adopted a poison pill to thwart any unwanted efforts to take control of the company.

Durden has served as chairman of the board since August 2008 and is a former executive of Wachovia Corp. Fanning is the top executive at Southern Co. Kesler has served as chairman of ATS Services Inc., a human resources company, and chairman and CEO of investment company Adium LLC since 1997.

Fairholme is not the only investor to be critical of St. Joe.

Hedge fund manager David Einhorn announced last year that he was shorting the company — essentially betting that the company would not be able to right itself — and criticized St. Joe's efforts to bring Southwest Airlines to a nearby airport by promising to cover the airline against any losses for a specified period.

The developer's stock has tumbled in the last year as it navigates out of the real estate slump and deals with land polluted by the Gulf of Mexico oil spill last summer. The company has sued Halliburton Co. and others involved in the spill over the decline in the value of 577,000 acres in Northwest Florida and in its development.

Its shares fell 48 cents, or 1.7 percent, to $27.19 in morning trading after rising as high as $28.66 earlier in the session.

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