Fairholme Capital Management founder Bruce Berkowitz’s bid to replace the board of directors of Florida landowner St. Joe Co. ended Monday with the ouster of the company’s CEO and three other directors.
The Fairholme Fund - a mutual fund and St. Joe’s largest shareholder - also got to name four new board members, including Berkowitz, and agreed not to pursue any more changes to the board.
The high drama sees a shake up of epic narrative. I honestly could not have writen an ending such as this:
St. Joe President and CEO Britt Greene, who has been with the company for 13 years, resigned his seat on the board Monday. He will step down as president and CEO later this week, the company said.
Also due to resign this week are directors Michael Ainslie, John Lord and Walter Revell.
In addition to Berkowitz, Fairholme named three other new directors: Fairholme Capital Management President Charles Fernandez, former Florida Gov. Charlie Crist and Carnival Corp. Chief Operating Officer Howard Frank.
Surviving the board shakeup were Hugh Durden, Thomas Fanning and Delores Kesler.
So if my math adds up, Berkowitz will become chairman of St Joe. What that means in the short and long term, is yet unknown. Sure St. Joe has lost money and stock because of the real estate slump. I would bet you good odds that there is something wrong if St. Joe didn't take a slight tumble during this time.
However my biggest thing in all of this is Berkowitz's very naked power-play and Charlie Crist's involvement. I would call Berkowitz's tactics unnecessary and with overt hostility. Not a fun way to start your tenure as chairman of the board. I also have questions about why Charlie Crist was brought in on this board. Was he brought in for his face and name or was it his technical/busuness skills?
If I was also a voting share-holder, I'd be upset at not being able to vote on this new board. I don't know their by-laws, but with such a shake-up, wouldn't this need a vote?
Many questions, so few answers. Again, I am not a share-holder nor am I an employee of St. Joe. I have no skin in this game, other than I am a Florida resident who is worried about the dealings of one of Florida's biggest companies.