A proxy advisory service is supporting a Northeastern insurer’s efforts to keep a former chief executive officer from replacing the company’s board.
The firm, Glass Lewis & Company, New York, recommends that shareholders of Presidential Life Corp., Nyack, N.Y., reject a proposal by Herbert Kurz, the company’s former president and CEO, that calls for replacing the current board with his own slate of directors. Kurz, age 89, is trying to regain control of the company.
“The new management team, including a new CEO, a new [chief financial officer] and five new board members since April 2008, should be given adequate time to implement the strategic plan unanimously approved by the board, including Mr. Kurz, in November 2008,” Glass Lewis concludes.
William Trust Jr., Presidential Life’s lead independent director, has welcomed the Glass Lewis recommendation.
“We are gratified by Glass Lewis’s recommendation supporting the board and our new management team,” Trust says. “Mr. Kurz’s attempt to overturn the company’s carefully considered succession plan so he can return as CEO at the age of 89 is a clear case of somebody who doesn’t know when to let go of the reins.”
In a letter to shareholders, dated December 22, Trust argues that Kurz’s return would cause “irreparable harm” and “seriously disrupt” the progress the company has made since Kurz relinquished his position as CEO in May.
Trust adds in the letter that Kurz no longer has the “physical or mental stamina” needed to manage and grow the insurer.
Earlier this month, Presidential Life alleged in documents filed with the U.S. Securities and Exchange Commission that Kurz had made questionable use of the assets of the Kurz Family Foundation Ltd., New City, N.Y.
The foundation’s 2008 tax return shows that Kurz claimed to have spent 40 hours a week performing his duties as a director of the foundation while he was still receiving more than $500,000 in annual compensation from Presidential Life for serving as the company’s CEO, Trust says.
The charitable foundation owns about 21% of Presidential Life.
In a letter sent to Presidential Life shareholders Dec. 18, Kurz said the Presidential Life board had used a “diversionary tactic” to defeat his leadership bid when it made earlier criticisms of the foundation’s tax returns.
Kurz could not immediately be reached for additional comment.