Last family member to leave H&R Block board

Tom Bloch, son of one of the co-founders of H&R Block and the last family member to serve as the company’s CEO, is leaving its board when his term expires Sept. 30,

McClatchy Newspapers reported.

No members of the founding family will remain on the board or in top management.

In a “blistering letter” to the board, the article said, Bloch

said he had become increasingly concerned about the “intense pressure” from shareholders for short-term gains and was increasingly in disagreement with the company’s chairman, Richard Breeden. Bloch’s letter expressed concern over price increases for the company’s tax services and its “weakened competitiveness” in the online tax preparation market. He also lamented an “ill-timed” stock buyback program and the “staggering” loss of 2 million customers in two years.

The company’s CEO, Russ Smyth, had resigned “abruptly” the week before, and the company also recently lost its general counsel and CFO, the report noted.

Bloch noted in his letter that the [company’s] stock, which is down 35 percent this year, was one of the worst 2010 performers in the S&P 500.

Bloch, who spent 19 years with the company, became president in 1989 and CEO in 1992, the article said. He resigned in 1995 to pursue a teaching career. In 2000, the year he joined the H&R Block board, he became president of the board of University Academy, a Kansas City charter school he co-founded.

Bloch’s father, Henry Bloch, told McClatchy Newspapers he planned to vote against keeping Breeden on the board.

Tom Bloch’s letter to the board said the compensation of the new CEO, Alan Bennett, was overly generous and the company’s 2010 financial plan is overly optimistic, according to the report.

… Bloch and Breeden have had differences on fundamental issues. Those include the price increases for tax preparation services, which Bloch said had outstripped inflation and had become a serious impediment to the tax offices’ long-term success. he said the board should not tolerate plans that cause more erosion in market share and should not pursue short-term objectives that could hurt the company’s long-term value.

(Source: McClatchy Newspapers, July 16, 2010.)