Voce Capital Management LLC (“Voce”), which along with its nominees owns
5.3% of FBR & Co. (Nasdaq:FBRC)
("FBR" or the “Company”) and is the Company’s third-largest shareholder,
today announced that it has filed its preliminary
proxy statement and intends to proceed with its nomination of three
independent Directors for election to the Company’s Board (the “Board”)
at the 2016 Annual Meeting of shareholders. Voce also released the
following statement regarding recent developments at the Company, which
Voce believes underscore the need for urgent change at FBR:
“FBR’s first quarter 2016 earnings results vividly illustrate just how
unhinged from financial reality its strategy has become, in our view. In
1Q16 FBR’s compensation expense alone exceeded
total net revenue generated during the quarter. There can be no
clearer evidence to us that the Company’s multi-sector build-out
strategy is an unsustainable failure.
FBR’s proxy statement also reveals, in our opinion, that the Board
continues to gratuitously compensate management for lackluster
performance and to award shareholder-funded sinecures for unproductive
employees. For example, according to the Company’s recent proxy
statement, FBR’s former Chief Investment Officer has apparently been
stripped of his title recently but remains on the payroll.
Further, despite missing its 2015 compensation plan targets, and
notwithstanding an 18% drop in share price and a 34% plunge in revenue,
the Board still chose to award management discretionary year-end cash
bonuses. It is exactly this type of misalignment with shareholders that
leads us to conclude that FBR’s Board needs more independent voices.
In addition, we believe the Board’s pattern of entrenchment and lack of
transparency continues. The Company has now recommended that
shareholders vote against all three of Voce’s nominees, but has failed
to even offer to interview any of them. Furthermore, FBR has yet to
substantively respond to the 67-page white-paper that Voce published
last month. As The
New York Times wrote in a recent article regarding FBR, 'at a
time when so many people are making assertions about the future of Wall
Street, it is refreshing to see one activist investor put forward a
blueprint to return one wayward company to the roots of its former
glory.' We believe it would be refreshing to see the Company provide
shareholders with a public response to this blueprint, too.
As The Times also observed, 'FBR was once a big success, but its
glory days seemed to have faded with the departure over time of its
three founders.' This decay is exactly why we believe that change is
urgently needed to ensure FBR’s path forward benefits all shareholders
rather than simply management, whom we believe the Board continues to
unduly reward for poor performance. We believe our three
highly-qualified, independent Director nominees – Jarl Berntzen, Michael
J. McConnell and J. Daniel Plants – are the right candidates to deliver
change to FBR. With their collective mix of investment banking, finance,
strategy, capital allocation, corporate governance and operational
experience, they are ideally positioned to help lead the Board through
its next phase and help steer it towards a return to success.”
Shareholders may access Voce’s plan, entitled “FBR: Rekindling the
Spirit of Success,” at https://vocecapital.com/fbr.
About Voce Capital Management LLC
Voce Capital Management LLC is a fundamental value-oriented,
research-driven investment adviser founded in 2011 by J. Daniel Plants.
The San Francisco-based firm is 100% employee-owned.
Additional Information and Where to Find It
VOCE CATALYST PARTNERS LP, VOCE CAPITAL MANAGEMENT LLC, VOCE CAPITAL
LLC, JARL BERNTZEN, MICHAEL J. MCCONNELL AND J. DANIEL PLANTS (TOGETHER,
THE “PARTICIPANTS”) HAVE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION (THE “SEC”) ON SCHEDULE 14A ON MAY 2, 2016 A PRELIMINARY
PROXY STATEMENT AND FORM OF PROXY CARD AND INTEND TO FILE A DEFINITIVE
PROXY STATEMENT AND ACCOMPANYING FORM OF PROXY CARD TO BE USED IN
CONNECTION WITH THE PARTICIPANTS’ SOLICITATION OF PROXIES FROM THE
SHAREHOLDERS OF FBR & CO. (THE “COMPANY”) FOR USE AT THE COMPANY’S 2016
ANNUAL MEETING OF SHAREHOLDERS (THE “PROXY SOLICITATION”).
ALL SHAREHOLDERS OF THE COMPANY ARE ADVISED TO READ THE PROXY STATEMENT
AND OTHER DOCUMENTS RELATED TO THE PROXY SOLICITATION WHEN SUCH
DOCUMENTS BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION, INCLUDING ADDITIONAL INFORMATION RELATED TO THE
PARTICIPANTS. THE PRELIMINARY PROXY STATEMENT AND THE ACCOMPANYING PROXY
CARD ARE AVAILABLE, ALONG WITH OTHER RELEVANT DOCUMENTS (WHEN THEY
BECOME AVAILABLE), AT NO CHARGE ON THE SEC’S WEBSITE AT http://www.sec.gov/.
INFORMATION ABOUT THE PARTICIPANTS AND A DESCRIPTION OF THEIR DIRECT AND
INDIRECT INTERESTS BY SECURITY HOLDINGS IS CONTAINED IN ANNEX II OF
SCHEDULE 14A FILED BY THE PARTICIPANTS WITH THE SEC ON MAY 2, 2016. THIS
DOCUMENT CAN BE OBTAINED AT NO CHARGE ON THE SEC’S WEBSITE AT http://www.sec.gov/.
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