Liberty Tax, at risk of being removed from the Nasdaq stock exchange, has hired back a board member ousted by founder John T. Hewitt late last year for $50,000 cash.
The company announced Thursday in a financial filing that Hewitt had re-appointed Thomas Herskovits to the board. Hewitt had dismissed Herskovits and another of his appointed board members last November, a few months after the board fired Hewitt from his role as CEO after an internal investigation into Hewitt’s behavior recommended he be terminated, replacing them with longtime company franchisees. Herskovits, an investment banking partner based in Chicago, is the former president and CEO of Specialty Foods and president of Kraft Dairy and Frozen Products.
The company’s outside auditor, KPMG, resigned late last year citing an “inappropriate tone at the top” as have four board members elected by shareholders, including all of the members of its audit committee. The Nasdaq Stock Exchange requires at least three independent board members (those without financial or familial connections to the company) to serve on the committee. With Herskovitz and another Hewitt appointee, G. William Minner Jr. who was paid $25,000 in cash, as well as independently elected member Ross Longfield, who has said he’ll resign after the next annual shareholder vote, the company could have its three independent members.
The cash payments to Herskovits and Minner are in addition to the usual compensation paid to the company’s non-employee board members.
Liberty Tax also announced it had expanded the number of board members from nine to 11, with six appointed by Hewitt and five elected independently by shareholders. All five independently elected board seats are vacant or will be, including Longfield’s.
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