Archive for Wednesday, November 21, 2007

Breeden to replace Ernst as chairman

New leader headed group of shareholders that won three seats on board

November 21, 2007

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— H&R Block Inc. said Tuesday that Mark Ernst had resigned as chairman, president and chief executive of the tax preparation and accounting services company.

He is being replaced as chairman by former Securities and Exchange Commission boss Richard Breeden, who led a dissident shareholder group that won three seats on the company's board.

Former Aetna Inc. executive Alan Bennett was named interim CEO while H&R Block looks for a permanent replacement to take the CEO role.

H&R Block shares closed Tuesday at $19.32, up 25 cents, on the New York Stock Exchange.

Breeden has criticized the company's diversification into mortgage lending, investment advising and banking, saying it had robbed momentum from the company's core tax preparation and accounting services business.

H&R Block has been restructuring in an effort to survive the collapse of the mortgage markets caused by rising interest rates and falling home prices.

It has been hurt by rising loan defaults at its subprime mortgage lending unit, Option One Mortgage Corp. Subprime loans are made to customers with poor credit histories.

In September, investors replaced three members on H&R Block's board of directors with Breeden and two of his appointees.

Ernst led the company's proxy fight with Breeden over the new board members.

Ernst took over as CEO in January 2001 and was elected chairman in September 2002. He joined H&R Block in 1998 and was first elected to the board in 1999 when he was appointed president.

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