This article, published by Institutional Investor in their January 13, 2012 online edition, highlights a notable achievement resulting from the active ownership of Lawndale Capital Management and other shareowners of P&F Industries (O-PFIN). We are proud that the CEO of Lawndale Capital Management, Andrew, Shapiro, is an active contributor to ValueWalk. His articles and bio can be found here.
Below is a brief excerpt followed by a link the the full article:
An independent investor has succeeded in getting a company’s compensation committee to chop the CEO’s salary by a third, a move seen as unprecedented.
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Recently disclosed action by Lawndale Capital Management of Mill Valley, California led the board to reduce the annual base compensation of Richard A. Horowitz, chairman, CEO and president of P&F Industries — a Melville, New York–based $12 million market cap tool and hardware manufacturer — from $975,000 to $650,000.
“This is the first time I’ve ever seen a shareholder action reduce compensation on an incumbent CEO,” says Paul Hodgson, senior research associate in charge of executive pay research for GMI, a company that issues governance ratings on public companies.
Lawndale first began lobbying for a pay cut for Horowitz last May, when it filed a form 13D with the Securities and Exchange Commission. Its president, Andrew Shapiro, who holds 9.95% of P&F, sent a letter to the P&F board calling for “a reduction or elimination of egregious compensation terms,” in any new contract, in particular Horowitz’s guaranteed base compensation. His existing agreement was set to expire on December 31, 2011.
Full article here-