5% outside holder, in an SEC filing, accuses the 2 Compensation Committee members of "fleecing P&F's outside shareholder base," by corruptly and manipulatively backdating an unjustified pay raise for CEO Richard Horowitz.
Also announces intention to vote to WITHHOLD Scheriff and Director Mitchell A. Solomon, at the Company's upcoming May 21, 2014 annual meeting.
LAPORTE, Ind., May 5, 2014 (GLOBE NEWSWIRE) -- Timothy Stabosz, a 5.0% holder of P&F Industries (Nasdaq:PFIN), today announced his demand that Directors Kenneth M. Scheriff and Jeffrey R. Franklin immediately resign from the P&F board. Scheriff, the compensation committee chair, is the Executive Vice President of New York Commercial Bank, a subsidiary of NYSE listed New York Community Bancorp, Inc. Franklin, a C.P.A., is the CFO of New York based Executive Charge, Inc.
Stabosz made his demand in a formal letter to the 2 directors, filed on Schedule 13D/A with the SEC, on April 29, 2014. The letter can be accessed at the following web link:
http://www.sec.gov/Archives/edgar/data/75340/000116289314000002/scheriff.txt
Stabosz's main Schedule 13D/A filing can be accessed at the following web link:
http://www.sec.gov/Archives/edgar/data/75340/000116289314000002/PF13D17.TXT
In the letter, in reference to P&F's 8-K filing dated April 3, 2014, Stabosz accuses the 2 compensation committee members of succumbing to pressure from the CEO, as a result of an unanticipated "bonus shortfall" the CEO suffered in 2013, and, in a brazen act of flim-flam, corruptly "making up" the shortfall by increasing the CEO's 2014 base pay, and bonus percentages, RETROACTIVE to the beginning of 2014, despite the fact that the CEO's employment contract called for no such increase.
Stabosz also assailed the fact that, over the last decade, the CEO has taken out a total of roughly $15 million in compensation from the company (under Scheriff and Franklin's watch as board members)...even though shareholders' equity has only increased by $1.7 million in aggregate, over that entire 10 year period.
Stabosz, commenting on Scheriff and Franklin's actions, stated, "These unprincipled men, fiduciarily compromised as they are, 'rent' their names, as banker and CFO, respectively, to P&F's CEO Richard Horowitz, corruptly giving a sham aura of legitimacy to unscrupulous and contrived pay regimes that are licentious, morally larcenous, and, to any fairminded person, smack of blatant self-dealing on the part of the CEO. Respected outside observers, including proxy advisory services, and corporate governance experts, have repeatedly emphasized that P&F's CEO is paid a MULTIPLE of peer norms. Why would a banker and a CFO, whose professions depend upon trust, be willing to sit as 'shills' and debased henchmen on Horowitz's board, and Horowitz's compensation committee, attaching their names to something that is so foul and egregious, on its face, standing by as Horowitz 'sucks the life' out of P&F?"
Stabosz continued, "I would strongly urge all P&F shareholders, and members of the corporate governance community, to read my letter to the P&F compensation committee, which I believe reveals Messrs. Scheriff and Franklin to have summarily jettisoned the critical MORAL aspect of being a fiduciary. Instead, they exist solely for the purpose of providing Mr. Horowitz with compensation that is as high as possible, subjecting themselves to the CEO's will, and, through artifice and effrontery, providing a sick form of 'cover' for Mr. Horowitz, who rules the board with an iron fist. Based upon the weight of the evidence, I believe the conclusion to any honest witness is inescapable: Scheriff and Franklin are engaged in a functional conspiracy with Richard Horowitz. They have no self respect, are fundamentally dishonorable, and have abjectly abandoned the outside shareholder base of P&F," Stabosz ruefully remarked.
Finally, Stabosz announced his voting intentions for the upcoming annual meeting, to be held on May 21, 2014. "It is my belief that 4 out of 6 of the current board members exist exclusively for the purpose of serving Richard Horowitz's desires. Therefore, I intend to vote to WITHHOLD both of the company's director nominees, Kenneth M. Scheriff and Mitchell A. Solomon. (Solomon is a close personal friend and 'golfing pal' of the CEO.) I also intend to vote AGAINST Proposal #3, the proposal to approve the company's pay for its named executive officers," Stabosz concluded.
Timothy Stabosz is a private investor specializing in contrarian, "deep value," low-priced, Graham-and-Dodd style, microcap company stock investing.