Why Is Bruce Berkowitz Resigning From St. Joe?

Bruce Berkowitz is resigning from the St. Joe Company board this morning, as witnessed in this 13-D filing.

In an email  disclosed in the filing, Berkowitz writes:

Directors of St. Joe:

The two of us have discussed the situation at St. Joe and its nominating and governance process. We will not stand for re-election except as part of a Board where a majority of the directors are committed to shareholder value, pay for performance, and effective corporate governance.

After working with the current Board over these past weeks, we have concluded that the current Board is not in a position to propose such a slate of directors.

Accordingly, we withdraw our names from consideration by the Nominating and Governance Committee for election at the Annual General Meeting, and we resign from the Board of St. Joe effective immediately.

Bruce & Charlie

There was selling that was going on last week that after the company announced it was seeking strategic alternatives. It was extremely perplexing at the time. Whenever a company announces it’s seeking strategic alternatives, the company’s stock generally keeps that move, give or take a few percentage points. It doesn’t evaporate the whole move and slide into the negative. It never happens. That was a huge red flag right there. There was selling pressure all day and the day after. It didn’t seem right.

Perhaps someone caught wind that Bruce was resigning from the board after discussing the situation with the board. There was no logical explanation for the selling and now we have a reason why.

It will be interesting to see Berkowitzs’ latest filing to see if he has significantly reduced his stake in the company, especially following these latest developments, or if the position is increased.

Update: Bloomberg TV is reporting that Berkowitz had “governance issues” with the St. Joe board, and he was is concerned that too much money is being paid to St. Joe executives.

— Roger Nachman

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