In the latest development at the sleepy Florida landowner, Florida’s former governor has been nominated to join St. Joe’s Board.
The news is still swirling around St. Joe Company. Yesterday, investor Bruce Berkowitz announced that he and his partner Charlie Fernandez were stepping down as St. Joe directors after serving for little more than a month. It appears as though Berkowitz was defeated by the board in his attempt to become chairman and shake things up at the $2 billion Florida landowner.
What that means is still unclear, but all signs point to a proxy fight. Berkowitz’s firm Fairholme Capital owns nearly 30% of St. Joe’s (JOE) shares, and six other institutional shareholders including BlackRock (BLK) control another 40%. Now that he’s relinquished his role as a director, Berkowitz can nominate a slate of his own directors and put them to a shareholder vote in as little as 45 days from now.
Among the most interesting of his proposed directors: former Florida governor Charlie Crist. Crist, a longtime acquaintance of Berkowitz’s partner Charlie Fernandez, lost his bid for a U.S. Senate seat in November and has since worked at a private law firm in Florida.
Fortune caught up with the former governor Tuesday afternoon. He talked about how he got involved with Fairholme, why he wants to be part of St. Joe, and what he’s doing after a life in politics. Below are edited excerpts:
The news that you were being put forward as a potential St. Joe director was a head-scratcher for a lot of people. How did it come to be?
Charlie (Fernandez) has been an acquaintance for quite some time, and I’ve recently gotten to know Bruce (Berkowitz) better. And through the relationship with them I can see they’ve developed an appreciation of what a governor of the state the size of Florida has to undertake: for example, a $70 billion-plus budget. Plus my previous experience as Florida Attorney General heading up investigations, handling consumer affairs, making sure people were treated fairly. It’s not too different from making sure shareholders are treated fairly.
What have you discussed with Bruce and Charlie about JOE?
The primary concern, and this is really the crux of it, deals with executive compensation. This is a company that is steeped in Florida history. I can remember hearing about it back in high school. The concern that they and I have is how the executive compensation has been handled, particularly in light of the performance of late. I’m sure you saw the statement that Bruce put out yesterday, very concerned about pay based on performance, that the shareholder’s interests are protected, that the company is run efficiently and effectively. You realize that $21 million has been paid to the (St. Joe) CEO (Britt Greene) in the past three years in different forms, yet the company’s lost over $300 million during that period? Something doesn’t jibe.
You met with Berkowitz and Fernandez last week?
Yes, we had good discussions about what’s happening with the company and the possibilities for future success with St. Joe. If the management is well motivated, and if you have a board of directors that shares the concerns we have— that is that executive compensation needs to be reasonable, the expenditures need to be reduced, that the company needs to be run in a more efficient fashion—then the future success for this great Florida company can be extraordinary.
Did they reference any particular changes they wanted to see at St. Joe, related to joint ventures, mergers or acquisitions?
Not at this stage.
Why do you would want to go onto the St. Joe board? You’re just getting involved in private practice after serving as governor for four years. Why is this of interest to you?
It goes back to the history of the company itself, and the friendship with Charlie and now Bruce. These are very good people in my estimation. I think the world of them and their integrity. And their motivations, particularly as it relates to St. Joe.
When Bruce suggested he was interested in chairman spot on the board, he announced he was not going to accept compensation as a board member until the company turned profitable. Have you had discussions with Bruce or Charlie about compensation if you were to serve on the board?
Nothing specific at this time, no.
In the meantime, what projects are you working on?
I’m at the law firm of Morgan & Morgan, working in area of mass torts, client development, as well as marketing aspects of the firm and enjoy it very much. In addition, I’m a distinguished professorial lecturer in Stetson University College of law.
Thanks for your time. It will be interesting to watch your nomination.
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