H&R Block ended an eight-month search to fill its president and chief executive posts as the tax-prep giant, headquartered here, appointed former McDonald’s Corp. executive Russ Smyth to those positions.Smyth, who formerly served as president of McDonald’s Europe, succeeds Alan Bennett, who has served as interim CEO since November 2007. Smyth was scheduled to assume the Block helm August 1.
Block’s former chairman and CEO, Mark Ernst, resigned last November after the company incurred losses of roughly $737 million — largely from its troubled Option One mortgage-lending business, a division that Block divested in March. An earlier agreement to sell the hemorrhaging unit to Cerberus Capital Management had fallen through as a result of the collapse of the subprime mortgage market.
Ernst was succeeded as chair by Richard Breeden, a former Securities and Exchange Commission chair and Block investor who spearheaded a heated proxy battle to install a group of dissident shareholders on the Block board.
Breeden, whose investment fund, Breeden Capital Management, started buying shares in Block last year, was elected to the board in September, along with two associates. Breeden had argued that the company should focus on its traditional tax-prep business instead of mortgages and banking. Breeden then appointed Bennett, a former CFO at health insurance carrier Aetna, as interim CEO. Breeden remains as chairman.
Smyth, meanwhile, had a 21-year career with the fast food giant, including 13 years in financial accounting and controller positions. He worked as McDonald’s European controller in London before returning to the U.S. as international controller.
“Russ has excellent experience working with a powerful brand and delivering consistently high-quality performance across a vast retail network,” said Breeden in a statement.
In July, Block posted its first profitable quarter since 2006. Fourth-quarter net income was $543.6 million, compared to a loss of $85.6 million for the year-ago fourth quarter. Its 2008 revenues rose 10 percent to $4.4 billion, which the company attributed to growth in its tax services business and the sale of Option One.
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