Liberty Tax said Wednesday its board terminated founder John Hewitt as the tax preparation chain’s CEO on Tuesday.
Hewitt will remain chairman of the board, however, as he is the only holder of Liberty’s Class B shares. The company has been negotiating to repurchase his shares, which allow him to appoint a majority of the board members. Hewitt has an extensive history in the tax preparation industry. He founded Liberty Tax Service in 1998 after co-founding Jackson Hewitt in 1988, which was sold in 1997 for $483 million to Cendant. Before co-founding Jackson Hewitt, he was a regional director at H&R Block, in charge of more than 250 offices.
Liberty was forced to close down dozens of its offices last year due to tax fraud and set up a compliance group to more closely scrutinize its franchisees (see Liberty Tax shuts down more offices and After troubled season, Liberty forms compliance group). The Virginia Beach, Va.-based company reported a 33 percent decline in net income for fiscal year 2017 in June. Hewitt admitted at the time that the results were “clearly disappointing.”
“In addition to the reduction in overall store and return counts, we saw significant underperformance in our company-owned locations,” he said in a statement in June. “We are carefully evaluating changes to our operations to enable us to return to our past pattern of growth in market share, revenue and earnings.”
Liberty’s chief operating officer, Ed Brunot, who joined the company in May, will eventually assume the role of CEO as part of a succession plan. Brunot was brought to Liberty from SpartanNash’s MDV division, a distributor of grocery products to military commissaries. He was formerly a U.S. Army captain who was awarded the Bronze Star, and Hewitt expressed hope at the time that he would help turn around the company and its franchisees.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access