H&R Block Inc., after struggling to recover from tax customer losses a year ago, said it is replacing its chief executive officer.
The Kansas City-based tax preparation company said Bill Cobb will retire at the end of July and that the company’s general counsel, Tom Gerke, will succeed him in an interim role. The announcement came six years to the day after Cobb assumed the CEO title on May 16, 2011.
“Bill Cobb came out of retirement to join our board in 2010 and less than a year later stepped into the CEO role,” Block chairman Robert A. Gerard said in the announcement. “Bill led the transformation of H&R Block into a well-run company focused on our state-of-the-art tax preparation business, with a strong and committed management team, financial stability and an exciting future.”
Cobb had called the company’s tax season a year ago unacceptable and missed out on potential bonuses as a strong promotional campaign by TurboTax maker Intuit Inc. won the battle for customers.
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In the most recent tax season, which ended in April, H&R Block returned to growth for its digital tax customers but saw overall customer counts decline. The company declared victory, however, saying it had gained a greater share of the market because its total customer count declined less than the decline in overall tax filings.
In Cobb’s tenure, H&R Block had spent considerable time and resources on embracing the Affordable Care Act, which was administered through tax returns. But a significant payoff never developed for the company.
Cobb’s exit probably was his decision, said analyst Alexander Paris with Barrington Research in Chicago. The company’s recovery from two seasons ago was difficult to do in what has been a difficult industry.
“It’s been a lot tougher business for everybody involved in the last few years, a lot tougher than anybody would have guessed,” Paris said.
Shares of H&R Block fell 6.01 percent Tuesday, closing at $25.18, down $1.61 from Monday.
H&R Block said Cobb would continue to receive his pay through July and any earned bonuses prorated for this year.
Gerke will earn a $950,000 salary as the interim CEO and will be eligible for a short-term bonus of $900,000 and a long-term bonus of $2.5 million. His job is secure through July 2018, and his new pay is ensured until the end of this year or into next year if the company has not found a successor for Cobb this year.
The company said it hired Crist Kolder Associates to help with the search.
Cobb had joined Block’s executive offices after eight years with online auction site eBay. He previously worked at PepsiCo and restaurant group Yum Brands Inc., whose fast-food franchises included Taco Bell, KFC and Pizza Hut.
He moved to the Kansas City area with his wife and three sons, two of whom were in high school and the other in middle school at the time.
Block hired Cobb to succeed Alan Bennett after the company enjoyed a strong year in which it boosted its customer count after two years of declines.