BKF Capital Group Inc. announced an agreement with CEO John A. Levin that provides for a continuing relationship between Mr. Levin and the NYSE-listed asset management firm after a new CEO is installed by Oct. 1. Despite months of bitter wrangling between Mr. Levin and hedge fund shareholders of BKF stock, who complained the CEO was overpaid for delivering profitability that paled in comparison with other listed money managers, the new agreement stopped far short of severing their relationship.
Under the agreement, Mr. Levin will serve as both chairman emeritus and as a consultant to the company. In addition, Mr. Levin will be involved in a new investment management venture in which BKF will have "an economic interest," according to the announcement. Under the agreement, Mr. Levin can solicit certain BKF clients who account for roughly $2.5 billion of the firm's $12.4 billion in assets under management and hire a "limited number of the firm's employees" involved in managing and administering those clients, while continuing to occupy space at BKF's headquarters. Mr. Levin will be subject to non-solicitation provisions of 15 months to three years for all other clients and employees. Mr. Levin will also invest $5 million for at least one year following his departure, to be managed by BKF's long-only team.
BKF has hired an executive search firm to find a successor for Mr. Levin and "hopes to finalize the selection" in the near future. Neither Mr. Levin nor BKF General Counsel Norris Nissim were immediately available to comment. BKF's share price ended the day at $34.51, up 3.6%, on a day when the Dow Jones industrial average dropped 0.8%.