KANSAS CITY, Mo. – A year after orchestrating a takeover of H&R Block Inc.'s leadership, Richard Breeden told shareholders Thursday that the company's stock is up, its risks are smaller and it faces good opportunities to increase its market share in the tax preparation arena.

“This is not a declaration of victory but a simple milestone along the way,” said Breeden, who became chairman after the ousting in November of former chairman and CEO Mark Ernst. “We've repaired some of the damage of the past, but we've got a lot of work to go in the future.”

Investors embraced some of that change by approving at the company's annual meeting a slate of amendments to rules governing the company's board of directors. Those include splitting the chairman and chief executive positions, imposing a 12-year term limit to directors, reducing the amount of cash directors receive as compensation versus stock, and requiring directors to defer exercising that stock until after they've left the board.

Breeden and two loyalists were elected to the board during the 2007 annual meeting after waging a bruising proxy battle with Ernst, criticizing the company's decision to diversify into mortgage lending, securities brokering and banking, which he said hurt the company's leadership position in tax preparation.

It particularly stung as H&R Block's Option One Mortgage Corp. subsidiary was in the midst of the subprime mortgage meltdown last year, which resulted in around $2 billion in losses for the company.

Since then, the company stopped selling mortgages through Option One and sold the subsidiary's remaining assets to WL Ross & Co. H&R Block also sold its securities brokerage to Ameriprise Financial Inc. and has cut back on mortgage loans held by its H&R Block Bank.

The company's stock has risen 35 percent from last year's annual meeting. Shares were down $1.67, or 6.3 percent, to $24.83 in trading Thursday, a reaction to first-quarter losses worse than expected by analysts.

Breeden and new Chief Executive Officer Russ Smyth, who estimated the company prepares 13 percent of U.S. tax returns, said they plan to focus more on increasing that number though improved marketing and use of its retail stores and offering services to attract specific customer groups, such as Latinos and so-called “expertise” customers whose complex tax returns generate higher fees.

“If we do all those ... things on a consistent basis then we will own those clients,” said Smyth, who spent 21 years with McDonald's Corp. “The good news about brand-loyal clients is they also happen to be the most profitable clients.”

Breeden also indicated the H&R Block Bank, which some analysts have thought could also be on the chopping block because of continued exposure to mortgage loan losses, will remain with the company, especially given its sale of services to tax customers who don't have a traditional bank account.

“It's there to be a factory, if you will, to create financial products that we can offer to our tax customers,” he said.