After a two-month dispute over the company’s leadership and direction, Vishal Garg, founder of Better Home & Finance Holding Co., announced Monday that shareholders had backed his effort to remove five directors from the company’s board after an independent election inspector certified their votes.
The final certification showed that shareholders representing 52.02% of Better’s outstanding voting power supported removing Chairman Harit Talwar, interim CEO Daniel Lewis, and directors Arnaud Massenet, Bhaskar Menon and Prabhu Narasimhan, according to a press release issued by Garg and The Garg Group, a coalition of investors.
The news comes on the same day that Better announced that it would not challenge Garg’s consent solicitation to remove the directors and return him to a leadership role.
“In the last decade, only 1.7% of corporate proxy disputes seeking to replace the Board of a public company succeeded. Overcoming 50-to-1 odds to replace a public company board is a tremendous vote of confidence from our shareholders,” Garg said in a statement.
“We recognize the significant work ahead to execute on Better 2.0, and we are committed to rebuilding trust through transparency, execution and clear results for our next 90 days ahead and beyond.”
The board has been reduced from nine seats to five. Garg, who remains the sole incumbent director, appointed Bing Gordon, Steven Sarracino and two current Better employees, who were unnamed, to fill the other four seats.
Gordon, a co-founder of Electronic Arts and a former Amazon director and senior product adviser, has experience in consumer technology and digital platforms. He is also chief product officer and an adviser at venture capital firm Kleiner Perkins.
Sarracino is founder of Activant Capital and a former Better investor and director. The firm has invested in technology companies and managed a $1.45 billion venture fund, according to the statement.
The reconstituted board is also taking steps to remove Better’s stockholder rights plan, commonly known as a poison pill, and to dismiss the company’s pending litigation against Garg in the U.S. District Court for the Southern District of New York, according to the release.
The release also said that Better’s board has identified a candidate for interim CEO and is working to finalize the person’s engagement, according to the company. Better plans to announce the appointment after the necessary documentation is completed.
Garg was removed as Better’s CEO in early August and was replaced on an interim basis by Lewis. Garg subsequently launched a campaign to replace members of the board and retained attorney Alex Spiro of Quinn Emanuel.
“No public CEO has ever been pushed out, litigated the issue, and won his way back in two months. Vishal Garg has been vindicated,” Spiro said in the statement.
Garg’s previously announced 90-day plan calls for improving operational efficiency, expanding the company’s Tinman artificial intelligence platform and home equity lending business, selling non-core assets and returning capital to shareholders. Under that plan, Garg proposed that he would serve as head of product, platform and innovation while searching for a new CEO.
Garg’s plan would raise annual cost savings targets from $45 million to $60 million, hire an advisory firm to streamline operations, finalize Tinman partnerships and expand Better’s HELOC business. The Garg Group also is seeking approval for a $30 million stock buyback.
“We are grateful to the shareholders who supported this effort,” Garg said. “Our focus now is on building Better 2.0 in a better, stronger way than ever before and to create lasting value for shareholders and serve our customers, employees and partners.”
