Better Home & Finance Holding Company (NASDAQ: BETR) is fending off an effort by former CEO Vishal Garg to gain control of the company one week after he was stepped away from the leadership position.
In a Thursday press release, Garg (who retains a seat on the board of directors) claimed he “secured support from shareholders representing a majority of the company’s voting power for a plan to reconstitute Better’s board of directors and return the company to the turnaround strategy he led.” He demanded that all of the other directors except Michael Farello and Hugh Frater resign.
Garg also declared he would “work for $1 until Better becomes profitable” while investing $5 million of his own funds into the company. He also called for a $30 million stock buyback along with an “independent search for long-term CEO as part of plan to restore shareholder value.” Garg said he would transition to either the role of chairman or chief produce and innovation officer.
Garg added that he retained Alex Spiro, a high-profile New York City attorney, in connection with his actions.
In response, Better issued a statement saying that the board, excluding Garg, voted to terminate him as CEO “following a series of decisions and actions that raised serious concerns regarding his judgment, temperament and credibility.” No reason for an early exit was given last week when Garg’s departure was announced.
“Together with Mr. Garg’s track record—including cumulative GAAP net losses exceeding $1.5 billion since 2022 and a stock price that had declined more than 90% under his leadership—the board concluded that Mr. Garg was no longer fit to serve in an executive capacity at the company,” the statement added.
The board also suggested that Garg’s attempt to seize control may run afoul of federal laws.
“The board has reviewed communications that, based on counsel’s analysis, evidence Mr. Garg’s direct involvement in conduct that counsel believes may constitute violations of US securities laws,” the statement warned. “The board will no more waive or disregard the procedural protections and disclosure requirements imposed by the federal securities laws than it will abandon its independent business judgment regarding the leadership needs of the company.”
Garg founded Better.com as an online mortgage broker in 2014 after a frustrating experience trying to obtain a home loan. As a corporate leader, Garg generated controversy when he berated his employees as “a bunch of dumb dolphins” in a November 2020 email. Garg created more ill will in December 2021 when he fired 900 staff members in a Zoom call shortly before the year-end holidays.
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