Layla Zulfa
The high-stakes battle for control of Better Home & Finance Holding Co. escalated significantly on Friday as founder and former CEO Vishal Garg unveiled a slate of three director nominees he intends to add to the company’s board. Simultaneously, Better’s special committee issued a statement asserting that Garg has once again extended the deadline for his shareholder campaign and urged him to cease his consent solicitation efforts. This latest development marks a deepening of the protracted conflict that has gripped the mortgage lender since Garg’s ouster as CEO earlier this year.
Garg, who was removed from his executive leadership position by Better’s board at the beginning of August and subsequently replaced by interim CEO Daniel Lewis, is actively soliciting shareholder support to unseat Lewis and several other current directors. The targeted board members include Harit Talwar, Arnaud Massenet, Bhaskar Menon, and Prabhu Narasimhan. The deadline for shareholders to submit written consents in support of Garg’s proposals has been repeatedly pushed back, with the most recent iteration setting October 2 as the new target date. This date follows an initial deadline of September 8 and a subsequent extension to September 18, underscoring the dynamic and fluid nature of the campaign.
Previously, Garg had declared that he had secured the backing of shareholders representing 50.1% of Better’s voting power and had pledged to provide evidence of this support. However, in a separate release issued on Friday, Better countered these claims, stating that Garg has failed to present consents that demonstrate this purported level of support. The company further alleged that Garg has not exhibited significant backing from public shareholders, beyond a small cohort of long-standing allies, suggesting his claims of widespread support may be overstated.
Vishal Garg’s Nominee Slate and Strategic Vision
Vishal Garg’s proposed additions to the Better board are notable figures with extensive experience in venture capital, finance, and technology. His nominees include:
- Bing Gordon: A distinguished partner and chief product officer at the prominent venture capital firm Kleiner Perkins. Gordon also brings valuable experience as a former director at Amazon, offering insights into scaling technology-driven businesses and navigating complex corporate landscapes.
- David Heidecorn: A senior advisor to the investment firm L Catterton, Heidecorn possesses a deep understanding of financial markets and investment strategies. His prior role as a partner and chief risk officer at the firm highlights his expertise in managing financial institutions and mitigating risk.
- Steve Sarracino: Founder and partner of Activant Capital, Sarracino has a proven track record in identifying and nurturing growth-stage companies. His previous service as a director at Better provides him with direct knowledge of the company’s operations and challenges.
According to Garg’s release, these three candidates have indicated their willingness to serve on the board should his consent solicitation prove successful. However, it was also clarified that no formal agreements have yet been finalized with them, and their appointment would ultimately be contingent upon the approval of a majority of the then-current board members.
Beyond his board nominations, Garg also articulated his intentions for the company’s future leadership should his campaign succeed. He stated his commitment to initiating a search for a new permanent CEO and indicated that he would engage the executive search firm Daversa Partners to facilitate this process. This suggests a strategic approach to reconstituting the company’s executive team alongside its board.
Better’s Defense and Call to Shareholders
In response to Garg’s latest moves, Better’s special committee has intensified its efforts to rally shareholder opposition. The committee has issued a strong appeal to shareholders, urging them to revoke any previously granted consents that support Garg’s proposals. The company highlighted endorsements from two influential proxy advisory firms, Institutional Shareholder Services (ISS) and Glass Lewis, both of which have recommended that shareholders align with Better’s current board.
"Better is moving on from Mr. Garg. It is time for Mr. Garg to move on too," a statement from Better declared. The company further articulated its position by stating, "Better’s employees should not have to work under the continued distraction created by Mr. Garg pursuing his personal vendetta. And our shareholders should not have to bear the expense of a campaign that has failed to gain the support Mr. Garg repeatedly claimed he had." This framing positions Garg’s campaign as a disruptive personal vendetta rather than a legitimate attempt to improve the company.
Better characterized Garg’s campaign as both costly and disruptive, emphasizing that the company has made demonstrable progress since his departure from the CEO role. Conversely, Garg has maintained that the company requires significant board changes and that he should retain a "meaningful" role in the mortgage company he founded, underscoring his belief in his continued relevance and leadership capabilities.
The opposing factions are actively communicating with shareholders, directing them to distinct consent cards. Better is urging shareholders to sign and return its white consent revocation card, thereby withdrawing support for Garg’s initiatives. In contrast, Garg’s group is distributing a green consent card, which shareholders are encouraged to sign and return to signal their support for his proposals. This direct appeal to shareholders through dual consent mechanisms underscores the intensity of the proxy fight.
A Chronology of the Boardroom Conflict
The current contentious board battle has been unfolding for over a month, initiating shortly after Vishal Garg’s removal as CEO. This period has been marked by significant leadership upheaval within Better. Top executives, including Chad Smith, Barry Feierstein, and Leah Price, have announced their departures from the company in the wake of Garg’s exit.
Following his removal from the CEO position on August 3, Garg retained the services of attorney Alex Spiro and immediately launched a campaign aimed at regaining control of Better. This marked the beginning of the formal proxy contest that has since intensified.
Better’s board has been staunchly opposed to Garg’s efforts, citing the company’s financial performance under his leadership. The board has pointed to cumulative net losses recorded since 2022 and a significant decline in the company’s stock price – exceeding 90% during Garg’s tenure as CEO – as reasons to resist his return. This financial backdrop forms a critical part of the board’s defense against Garg’s claims of mismanagement under the current leadership.
The conflict escalated legally on August 18 when Better filed a lawsuit against Garg in the U.S. District Court for the Southern District of New York. The lawsuit alleged unlawful solicitation practices and related disclosure violations, seeking to legally impede Garg’s campaign.
Garg, however, has vigorously contested these allegations. He opposed Better’s request for a preliminary injunction and a temporary restraining order, characterizing the lawsuit as meritless. Further escalating the legal dimension, Garg filed his own lawsuit on August 25 against Daniel Lewis and six other directors. His suit accused them of improperly entrenching themselves in their positions after his removal as CEO.
A significant development occurred on August 31 when a federal judge declined to immediately halt Garg’s shareholder campaign. The judge’s decision allowed the solicitation process to continue while the broader legal dispute proceeds. Importantly, the judge did not rule on the merits of Better’s claims regarding securities law violations, stating that the company had not sufficiently demonstrated that Garg’s campaign would cause irreparable harm. This ruling provided Garg with a crucial reprieve, allowing him to press forward with his shareholder outreach.
Just a few days later, on September 2, Garg unveiled a proposed 90-day operating plan, contingent on his regaining control of Better. This plan outlined ambitious targets, including achieving $2 billion in quarterly funded volume, generating an additional $7 million in monthly revenue, and eliminating the company’s $4 million monthly cash burn. However, Better’s board swiftly dismissed this plan, labeling it "unworkable" and "conspicuously late," suggesting it lacked credibility and was an eleventh-hour attempt to sway shareholders.
Broader Implications and Market Context
The ongoing power struggle at Better Home & Finance Holding Co. has significant implications for the company’s future strategy, operational stability, and its position within the competitive mortgage and fintech landscape. The outcome of this proxy battle could reshape the company’s leadership, its financial trajectory, and its ability to execute on its business objectives.
Better, a company that gained prominence for its technology-driven approach to the mortgage process, has faced significant market headwinds. The broader housing market has experienced fluctuations, impacting mortgage origination volumes and refinancing activity. Companies within the sector are constantly navigating interest rate changes, regulatory shifts, and evolving consumer demand.
Garg’s potential return, either as CEO or through significant board influence, raises questions about the company’s strategic direction. His supporters argue that his vision and entrepreneurial drive are essential for Better’s resurgence. Conversely, his detractors, including the current board and proxy advisory firms, point to past performance issues and governance concerns as reasons to maintain the status quo or seek new leadership.
The involvement of prominent venture capital and investment firms in Garg’s proposed slate, such as Kleiner Perkins and L Catterton, suggests a continued interest from the investment community in Better’s potential. However, their participation is contingent on Garg’s success in the consent solicitation, highlighting the speculative nature of these endorsements at this stage.
The legal battles and the public relations campaign waged by both sides underscore the high stakes involved. The cost of such protracted disputes can be substantial, diverting management attention and financial resources away from core business operations. For shareholders, the conflict creates uncertainty and the need to carefully evaluate competing narratives and claims before casting their votes.
The continued departures of key executives since Garg’s removal also signal underlying challenges within the company’s culture and operational environment. Rebuilding executive talent and fostering a stable, productive work environment will be critical for any leadership team seeking to steer Better toward sustained growth and profitability.
As the October 2 deadline approaches, shareholders will be closely watching for any further developments, including potential legal rulings or new disclosures from either side. The ultimate decision will rest with the shareholders, who must weigh the arguments for change against the claims of stability and progress presented by the current board, all within the dynamic context of the U.S. housing market. The resolution of this intense corporate governance dispute will undoubtedly set a precedent for how founder-led companies navigate challenging periods of leadership transition and shareholder activism.
