With profits falling and the company’s share price at an all-time low, LoanDepot founder Anthony Hsieh is handing off his CEO duties to industry veteran Frank Martell, who most recently served as CEO of mortgage data and tech provider CoreLogic.
Hsieh, who will continue to serve as LoanDepot’s executive chairman, said that having taken the company public last year, it’s “the right time for me to take an even more holistic strategic role.”
Like many mortgage lenders, LoanDepot has seen profits wane as rising mortgage rates take a toll on the highly profitable business of refinancing loans, and competition for homebuyers taking out purchase loans heats up. Last year loanDepot originated more loans than ever — $137 billion — but profits fell to $623 million, down from $2 billion in 2020.
“Across the industry, things are again changing, but in that, I see opportunity for LoanDepot to continue to grow, add additional products and services and to gain additional market share,” Hsieh said in a statement. “But, to do this, we must accelerate and recognize that, as the market contracts and consolidates, we must further digitize and provide an expanded product set and experience that meets the needs of our customers no matter where they are in their home buying and selling journey.”
With more than 30 years of executive leadership experience at companies including General Electric, AC Nielsen Corp. and Information Services Group, Martell “has a proven track record of delivering scaled market leadership and growth in revenues and profitability in the residential real estate and other industry verticals resulting in significant stakeholder value creation,” LoanDepot said in a press release.
Shares in LoanDepot, which have traded for as much as $21.75 in the last year, closed down by nearly 10 percent after Tuesday’s announcement of the leadership shakeup, touching a new low of $3.06 on a day when many stocks were falling on uncertainty about the war in Ukraine and measures being undertaken by central banks to fight inflation.
Martell, who will also take a seat on LoanDepot’s board and serve in the newly created role of president, joined CoreLogic as CFO in 2011. He was quickly promoted to COO before being named CEO in March 2017. He stepped down from that position in January, six months after CoreLogic was acquired for $5.9 billion by Stone Point Capital and Insight Partners.
In a statement, Martell said he was thrilled to be joining a company “that is a nimble and innovative market leader poised to capitalize on the significant opportunities that lie ahead of us.”
LoanDepot, he said, is in a “great position to deliver incredible value to our customers, employees and shareholders,” thanks to its “talented team, proprietary technology and scaled leading solutions across an intentionally diverse mix of channels.”
As president and CEO, Martell will oversee daily operations and lead the company’s mortgage and mello business units. The newly created mello operating unit houses the company’s ancillary product and service groups, including mellohome, melloinsurance and mellotitle.
In a bid to expand LoanDepot’s business beyond mortgages and create “customers for life,” last month LoanDepot hired Zeenat Sidi, a veteran of SoFi, Capital One and RBC, to serve as president and chief operating officer of mello.
In addition to serving as executive chairman of LoanDepot’s board, Hsieh said he intends to remain the company’s largest shareholder.
In a regulatory filing, LoanDepot said Martell will earn an initial base salary of $800,000 a year and be eligible to receive an annual bonus of up to 225 percent of his base salary. Martell will also receive 1 million shares of LoanDepot class A common stock over four years, and stands to receive another 3 million shares over five years if he meets performance targets. Starting next year, Martell will be eligible to receive up to $4.4 million a year in company shares based on his and LoanDepot’s performance.
Hsieh’s employment will be on an “at-will basis,” the company said, earning an initial base salary of $850,000 for the remainder of 2022 and $350,000 after that. He’ll also be eligible to receive an annual bonus of up to 250 percent of his base salary in 2022.