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LoanDepot founder Anthony Hsieh is getting his wish to seat real estate veteran Steve Ozonian on the struggling lender’s board of directors, as part of an agreement that ends a proxy fight that broke out in February after Hsieh was ousted as the company’s executive chairman.
Currently the CEO of title insurance and settlement services provider Williston Financial Group, Ozonian has also led RealEstate.com, Realtor.com operator Move, Help-U-Sell Real Estate and Prudential Real Estate and Relocation Services.
Hsieh, who handed the loanDepot CEO reins over last year to CoreLogic veteran Frank Martell, has said he worked behind the scenes for months to install Ozonian on the board, citing an “urgent need for board refreshment to address the challenges the company faces in this economic environment.”
After loanDepot’s board instead voted to demote Hsieh to non-executive chairman, Hsieh formally nominated Ozonian to the board, saying he controlled enough voting shares to win a proxy fight.
LoanDepot — which shed 6,100 employees last year on the way to posting a $610.4 million net loss — announced Tuesday that it had reached an agreement with Hsieh to temporarily expand loanDepot’s board to nine members in order to seat Ozonian.
“We believe that reaching this agreement with Anthony is clearly in the best interests of loanDepot and all of its shareholders,” loanDepot board chair Dawn Lepore said in a statement. “With this mutually beneficial resolution, we avoid the distraction of a contested election and management, under Frank Martell’s leadership as CEO, can focus fully on the continued execution of our Vision 2025 plan to position LDI for long-term value creation. We look forward to the perspectives Steve will bring to the board and the continued contributions of Pam and Andrew.”
LoanDepot loan originations by purpose
Source: loanDepot regulatory filings
Vision 2025 is a strategic plan the company put in place last summer as rising interest rates drastically curtailed loanDepot’s profitable refinancing business. The plan shifted loanDepot’s focus to growing its purchase loan business and loan servicing portfolio, and the company also developed a digital home equity line of credit (HELOC) product which it launched in November.
“The board and I have been discussing bringing in Steve Ozonian as a new director for the past several months, and I am pleased we have reached this point,” Hsieh said in a statement. “The addition of Steve to the board will bring a new and valuable perspective that will help loanDepot navigate the extraordinary challenges facing the mortgage industry.”
Expanding loanDepot’s board of directors means incumbent board member Pamela Hughes Patenaude will keep her seat. Patenaude is one of two incumbent directors whose terms expire at this year’s annual meeting.
The other director Andrew Dodson represents loanDepot shareholder Parthenon Capital LLC on the board, and Hsieh has previously said he was already committed through a stockholder’s agreement to keeping Dodson on the board.
Expanding the board to nine members allows Ozonian, Dodson and Patenaude to be nominated and elected to three-year terms at the 2023 Annual Meeting.
However, the terms of the settlement agreement call for the board’s membership to be cut back down to eight members at next year’s board meeting, and for only two of the three members whose terms are expiring — Hsieh and Brian Golson, Parthenon’s other board representative — to be nominated for reelection.
That means John Dorman, the third board member whose term expires next year, is slated to lose the seat he’s held on the board since July 2015. Hsieh also agreed to vote all his shares to support the board’s director nominations at the 2023 and 2024 annual meetings and not to make any director nominations of his own.
In a separate agreement, loanDepot agreed to pay Hsieh $857,000 to resolve a dispute over his February ouster as loanDepot’s executive chairman. While Hsieh will continue to oversee the company’s board as non-executive chairman, he will not dispute that his employment by loanDepot and role in running the company ended on Feb. 6.
LoanDepot board of directors
Editor’s note: This story has been updated to correct that loanDepot announced the settlement with Anthony Hsieh on Tuesday, April 4.
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