Better Home & Finance’s board is further fortifying itself against founder and former CEO Vishal Garg, saying Monday that he should have “no continuing operating role” at the mortgage company as their fight over control stretches into another week.
A special committee appointed by Better’s board said in a news release that operating progress under interim CEO Daniel Lewis had strengthened its confidence in the company’s leadership transition and Lewis’s stewardship. The committee also said it was unanimous in opposing a return by Garg to an operating role at Better.
“The Special Committee is unanimous in its view that Mr. Garg should have no continuing operating role at Better,” the committee said in Monday’s announcement.
“The decision to appoint Daniel Lewis as Interim Chief Executive Officer, transition away from founder-led executive leadership and conduct a search for a permanent CEO was supported by every director other than Better’s founder and former CEO, Vishal Garg,” the committee added. “It reflected the Board’s collective judgment, following careful deliberation, as to what was in the best interests of Better and its shareholders.”
The committee warned that returning Garg to an operating role could damage shareholder value and company morale and complicate the search for a permanent CEO. Better also pointed to what it described as improving operating momentum, including remaining within third-quarter guidance, expecting to exceed $45 million in annualized cost reductions, and preparing to launch its wholesale program and additional enterprise partnerships.
The newly released statement marks the latest escalation in a dispute that has rapidly intensified since Garg left the CEO role earlier this month.
Since his departure on Aug. 3, Garg has been publicly campaigning to reshape Better’s board and return to company leadership, at one point saying during a live Bloomberg interview that he had “already corralled 52 percent of the vote.” In subsequent securities filings, however, Garg acknowledged that written consents submitted as part of an earlier effort to remove directors did not actually represent a majority of Better’s voting power.
Better sued Garg in federal court last week, accusing him of violating securities laws in connection with his campaign to replace directors and regain influence over the company. The complaint points to what Better alleges was an improperly disclosed shareholder campaign, along with letters, direct communications, media appearances and other outreach it says amounted to improper solicitation before Garg filed a preliminary consent statement with the SEC.
The company escalated again Thursday by adopting a shareholder rights plan, commonly known as a “poison pill,” aimed at making it more difficult for Garg or an aligned group to gain control without paying a premium. The plan is triggered if a person or group crosses a 15 percent ownership or voting-power threshold and is set to expire at Better’s 2027 annual meeting unless ended sooner.
Garg’s broader campaign has continued despite the failed consent effort. His preliminary consent solicitation seeks to remove five Better directors and roll back certain company bylaws, while his public proposal has contemplated eventually moving into a product and innovation role rather than remaining CEO.
