Vishal Garg, the founder and former CEO of mortgage lender Better Home & Finance, was removed from his leadership position on August 3, according to a report from Daily Mail.
The company's board voted unanimously to appoint Daniel Lewis as the new CEO, replacing Garg. This ouster follows a series of controversies that have plagued the company, beginning with Garg's widely criticized decision in December 2021 to lay off 900 employees via a Zoom call shortly before Christmas.
At the time, Garg told employees on the call, "If you're on this call, you are part of the unlucky group that is being laid off. Your employment here is terminated effective immediately." He later apologized for the manner in which the layoffs were conducted, stating he failed "to show the appropriate amount of respect and appreciation for the individuals who were affected."
Since then, Better Home & Finance has faced additional challenges, including a whistleblower lawsuit that was later dropped and a Securities and Exchange Commission investigation that found no wrongdoing. The company's financial performance has also declined significantly; its stock cratered 93 percent by 2023, with annual sales plummeting from $1.5 billion in 2021 to $70 million in 2023. Its market value dropped from an $8 billion valuation during the pandemic-fueled refinancing boom to approximately $300 million.
Garg maintains that he was on the verge of turning the company around when he was replaced. He cited the company's decision to train AI models for mortgage processing and a new partnership with Neo Home Loans, which he claims doubled productivity and halved loan origination costs. Major firms like Intuit, Coinbase, and OpenAI have also partnered with Better this year to utilize its mortgage services, and the company has developed a strong home equity line of credit business.
"We're winning," Garg insisted. "We've tripled loan volume. We're close to profitability."
He acknowledged that the infamous Zoom layoffs had severely damaged the company's reputation. Garg suggested that Lewis convinced the board he was not pushing employees hard enough, which led to his usurpation of the CEO position. Garg stated that Lewis, a hedge fund manager, had approached him about six months prior with ideas for cost-saving and profitability improvements. "His ideas about innovation were not," Garg commented.
Lewis was brought to the board on July 27, and within a week, he had reportedly convinced the other directors to oust Garg. Garg feels Lewis "hoodwinked" him into appointing him as the new CEO after months of advising the company and securing a board seat, suspecting Lewis always intended to take the top role. "The board made a mistake," Garg said.
Following Lewis's appointment, Better Home & Finance stocks have fallen 45 percent, though they were already down more than 16 percent for the year before Garg's departure was announced.
Garg remains on the board and claims that a number of investors are urging him to return as CEO. He asserts he has gathered enough votes to force a special board meeting and has retained attorney Alex Spiro to assist in his bid to reclaim the CEO position. Spiro sent a letter to the board demanding Garg's reinstatement, offering to work for $1 a year until the company is profitable, after which he would transition out of the CEO role.
Garg also proposed in the letter that all directors except himself, Michael Farello, and Hugh Frater resign. However, Better Home & Finance has publicly urged Garg to abandon these efforts, stating in a statement that he was removed by a unanimous board vote and has launched a "costly and distracting campaign" to reverse the decision.
In a statement to the Daily Mail, Spiro emphasized Garg's commitment to making homeownership more accessible. He noted the recent stock price drop and urged the board to "select the best long-term CEO for Better so Vishal may move into a role where he can continue driving the American dream for more Americans while having new leadership to lead the company towards its full potential."