Vishal Garg, the Indian-American entrepreneur who came in the spotlight for one of the most controversial mass layoffsis now facing a dramatic turn in his own career.
Garg, who drew global attention in 2021 after laying off more than 900 employees in a four-minute Zoom call, has been removed as chief executive of digital mortgage company Better Home & Finance. The company’s founder was ousted from the top job earlier this month.
WHY DID GARG LOSE HIS JOB?
At the centre of Better’s explanation is what the company described as a breakdown in trust between Garg and the board. The company pointed to Better’s financial performance under Garg’s leadership, saying it has accumulated more than $1.5 billion in GAAP net losses since 2022.
It also said the company’s stock price had fallen by around 90% during his tenure, leading to a reverse stock split.
But the immediate trigger appears to have been a dispute over the company’s quarterly regulatory filing.
According to Better, Garg refused to provide representation letters needed for the company to submit its Form 10-Q filing with the US Securities and Exchange Commission on time. The company alleged that he withheld the documents in what it described as an attempt to extract “self-serving concessions.”
Better said this raised concerns about Garg’s judgment and his willingness to comply with the company’s reporting obligations.
The company said in its statement, “Together with Mr. Garg’s track record—including cumulative GAAP net losses exceeding $1.5 billion since 2022 and a stock price that had declined more than 90% under his leadership—the Board concluded that Mr. Garg was no longer fit to serve in an executive capacity at the Company.”
GARG TRYING TO REGAIN CONTROL?
The company’s latest statement was issued after Garg launched an effort to challenge the board following his removal.
Better said Garg was refusing to follow the process laid out in the company’s corporate documents for shareholders seeking to take action. The board argued that the rules for calling a shareholder meeting were already approved by Garg himself and that he should follow the same process.
The board also urged shareholders to consider what it called Garg’s “value-destructive track record” before taking any action.
Garg has disputed the circumstances surrounding his removal. He has said he was willing to sign the documents needed for the quarterly filing and has pushed back against the company’s account of the events. He has also proposed measures including a $30 million share buyback and a $5 million personal investment in Better.
Garg, however, continues to say he was blindsided by what he describes as a boardroom coup, coming just as the mortgage lender was beginning to recover financially. He is now pushing to regain his position.
“He hoodwinked me,” Garg told CNN, referring to Lewis, who is now the interim CEO appointed by the company. Garg said Lewis had advised him on cost-cutting for months before joining Better’s board on July 27. He also accused Lewis of publicly praising the company’s strategy on X before using that support to gain a board seat and the company’s trust. Garg alleged that Lewis had carefully positioned himself to take over as CEO. “I suspect he always wanted to become CEO,” he said, adding that he believed the board had made a mistake by removing him.
The dispute has now moved beyond a CEO transition and into a broader fight over control of Better.
Garg remains a director of the company even after being removed as CEO. He has indicated that shareholders could call a special meeting to replace members of the board and has sought a path back into the company’s leadership. He has hired prominent attorney Alex Spiro, a partner at Quinn Emanuel, to lead his legal fight and has formally asked the board to reinstate him as CEO.
In an effort to demonstrate his commitment to the company, Garg has offered to return for an annual salary of just $1 until Better becomes profitable. He has also said he would step down once that goal is achieved. “It’s an acknowledgement that I’ve been doing this for 10 years, but the execution hasn’t been perfect.
Better, meanwhile, has appointed board member Daniel Lewis as interim CEO. Lewis succeeded Garg after the company announced on August 3 that Garg would leave the CEO role. The company has also been pursuing deeper cost cuts and a shift towards a partner-led distribution strategy.
– Ends
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