Hsieh drops his "executive" title but stays on as chairman of the board
loanDepot founder Anthony Hsieh was ousted as executive chairman a day after he “exercised his right” as the largest voting stockholder to replace incumbent director Pamela Hughes Patenaude.
Hsieh, who holds over 40% of interest and 57% of combined voting power of loanDepot, sent a letter to fellow stockholders saying that he intended to use all of his voting shares to nominate real estate veteran Steven Ozonian as an independent director.
In his letter, Hsieh said his objective for nominating Ozonian was for him to help position the company, which is facing significant challenges in the current high-interest rate and operating environment, to succeed. Ozonian is the CEO of the Williston Financial Group and currently serves on the board of directors of LendingTree.
“Mr. Ozonian’s experience and perspective will be additive to the loanDepot board of directors at this critical juncture for the company,” he wrote. “The recent rise in rates and challenging macroeconomic environment make Mr. Ozonian’s potential appointment all the more urgent.”
Hsieh added that he had been trying to convey these challenges to the board for months but had been unsuccessful.
“I have sought to engage with the board to consider Mr. Ozonian and the need for refreshment over the past few months, but there has been no appetite for meaningful discussions,” Hsieh said. “Instead, I have only seen signals that leave me very concerned that the scourge of board entrenchment is taking hold. The board’s recent decision to create a committee that excludes me and my director designee — in order to contest Mr. Ozonian’s nomination — only accentuates this concern, as does its decision that I should no longer serve as executive chairman.”
The loanDepot founder made it clear that his decision was not intended to target Patenaude personally, “nor is it a negative reflection on the current management team and the wonderful people of loanDepot. It is simply a reflection of the urgency I believe is necessary to address the company’s challenges by appointing a director with significant and relevant operating experience.”
In a statement, the California-based nonbank countered that Hsieh’s abrupt move to nominate Ozonian was outside the governance process overseen by the board’s nominating and corporate governance committee.
“It is surprising and disappointing that Mr. Hsieh would attempt to circumvent the company’s process for assessing potential director nominees,” said Dawn Lepore, chair of the board’s nominating and corporate governance committee. “We question why he would pursue a disruptive proxy contest to install his nominee when Mr. Ozonian has already been, and continues to be, under evaluation. Our focus remains on following good corporate governance practices, fulfilling our fiduciary responsibilities and driving the long-term value of loanDepot.”
Following a “mutual agreement” approved by the board, loanDepot said Hsieh will step down as executive chairman but will continue to serve as chairman of the board of directors. Hsieh last year kept buying shares in loanDepot, while senior executives were selling stocks as the company’s share price tumbled.
What are your thoughts on Hsieh using his voting power to nominate Ozonian? Let us know in the comments below.
