Two of the three proxy advisory firms weighing in on the fight for control of Better Home & Finance Holding Company have now told shareholders to reject founder Vishal Garg’s campaign to remove five of the mortgage lender’s directors.
Glass, Lewis & Co. recommended on Sept. 15 that shareholders decline to consent and instead return the company’s white consent revocation card, joining Institutional Shareholder Services, which reached the same conclusion earlier. Better’s special committee disclosed the Glass Lewis recommendation in a Sept. 16 filing with the Securities and Exchange Commission.
A third firm, Egan-Jones Proxy Services, went the other way, recommending a vote for both of Garg’s proposals. Garg disclosed that recommendation in his own filing the same day.
The dispute has run since August, when Better’s board removed Garg as chief executive and installed director Daniel Lewis as interim chief. RealtyWire covered the leadership change and the special committee’s account of how the board voted. Garg, who remains a director and a significant stockholder, is soliciting written consents to remove Lewis, Harit Talwar, Arnaud Massenet, Bhaskar Menon and Prabhu Narasimhan β a majority of the board.
What the advisers said
Glass Lewis was not uniformly favorable to either side. In passages Better quoted in its filing, the firm wrote that under Garg “shareholders experienced substantial value erosion following the Company’s public listing and Better remained materially unprofitable,” and that Garg “has not demonstrated that removing five directors and potentially restoring [himself] to an executive role would offer shareholders a sufficiently clear or credible path to a superior outcome.”
In passages Garg quoted from the same report, Glass Lewis also wrote that “the governance record provides legitimate grounds for criticism of the incumbent board, particularly regarding the execution and initial communication of the leadership transition and its subsequent defensive posture,” and that the company’s adoption of a rights plan and its “pursuit of emergency federal injunctive relief appears more problematic from a shareholder-franchise perspective.”
Both sides noted that permission to quote the Glass Lewis report was neither sought nor obtained.
Egan-Jones, per Garg’s filing, concluded that “the timing and stated rationale for Mr. Garg’s termination raise serious questions that the Board has not adequately answered,” and that over the two years preceding his removal Better generated roughly 14% total shareholder return β in the firm’s words, “the only positive return over that period among the selected peer group.”
Both sides press their case
“We are pleased that two leading independent proxy advisory firms, Glass Lewis and ISS, have rejected Mr. Garg’s effort to remove five of Better’s qualified and experienced directors and seize control of the Board,” the special committee said in its Sept. 16 statement. It said Garg had missed two self-imposed deadlines in August and a third on Sept. 8, and called on him to end what it described as a “costly and distracting consent solicitation.”
Garg, in his statement the same day, said the constraints of a consent solicitation “inherently make it difficult for our case for change to align with Glass Lewis’ analysis framework,” while maintaining that “accountable leadership must be reinstalled at Better to put the Company back on a path to value creation.”
The deadline itself has kept moving. One of the two releases Garg filed on Sept. 16 set a target date of Sept. 18 for submitting written consents; the other, filed the same day, set an updated target date of Oct. 2. In a video posted to social media on Sept. 13 and filed with the SEC, Garg told shareholders that while his goal was to have consents in by Sept. 18, “voting continues till October 26.”
Why it matters beyond the boardroom
Better is one of the more visible attempts to build a mortgage lender around automation. The company describes itself as the first AI-native mortgage and home equity finance platform and says it has funded more than $110 billion in loans. RealtyWire has reported on its move to take crypto-backed conforming mortgages nationwide with Coinbase.
The company said it is continuing targeted cost reductions, advancing a sale of its U.K.-based bank and preparing to launch a wholesale program powered by its TinmanGo product. Garg, in a Sept. 17 video filed with the SEC, listed selling the U.K. bank, a share buyback, closing five partnerships, improving sales conversion and reaching profitability as what he would do on returning.
A consent solicitation of this kind does not require a shareholder meeting; consents are counted as they arrive, and the outcome turns on whether holders of a majority of voting power sign the green cards before the solicitation expires. Neither side has published a count.
