Better.com founder Vishal Garg faces fight after losing CEO position.
Vishal Garg, the founder of Better Home & Finance, has been removed as chief executive officer of the mortgage company nearly five years after he became widely known for firing 900 employees during a Zoom call just days before the Christmas holiday. A board leadership vote ended unanimously earlier this month to replace Garg with Daniel Lewis, a hedge fund manager who had recently joined the board. Garg’s removal comes after years of trouble for the mortgage company. The 2021 layoffs brought widespread criticism after employees were told during the video call that their jobs were ending immediately. Garg later apologized and said he had not shown enough respect or appreciation toward the workers who lost their jobs.
The company continued to struggle after the layoffs. Better faced a whistleblower lawsuit that was later dropped, along with an investigation by the Securities and Exchange Commission (SEC), which didn’t find wrongdoing. The company’s financial results also fell sharply after the housing boom that helped drive mortgage business during the pandemic. In 2021, Better reported about $1.5 billion in annual sales. Two years later, in 2023, that figure had fallen to roughly $70 million. The company’s stock also suffered a major decline, dropping about 93 percent by that time. Better’s market value, once reported at about $8 billion during the pandemic-era mortgage boom, now stands at about $300 million.
Garg has argued that the company was beginning to recover before the board leadership vote led to his removal. He said Better was on track to generate $200 million in sales this year and credited new technology and business partnerships for the improvement. The company has trained artificial intelligence systems to help process mortgages faster, while a partnership with Neo Home Loans reportedly doubled productivity and cut loan origination costs in half. Better has also formed partnerships with companies including Intuit, Coinbase and OpenAI to provide mortgage services. Garg also pointed to the company’s home equity line of credit business as another area that had grown.
Despite those developments, Garg said the board decided to replace him with Lewis. Garg claimed Lewis first approached him about six months earlier with ideas for cutting costs and improving the company’s finances. Garg said Lewis eventually joined the board on July 27 and was named CEO only a week later. Garg has since accused Lewis of misleading him about his intentions, saying Lewis gained a board position after spending months advising the company and later persuaded other directors that a leadership change was needed. Garg has suggested that Lewis had wanted the CEO position all along.
The former CEO has not left Better entirely after the board leadership vote. Garg remains on the company’s board and has launched an effort to regain control. His attorney, Alex Spiro, sent a letter to the board demanding that Garg be reinstated as CEO. Garg offered to work for $1 per year until the company becomes profitable and said he would later step away from the CEO position. Garg also called for most of the current directors to resign and proposed forming a new board. He said several investors had contacted him in support of his return and claimed to have enough shareholder votes to force a special meeting.
Better’s board has rejected that effort and called on Garg to stop his campaign to regain control. The company said his effort had become costly and distracting after the board unanimously voted to remove him without his participation.
Since Lewis took over, Better’s stock has fallen another 45 percent, although the shares were already down more than 16 percent during the year before Garg’s removal was announced. The leadership fight now leaves Better facing both financial pressure and an ongoing dispute over who should lead the company.
Garg has continued to defend his record, saying his focus has been making homeownership more accessible. The board, however, has backed Lewis as the company’s new CEO, leaving Garg’s future role at Better uncertain as the battle over leadership continues.
Sources:
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