How does former Better.com CEO Vishal Garg still have a job?
With everything that has gone down at Better.com over the past 18 months, many of us are scratching our heads in wonder that CEO Vishal Garg remains employed.
On December 10, employees of the digital mortgage lender were notified via email by the Better board of directors that Garg would be taking time off, effective immediately, after the “very regrettable events over the last week.”
The move came, according to an employee who wished not to be named, after the digital mortgage company hired a crisis firm earlier that week. For those of us following the drama, it was not a surprise.
But what is a shock is that Garg has not been asked to step down altogether. Some surmised that he had super-voting shares and thus could vote to keep himself in the role of CEO despite what others voted. But after digging into the S-4 filed by Better.com’s SPAC partner, Aurora Acquisition Corp., in November, we realized that is not the case.
According to the filing with the U.S. Securities and Exchange Commission, “entities affiliated with the Better Founder and CEO, Mr. Vishal Garg, will beneficially own approximately 17.5% of our outstanding common stock as a whole, but will control approximately 22.7% of the voting power of our outstanding common stock.”
To ensure that we were not undercounting his voting power, we also examined the shares that Garg has from unexercised options. Counting those, and taking into account different voting rights attached to various share classes, it does not appear that the erstwhile CEO has the ability to block his removal due to complete voting control.