Better Home & Finance’s board offered founder Vishal Garg a vice chairman and advisory position potentially worth more than $15 million just three days after terminating him as CEO, according to a new court filing that challenges the company’s effort to restrict his campaign for board control.
The offer included $750,000 in annual cash compensation and 875,000 Better shares, Garg said in an opposition filed in the U.S. District Court for the Southern District of New York. Based on Better’s share price at the time, Garg valued the stock component at more than $15 million.
That figure represents the shares’ market value when the proposal was made, not guaranteed compensation. The filing does not establish what the shares ultimately would have been worth, when they would have vested, or whether Garg would have satisfied any conditions attached to the award.
Still, the offer complicates Better’s argument that Garg’s continued involvement threatened the company.
Better has accused its founder and former CEO of exercising poor judgment, presiding over substantial losses, and mounting an improper campaign to regain control. Garg argues that the board’s willingness to offer him a highly compensated leadership and advisory role days after removing him conflicts with that account.
The court has not ruled on either side’s claims. U.S. District Judge Margaret Garnett scheduled a conference for 3 p.m. Wednesday to consider Better’s pending request for a temporary restraining order that would restrict Garg’s shareholder solicitation while the lawsuit proceeds.
From Termination To $15 Million Offer
Better announced Aug. 3 that Garg had “mutually agreed” to leave the CEO position, with director Daniel Lewis taking over as interim CEO.
The company later revised its description of the transition, stating that every director other than Garg had voted to terminate him. Better cited concerns about Garg’s “judgment, temperament, and credibility,” along with more than $1.5 billion in cumulative GAAP losses since 2022 and a stock-price decline exceeding 90% during his tenure.
According to Garg’s latest filing, however, the board offered him the vice chairman and advisory arrangement on Aug. 6, three days after the termination.
Garg previously disclosed the proposed position in shareholder-solicitation materials, but the new filing provides the compensation terms. He rejected the arrangement because he considered the role too limited and believed he should retain an executive position.
The filing also points to Better’s own recent disclosures describing Garg as central to the company. Better’s second-quarter report said his departure could create uncertainty because he had played a central role in shaping its strategy, operations, and culture.
Garg also noted that shareholders had re-elected him to the board with 99.53% support in June, less than two months before his termination.
None of those facts proves that Better improperly removed him or that he should return to management. They do, however, raise a question the board may have to answer to shareholders: If Garg’s leadership posed the threat Better now describes, why was it prepared to pay him so much to remain involved?
Garg Opposes Better’s Injunction Request
The compensation disclosure is part of Garg’s response to a federal lawsuit Better filed Aug. 18.
Better accused Garg of violating federal securities laws by coordinating with other shareholders without making required disclosures, soliciting support before filing the proper materials, and falsely claiming he had secured enough votes to remove five directors.
Better has asked the court to restrict further solicitation until Garg makes what the company considers complete and accurate disclosures. It also wants previously obtained consents or expressions of support invalidated.
Garg’s initial claim of majority support proved incorrect. His amended Securities and Exchange Commission filing acknowledged that the written consents delivered Aug. 17 did not represent a majority of Better’s voting power.
Garg attributed the shortfall to an “administrative error” involving shareholder information supplied by Better’s in-house securities and regulatory counsel. His attorneys now contend that the board encouraged him to gather evidence of shareholder support before accusing him of improperly coordinating with those investors.
The formal Garg Group subsequently reported controlling approximately 13.7% of Better’s voting power. It is soliciting additional support to remove Lewis and directors Arnaud Massenet, Bhaskar Menon, Prabhu Narasimhan, and Harit Talwar without cause.
Garg’s opposition argues that Better has not established grounds to delay that solicitation or prevent shareholders from deciding the composition of the board.
Better’s allegations remain unproven, as do Garg’s claims about the board’s motives and the circumstances surrounding his termination.
Fight Expands To Delaware
The dispute is now unfolding in two courts.
On Aug. 25, Garg filed a separate lawsuit in the Delaware Court of Chancery challenging the shareholder-rights plan Better adopted five days earlier.
The limited-duration plan, commonly called a poison pill, generally would be triggered if a person or group acquired at least 15% of any class of Better common stock or 15% of the company’s voting power. Other shareholders would then be able to purchase additional shares at a discount, diluting the person or group that crossed the threshold.
Better said the plan is intended to protect shareholders from Garg gaining control without paying a premium or fully disclosing the identities and interests of investors allegedly working with him. The company said the plan does not prevent shareholders from supporting Garg through a properly conducted solicitation.
Garg’s Delaware complaint alleges that the board adopted the plan to entrench itself and interfere with shareholders’ voting rights. He is seeking to have it invalidated.
No court has determined that Better’s rights plan is improper.
The poison pill followed a rapid escalation in which Better first presented Garg’s departure as an orderly transition, later said it had fired him, sued him over his attempt to remove directors, and urged shareholders to reject his return.
Shareholders Absorb The Fallout
Garg’s filing says Better shares fell 41.6% during the trading day after his removal and had declined nearly 60% by Aug. 21.
The timing does not establish that the leadership change alone caused the decline. Better’s share price already had been volatile, and investors were also assessing the company’s continuing losses, revised profitability expectations, and strategy under Lewis.
Better reported $1.67 billion in second-quarter loan volume, up 38% from one year earlier. Total net revenue increased 28% to $54.7 million.
But the company still recorded a $30.6 million net loss and a $14 million adjusted EBITDA loss. Lewis also acknowledged that Better will miss its previous goal of reaching adjusted EBITDA break-even by the end of September.
The company expects an adjusted EBITDA loss of $15 million to $18 million during the third quarter.
That makes the governance fight more than a dispute over Garg’s conduct or Lewis’ authority. Better is spending management attention and corporate resources on federal litigation, a Delaware challenge, and competing shareholder solicitations while still trying to turn higher mortgage production into sustainable profitability.
The two sides are not even divided by fundamentally different mortgage strategies. Both support further cost reductions, continued investment in Better’s Tinman AI platform, the sale of its U.K. banking business, and the search for a permanent CEO.
Their central disagreement is over who should control those decisions.
The board’s $15 million offer does not resolve that question. But it makes Better’s explanation for excluding Garg less straightforward at precisely the moment it is asking two courts and its shareholders to keep him out.
