Vishal Garg has put numbers behind his campaign to reshape Better Home & Finance, proposing a 90-day plan that targets $2 billion in quarterly mortgage volume, zero monthly cash burn, changes to loan originator compensation, and expanded use of artificial intelligence.
Better’s board rejected the plan within hours, calling it “utterly unworkable” and accusing Garg of proposing fixes for operating weaknesses that developed during his decade-plus as CEO.
The latest exchange shifts the fight beyond the circumstances of Garg’s removal and toward the future of the mortgage fintech, including how it plans to achieve profitability and what roles AI and further cost reductions will play.
Garg’s plan, released Thursday and filed with the SEC, calls for increasing quarterly funded-loan volume to $2 billion, producing an additional $7 million in monthly revenue, and reducing monthly cash burn from approximately $4 million to zero.
“The next step is to build on that operating discipline — improving conversion, expanding HELOCs, deploying AI where it drives real value, and working harder for shareholders,” Garg said.
The $2 billion target would be approximately 20% above Better’s $1.67 billion in second-quarter funded volume and 31% to 45% above its third-quarter guidance of $1.375 billion to $1.525 billion. Garg’s release characterized the proposed increase as 25% but did not identify the baseline used.
Better reported $54.7 million in second-quarter revenue, a $30.6 million net loss, and a $14 million adjusted EBITDA loss.
Garg’s new plan focuses on eliminating monthly cash burn, which is not the same measure as adjusted EBITDA.
AI, Conversion, And Originator Compensation
Garg identified $2 billion in quarterly volume as Better’s break-even point and projected that his initiatives would add $7 million in monthly revenue and approximately $2.25 million in monthly contribution margin.
The plan calls for launching what Garg identified as the “CK HELOC” through Better’s Tinman technology platform and closing five prospective partnerships he said have stalled under the new management team.
Garg did not identify the five prospective partners. Better has been shifting beyond its consumer-direct roots through enterprise partnerships, although recent disclosures have raised questions about how much revenue those relationships generate.
Garg proposed using AI-supported call routing and workforce management to increase originator talk time from 2.1 hours to what he called an industry average of four hours per day. He projected that the change could improve conversion by at least 50% across Better’s direct-to-consumer and partner channels, while raising its direct-to-consumer lock-to-fund rate from approximately 45% toward what he described as a 60% industry average.
“Step one is continuing to build out the AI infrastructure and deploy Tinman to the five major partners I was in the process of closing,” Garg said. “Step two is making sure our people focus on the work AI cannot do: speaking with customers, processing loans faster, and leveraging AI to underwrite more efficiently.”
For Better’s originators, the most consequential provision may be a proposal to “align” commissions on AI-assisted conversions, which Garg said would save $500,000 per month. The plan does not explain whether compensation would be reduced, which loans would qualify, or how the savings were calculated.
Garg projected another $1 million in monthly savings from instant counteroffers and $500,000 from moving portions of Better’s legal and litigation work to AI-assisted teams. Together with the proposed commission changes, the measures represent $2 million in projected monthly savings. None has been implemented, and Better has not confirmed the estimates.
Board Says Garg Had His Chance
Better’s special committee responded hours later, accusing Garg of acknowledging operational shortcomings that developed during his own tenure.
“He cites operating metrics that he admits are substantially below industry standards, then proposes operational changes he failed to implement during more than a decade as CEO,” the committee said in a statement filed with the SEC.
The committee pointed to Garg’s previous projection that Better would reach $1 billion in monthly mortgage volume by May and its abandoned September adjusted EBITDA break-even target.
Better’s second-quarter volume averaged approximately $557 million per month, although quarterly production does not necessarily occur evenly from month to month. In an earlier investor presentation, the special committee said Garg missed the $1 billion monthly target by more than 40%.
“Mr. Garg led Better for more than a decade and had every opportunity to implement a plan to improve its performance and stock price,” the committee said. “His latest plan is not only conspicuously late — it is also utterly unworkable.”
The board said Garg’s plan does not adequately account for the regulatory approvals required to sell Better’s U.K. bank.
Garg said the transaction could be completed within 30 days after a board transition, provided Better finds a credible buyer and receives the required approvals. Earlier consent materials estimated that the sale could generate approximately $74 million in gross proceeds.
Garg proposes using the proceeds, together with projected revenue gains and savings, to support a $30 million share repurchase, beginning with an authorization of as much as $10 million. The larger repurchase would therefore depend partly on the bank sale and projected operating improvements.
Directors Still Not Identified
Garg’s plan provides more information about the qualifications and financial commitments he wants from a reconstituted board, but it still does not identify prospective directors.
He is seeking shareholder approval to remove Lewis and directors Arnaud Massenet, Bhaskar Menon, Prabhu Narasimhan, and Harit Talwar.
If the campaign succeeds, Garg, Hugh Frater, and Michael Farello would remain as directors and could fill the vacancies. The special committee argues that this could give Garg effective control without shareholders knowing who would join the board, while disrupting required committees and creating Nasdaq compliance concerns.
Garg said future directors would be expected to purchase Better shares worth twice their board compensation, while receiving all board compensation in stock. He said the board would prioritize candidates with experience scaling businesses from approximately $200 million in annual revenue to multiples of that level.
Garg proposed engaging Daversa Partners to appoint a permanent CEO within 120 days after the consents become effective. He previously offered to return temporarily for a $1 salary, then transition to chairman or chief product and innovation officer after a successor was appointed.
Garg Appeals Directly To Employee-Shareholders
Garg also appealed directly to Better’s employee-shareholders on Thursday, inviting them to meet with him to discuss the plan and the consent solicitation.
“I am completely legally allowed to meet any shareholder and discuss our 90-day plan post-return and have you consider the consent proxy,” Garg wrote in a LinkedIn post.
His reference to a “post-return” plan indicates that he expects to resume a leadership role if the campaign succeeds.
Garg also alleged that Better spent $2.1 million during the past month on lawyers and consultants opposing his campaign.
Litigation Continues
Better sued Garg in federal court, alleging that he violated securities laws by soliciting shareholder support and by overstating the voting power backing his campaign. Garg disputes the allegations.
A federal judge declined to halt the solicitation on an emergency basis, finding that Better had not demonstrated irreparable harm. The court did not decide whether Garg’s SEC filings complied with securities laws, and the underlying case remains pending.
Garg separately sued Lewis and six other directors in Delaware, accusing them of breaching their fiduciary duties and using Better’s shareholder-rights plan to entrench themselves. The directors dispute those claims, and the Delaware court declined Garg’s request to suspend the plan on an emergency basis.
Garg’s Delaware complaint also disclosed that Better offered him a vice chairman and advisory role potentially worth more than $15 million three days after removing him as CEO. Better said the offer was intended to facilitate an orderly transition and would not have given him operating authority.
AI Models Enter The Proxy Fight
Better’s special committee also cited a Proxyanalyst review in which four AI models concluded that shareholders should reject Garg’s campaign, pointing to his record, disputed statements about shareholder support, and failure to identify replacement directors.
Proxyanalyst describes the results as automated analysis rather than a voting recommendation and notes that all four models relied on the same extraction of the competing filings. The models also identified concerns about the current board, including its handling of Garg’s removal and the timing of its shareholder-rights plan.
The dispute is no longer merely about who controls the board. Garg’s proposal could change how LOs are paid, which work is shifted to AI, and how aggressively the company cuts costs in pursuit of profitability.
