The proxy battle between loanDepot’s board of directors and company founder Anthony Hsieh continues to see accusations fly.
Hsieh filed a proxy statement late Wednesday to “correct the record with respect to certain matters referenced in loanDepot’s press release of Feb. 8,” including that the decision to oust him as executive chairman was neither unanimous nor mutual.
The fight went public earlier this week when Hsieh, who founded loanDepot in 2010 and is the company’s largest shareholder, sent a letter to stockholders Tuesday announcing his nomination of Williston Financial Group CEO Steve Ozonian to the loanDepot board.
Hsieh holds approximately 57% of the combined voting power of loanDepot, and told stockholders he intends to vote all of his shares in favor of adding Ozonian to the board during the company’s 2023 annual meeting, a date for which has not yet been announced.
Ozonian would replace current board member Pamela Hughes Patenaude, one of two directors up for re-election.
The Irvine, Calif.-based company responded Wednesday by announcing that Hsieh had stepped down as executive chairman under a mutual agreement unanimously approved by the board.
“The resignation was in light of Hsieh's decision to run a proxy contest against loanDepot through his nomination of a director candidate outside of the governance process overseen by the board's Nominating and Corporate Governance Committee.” the company said in an SEC filing and news release.
Hsieh responded to that filing with one that disputes some of the claims made by the board, including the claim that he agreed to step down as executive chairman.
“The board voted to remove Mr. Hsieh as executive chairman and create a proxy committee before Mr. Hsieh formally submitted his notice of nomination of Mr. Ozonian,” Hsieh states in his filing. “On Monday, Feb. 6, a special board meeting was called, without providing Mr. Hsieh an agenda of topics to be discussed, despite being chairman of the board, executive chairman, and a controlling stockholder.”
During the special meeting, Hsieh said, the board voted 5-2 (with one director absent) to terminate him as executive chairman.
“This vote was not unanimous as the company had reported,” he said, while adding he subsequently agreed “that the company could describe the termination as mutual in light of his desire not to serve in this role after the board’s vote.”
Hsieh also states that, during the special meeting, the board created a committee that “excluded him and his director designee — in order to contest Steve Ozonian’s nomination — even though the nomination had not been formally submitted … or fully considered” by the nominating committee.
In addition, the board said in its statement that, at Hsieh's request, the committee had “interviewed Ozonian as part of its ongoing process for evaluating potential nominees for election at the company's 2023 annual meeting.” It added that before it could complete its evaluation, Hsieh informed it of his intent to use his voting power to replace Patenaude with Ozonian.
Hsieh, meanwhile, states the committee had been aware of Ozonian’s candidacy for several months. “In late November, in an effort to refresh the board in his capacity as chairman …, Mr. Hsieh began introducing Mr. Ozonian to the board as a potential independent director candidate,” he states. “Mr. Hsieh showed patience over this period of time in order to allow the board’s fulsome consideration of Mr. Ozonian as a director candidate.”
He said he has seen no sign that Ozonian is being “seriously considered as a candidate” for the board.
“In fact, despite the board’s claims that a fair review process is still ongoing, the company’s unusual actions of promoting Ms. Patenaude’s biography and accomplishments and its recent actions only indicate Mr. Ozonian is not receiving fair consideration and signal its strong intent to move ahead with its nomination of Ms. Patenaude,” Hsieh states.
He notes that, on Feb. 2, loanDepot “made the unusual choice” to announce Patenaude’s appointment to the board of a nonprofit, “and even in its response to Mr. Hsieh’s Feb. 7 press release, the company inexplicably included Ms. Patenaude’s biography.”
He continued, “There is no dispute that Ms. Patenaude is an accomplished individual, but the company’s obvious attempts to publicize those accomplishments at this time speaks volumes.”
Hsieh also claims the nominating committee was trying to “run out the clock on considering Mr. Ozonian” in order to deny Hsieh’s “rights as a stockholder.” Hsieh states he was told there would be no decision on Ozonian’s candidacy until sometime in late February.
“The nomination deadline for stockholders to exercise their rights to nominate a director, according to the company’s bylaws, is Feb. 17,” Hsieh states. “Adhering to the board’s schedule would have caused Mr. Hsieh to waive his nomination rights as a stockholder.”
He added that loanDepot “has an obligation to accurately communicate these matters to stockholders, loanDepot employees, and other stakeholders.”
loanDepot officials declined to comment.
