Green Dot’s Most-Tenured Directors Quit Ahead of Proxy Fightby
Announcement comes hours before vote at annual meeting
CEO Steven Streit is now company’s sole nominee to board
Green Dot Corp.’s longest-serving directors, Timothy Greenleaf and Michael Moritz, resigned from the board hours before they were to stand for re-election as the firm’s largest shareholder wages a proxy fight.
Harvest Capital Strategies, which owns a 9.5 percent stake in Green Dot, targeted Greenleaf and Moritz along with founder and Chief Executive Officer Steven Streit when it started a public proxy battle earlier this year. Streit is now the company’s sole nominee to fill three board seats at Monday’s annual meeting, the Pasadena, California-based company said in a filing.
Harvest challenged Green Dot’s leadership after shares of the company tumbled 64 percent from their peak in December 2010. Green Dot, a reloadable prepaid debit-card provider that gets almost half of its revenue from a partnership with Wal-Mart Stores Inc., has dropped in four of the past five years, a performance it attributes to increased competition and regulation.
“Green Dot’s persistent shareholder value destruction since 2010 has nothing to do with a lofty IPO valuation, headwinds, unforeseen competition, detours, bad luck, or other excuses,” Harvest managing director Jeff Osher wrote Thursday in an open letter to Green Dot shareholders. “The problem is leadership.”
Greenleaf, who joined the board in January 2001, was chairman of the audit committee. He’s a managing director at private equity firm Fairmont Capital Inc. and worked closely with bank regulators on behalf of Green Dot, the firm said April 19 in a proxy filing. Moritz, chairman and managing partner at Sequoia Capital Ltd., had been on the board since February 2003. He was most recently an independent director and regularly introduced the company to new business partners, Green Dot said in the filing.
Moritz defended Green Dot’s performance in a letter to shareholders last week, praising the company’s management team for serving low- and middle-income consumers without resorting to “predatory practices” like excessive overdraft fees.