Nonbank heavyweight loanDepot announced on Tuesday changes in its top management, with founder and chairman Anthony Hsieh no longer leading daily operations. He will instead take a more strategic leadership role in the company.
Hsieh, who is also the loanDepot’s main shareholder, will be the executive chairman, responsible for guiding the company’s strategy. The executive founded the mortgage lender in 2010, serving as chairman and CEO for the past 12 years.
Meanwhile, loanDepot hired the industry veteran Frank Martell for the newly-created president and CEO role and appointed him to the board of directors. Martell was CEO of Corelogic from March 2017 to January 2022, resigning after a bidding war for CoreLogic, with CoStar making a pitch only to issue an 11th hour withdrawal.
“After having guided loanDepot to the public markets through our IPO, I believe now is the right time for me to take an even more holistic strategic role with the company,” Hsieh said in a statement Tuesday.
LoanDepot debuted in the stock exchange in February 2021, raising $54 million. Last year, the lender’s origination volume topped $137 billion, an increase of 36% year-over-year, though gain-on-sale margins, profitability, and the company stock price all fell. The company achieved a 3.4% market share for the full year, up from 2.5% in 2020.
“Across the industry, things are again changing, but in that, I see an opportunity for loanDepot to continue to grow, add additional products and services and to gain additional market share,” Hsieh said.
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Martell will drive the daily operations, including the mello business unit. In March, loanDepot announced an operational restructuring with the creation of a new business division called mello, under the leadership of the digital technology veteran Zeenat Sidi.
Sidi and the lender’s executive management team will report to Martell.
The executive will have an initial annual base salary of $800,000. He is also eligible to receive an annual bonus targeted at 225% of his base salary. The company will grant Martell restricted stock units to acquire 1 million shares of the company’s Class A common stock, according to the employment agreement filed with the U.S. Securities and Exchange Commission (SEC).
Meanwhile, Hsieh will have an initial annual base salary of $850,000 for the remainder of 2022 and $350,000 for 2023. He is also eligible to receive an annual bonus targeted at 250% of his base salary for this year and 100% for 2023, according to the SEC fillings.
The loanDepot’s management team has a challenge ahead. LoanDepot expects loan origination volumes to decline for the first quarter of 2022 to a range between $19 billion and $24 billion. The gain-on-sale margin is expected to fall to a range between 200 and 250 basis points, reflecting the competitive marketplace.
Hsieh told analysts that the pressure on margins can last one-to-three quarters, provided that the mortgage market stays right around $3 trillion. “Now, if it shrinks to $2 trillion, $2.5 trillion, that pressure will continue until the industry gets rightsized in capacity,” he said during a conference call.