loanDepot’s founder Anthony Hsieh won his battle to nominate Steve Ozonian as a member of the lender’s board of directors. However, the two-month nomination dispute had its consequences: Hsieh was fired from the executive chairman position – but remains the chairman and largest shareholder.
loanDepot announced Tuesday evening it will promptly increase the size of its board from eight to nine members to accommodate Ozonian, who has been the CEO of the Williston Financial Group since 2017, and his term will last from 2023 to 2026.
Two of the board members who have terms expiring in 2023 – Andrew Dodson, managing partner at Parthenon Capital, and Pamela Hughes Patenaude, a housing policy expert who once served as a deputy secretary of the Department of Housing and Urban Development – will also be nominated this year to a three-year term.
The settlement agreement states that in 2024, loanDepot will nominate only Hsieh and the managing partner and co-CEO of Parthenon Capital, Brian Golson (or another designee of Pathernon), to reelection. The number of loandepot’s board members will be reduced from nine to eight directors in 2024. John Dorman will not stand for reelection in 2024, a spokesperson for Hsieh said.
The dispute over loanDepot’s board became public on February 7, when Hsieh used his majority voting power to unilaterally nominate Ozonian for election to the board of directors. Hsieh has over 40% of the economic interest and 57% of the combined voting power at the lender, per Securities and Exchange Commission (SEC) filings.
The following day, the company announced Hsieh was stepping down as executive chairman while remaining as chairman. But Hsieh said in a news release that “the Board, in a 5-2 vote (with one director not present), terminated” him as executive chairman.
loanDepot agreed to pay Hsieh $857,000 and certain other amounts – conditioned upon Hsieh providing the company a general release of claims – due to his termination as executive chairman, per an 8k filing with the SEC.
Dawn Lepore, chair of the board’s nominating and corporate governance committee, said in a statement that with the agreement, “we avoid the distraction of a contested election and management, under Frank Martell’s leadership as CEO, can focus fully on the continued execution of our Vision 2025 plan to position LDI for long-term value creation.”
“The addition of Steve to the Board will bring a new and valuable perspective that will help loanDepot navigate the extraordinary challenges facing the mortgage industry,” Hsieh said in a statement.
Like its peers, California-based loanDepot has been challenged by the surging mortgage rates landscape. The company turned its 2021 profits of $555.5 million into a $475.8 million adjusted loss in 2022, despite exiting the wholesale channel, trimming its workforce, and investing in new products.
Analysts believe the company’s “Vision 2025” plan, which includes rightsizing its operations, will take many quarters to improve its financial performance and return the lender to profitability.