Green Dot Responds as Leading Shareholder Calls for Ouster of CEO (Jan. 26, 2016)
Green Dot CEO Steve Streit has come under fire with the company’s largest shareholder, Harvest Capital Strategies LLC, which is calling for his ouster along with that of two board members. The hedge fund manager holds a 6.2 percent stake in the company.
Included in a harshly worded letter to Green Dot’s board dated Jan. 25, Harvest Capital outlines its concerns with Streit’s leadership, including weak financial results and a history of what it calls poor execution and operational mismanagement, among other complaints. Harvest Capital also is calling for the removal of Ken Aldrich, chairman of the compensation and nominating and corporate governance committees, and Tim Greenleaf, chairman of the audit committee. Despite Harvest Capital’s concerns, it says Green Dot has substantial value and earnings power.
Green Dot quickly responded in a press release noting it has open lines of communication with its shareholders and has spoken with Harvest Capital several times. The company also said it will review Harvest’s suggestions carefully.
But Green Dot also came to the defense of its founder, pointing to milestones achieved with Streit at the helm. “We are confident in our road map for growth and our ability to deliver long-term shareholder value. Under Steve Streit’s leadership, Green Dot has established a strong competitive position against existing and numerous new competitors, renewed a long term contract with its largest customer, made several highly accretive acquisitions and positioned its business in full alignment with key current and pending regulatory changes, which could potentially have severe effects on Green Dot’s competitors,” according to the news release. Green Dot also recently authorized a share repurchase program and is committed to ongoing share repurchases through 2018, the company said.
Last June, Green Dot extended its agreement with Walmart another five years, during which Green Dot will continue as program manager and issuing bank for Walmart’s MoneyCard products, and Walmart will continue carrying Green Dot cards at least through May 1, 2020. Walmart accounts for about half of Green Dot’s annual revenue. In February 2015, Green Dot acquired AccountNow and AchieveCard. Another key acquisition was the company’s 2014 purchase of Santa Barbara Tax Products Group, the largest consumer tax refund processor in the U.S.