Stressing Accountability, Green Dot Proposes 1-Year Board Terms
After a year that saw activist stockholders call for more accountability and a shakeup in company leadership, Green Dot Corp. has unveiled a plan to make each member of its board of directors subject to annual re-election. The initiative calls for a change to the company’s certificate of incorporation to declassify all board seats. Currently, the board consists of three classes, with members of each class elected for three-year terms on a staggered basis, such that the terms of each class expire in successive years, according to the company.
Under the new proposal, every member of the board would be elected to a one-year term, with all directors up for re-election every year. The plan would be phased in over the next three years. The term of the directors in the current Class I expire at Green Dot’s 2017 annual meeting, while the terms of Class II and Class III do not expire until the 2018 and 2019 meetings, respectively. Once those terms are up, all directors would stand for annual elections starting with the 2019 shareholder meeting. The plan has been approved by the current board, which will recommend that stockholders approve the proposal at the company’s 2017 annual meeting.
“We believe that by taking this step to eliminate board classes, moving to one-year terms over a transition period, Green Dot’s board of directors is demonstrating its accountability to shareholders,” said William I Jacobs, chairman of Green Dot’s board of directors. “We value our shareholders’ opinions and consider their feedback when establishing and evaluating appropriate policies and practices.”
Jacobs’ comments echo the sentiments expressed by Green Dot CEO Steve Streit during and after a contentious proxy battle earlier this year with activist shareholder Harvest Capital, which called for his ouster, among other leadership changes. When the smoke had cleared after the company’s 2016 shareholder meeting, Streit retained his role as CEO of Green Dot, but Jacobs was named chairman of the board—a role Streit had previously held along with being CEO. Two other board seats went to Harvest nominees.
The period since the May meeting has been relatively calm for Green Dot, and the company’s latest earnings report showed strong growth during the third quarter, with operating revenue, adjusted EBITDA and earnings per share all up on quarter-by-quarter and year-over-year bases. The company also saw positive consumer reception of its new products, including the Green Dot Platinum Visa Secured Credit Card, the Walmart MoneyCard’s savings account feature and two programs with ride-sharing company Uber.