The public spat between Green Dot and one of its largest shareholders is escalating even as the shareholder raises its stake in the prepaid card company.
Tensions worsened this week when the activist shareholder, Harvest Capital Strategies, accused Green Dot's board of corporate governance abuses.
Harvest, which is seeking to oust Green Dot Chief Executive Steve Streit, recently nominated three industry executives to Green Dot's board. But on Monday Green Dot named three different people to the board while also expanding the board from eight seats to 10.
Harvest said in a press release that Green Dot's moves were designed to diminish the influence of Harvest's nominees, assuming they win election at Green Dot's 2016 annual meeting.
"Now, if elected by shareholders, the independent director candidates nominated by Harvest will comprise three out of ten directors rather than three out of eight," Harvest said. "We firmly believe the ultimate goal of recent board actions is to further entrench management and itself, while avoiding basic shareholder accountability."
Harvest also said that it owns approximately 9.4% of Green Dot's outstanding common stock — up from 6.2% in January, when the firm went public with its demands.
Green Dot's new directors are Raj Date, former deputy director of the Consumer Financial Protection Bureau; Chris Brewster, former chief financial officer at Cardtronics; and William Jacobs, chairman of Global Payments.
Harvest Capital's candidates for the board are Saturnino "Nino" Fanlo, the CFO of Social Finance; George Gresham, former CFO of NetSpend; and Philip Livingston, former CEO of Ambassadors Group and LexisNexis Web Based Marketing Solutions.