A large investor in the prepaid card pioneer Green Dot plans to nominate three directors to the prepaid card company's board, as the activist investor group seeks to remove founder and Chief Executive Steve Streit.
Harvest Capital Strategies, which owns a 7.2% stake in the Pasadena, Calif., company, said it will identify its board nominees in the coming weeks, whom they hope will replace management-backed directors, according to a Thursday news release. Green Dot has scheduled its annual meeting and board election for May.
Harvest in January called for Streit's dismissal, saying he has made strategic mistakes, delivered weak financial results and destroyed shareholder value since its 2010 initial public offering.
Before it announced its proxy fight, Harvest said Green Dot made an offer to the investment group to cooperate on finding directors to expand the company's board.
"What we received was a terse, four-paragraph letter with an offer … to participate alongside other shareholders in a search process" to supplement the board with additional directors, Harvest's Jeff Osher and Craig Baum wrote in a letter to Green Dot's board.
"To say we were thoroughly disappointed by the Board's immutable position regarding the need for substantial changes at Green Dot would be an understatement," Osher and Baum wrote. "The size of the Board is not the problem, but rather it is the composition of the Board that so desperately needs to be addressed."
Harvest has hired the law firm Olshan Frome Wolosky and the proxy solicitor Okapi Partners for its proxy fight.
"Green Dot deeply respects and values input from all of our shareholders and, as previously stated, we certainly respect and value the opinions and views offered by Harvest Capital Strategies," the company said in a statement issued Thursday, after Harvest released its letter to the board.
"We welcome the spotlight cast upon our business, including our past accomplishments and future prospects, resulting from Harvest's public communication," Green Dot said.