Two Green Dot Directors Up for Re-Election Resign Just Before Contested Annual Meeting

Two long-time members of Green Dot Corp.’s board of directors who were up for re-election suddenly resigned Sunday, just ahead of the company’s contested annual shareholder meeting Monday that potentially could lead to the ouster of company founder and chief executive Steven W. Streit.

The Pasadena, Calif.-based prepaid card provider announced the resignations of Timothy R. Greenleaf and Michael J. Moritz Monday morning in a brief regulatory filing that gave no explanation for their actions. A Green Dot spokesperson did not respond to a Digital Transactions News request for comment.

Greenleaf and Moritz had been Green Dot directors since 2001 and 2003, respectively. Their resignations leave only Streit, who is the board’s chairman, on the management-backed “white” proxy card card of directors up for election. Green Dot for weeks—as recently as in a Friday press release—had been urging shareholders to vote for Streit, Greenleaf and Moritz in its proxy fight with Harvest Capital Strategies, a San Francisco hedge fund that owns more than 9% of Green Dot and is running its own slate of three director nominees on the “green” proxy card.

Harvest maintains that Green Dot’s financial and operational performance are sub-par and that it’s time for new leadership at the top. The firm also did not reply to a Digital Transactions News request for comment about the resignations.

With shareholders having had weeks to submit their votes, it’s possible that Greenleaf and Moritz, who issued a letter to Green Dot stockholders May 16 backing Streit, sensed the voting was going against the white card nominees. But no one should know until the official count, says Lawrence Berlin, a vice president and equity analyst at Chicago-based First Analysis Securities Corp. who follows Green Dot.

“They might have good suspicion,” he says. “It very well might be, but we don’t know. It’s hard to say until the meeting happens.”

Green Dot has a 10-member board, now with two vacancies. Regardless of today’s vote, Green Dot has promised to appoint one of Harvest’s nominees, George Gresham, former chief chief financial officer of NetSpend Holdings, a major Green Dot rival now owned by processor Total System Services Inc. (TSYS). Green Dot also says it will separate the roles of chairman and CEO.

Adding to Green Dot’s woes was a processing glitch that apparently left some holders of the Walmart MoneyCard, a general-purpose reloadable prepaid card issued by Green Dot’s bank subsidiary and sold at Wal-Mart Stores Inc. locations, unable to access their funds for a time last week.