Green Dot CEO, a prepaid card pioneer, to step down Dec. 31

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Steve Streit, who founded the prepaid card pioneer Green Dot and spent two decades as its chief executive, has announced plans to retire as part of a shake-up at the top of the company.

The Pasadena, Calif.-based company, which recently reduced its financial guidance and has seen its stock price plummet this year, said Wednesday that Streit will step down as CEO on Dec. 31.

He will be succeeded on an interim basis by William Jacobs, who chairs Green Dot’s board, while the firm looks for its next CEO. Also departing is Mark Shifke, Green Dot’s chief financial officer since 2015.

Streit said in a press release that he had promised himself and his family that he would retire as CEO at the 20th anniversary of Green Dot’s founding, a milestone that was reached in October.

Earlier this year, Green Dot’s board established a search committee and hired a recruiter as part of its routine succession planning process, Streit said. “It is my belief that the recruiter now has the opportunity to be even more productive with my retirement public,” he stated.

Streit, a former radio disc jockey, founded Green Dot in 1999. He originally envisioned teenagers using the company’s prepaid cards to make cashless purchases. But the cards soon caught on with low-income consumers who did not have bank accounts.

Green Dot went public in 2010 and bought a Utah-based bank the following year. But the stock price plunged amid fierce competition from the likes of American Express, and an activist investor sought in 2016 to oust Streit.

He ultimately kept the CEO job but lost his role as chairman of Green Dot’s board.

In more recent years, Green Dot has embraced digital banking. But in November, company officials cited the threat from low-cost challenger banks in explaining a recent decline in active customer accounts.

They also said that they expected adjusted earnings before interest, taxes, depreciation and amortization to be about 25% lower in 2020 than what they projected for this year.

Since early May, shares in Green Dot have fallen by 60%. After the announcement that Streit plans to retire, the stock price fell by another 2% in after-hours trading to $25.86. The company also said late Wednesday that it expects certain financial metrics for 2019 to fall at the low end of its previous guidance ranges.

Mark Palmer, an analyst at BTIG Partners, said in a research note that Streit’s departure adds a “new element of uncertainty to an already uncertain story.”

Jacobs, who will take over as interim CEO, joined the Green Dot board in 2016. He is a former Mastercard executive who sits on the board of the payments processing company Global Payments Inc.

Green Dot also announced that J. Christopher Brewster, who also joined the company’s board three years ago, will serve as its interim president. Brewster is a former chief financial officer at the ATM maker Cardtronics Inc.

The prepaid card issuer also announced that Jess Unruh will become its interim CFO. Unruh joined Green Dot in 2015 and has served as both its chief accounting officer and its operational chief financial officer.

Streit is not severing ties with Green Dot. He will serve as an independent adviser to the interim CEO and will add the title of chief innovation officer.

“Steve revolutionized banking services 20 years ago with his insight into innovation, consumer behaviors and market changes,” Jacobs said in the press release. “The foundation laid by Steve leaves Green Dot well positioned to continue to lead and transform the financial services industry in the future.”

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