OnDeck Capital's chairman survives challenge from activist shareholder
Fending off a challenge from dissatisfied hedge fund investors, OnDeck Capital Chairman and CEO Noah Breslow was re-elected to the company’s board Tuesday by an 84% to 16% margin.
Also re-elected by similar margins were OnDeck directors Ronald Verni, a former software industry CEO, and Jane Thompson, the onetime head of financial services at Walmart.
“We are pleased with the support we received from our stockholders,” an OnDeck spokesperson said in an email.
Marathon Partners Equity Management LLC, a hedge fund in New York, said in April that it would vote against the three incumbent directors. The hedge fund, which had a less than 2% stake in OnDeck, criticized the online lender for chasing loan growth at the expense of profitability.
EJF Capital LLC, a hedge fund in Arlington, Va., said in February that it might engage with OnDeck’s management and board of directors, as well as other shareholders, about the firm’s strategic plans.
EJF Capital recently reported that it owns 9.4% of the company’s shares.
On Monday, OnDeck announced a change in strategy that was responsive to the shareholder complaints. The company said that it will reduce expenses and take other steps that are likely to cut into loan growth, while targeting profitability in the second half of 2017.
OnDeck, which makes online loans to small businesses, has lost roughly $95 million since going public in December 2014. In the past two and a half years, the New York-based company’s share price has fallen from $20 to around $4.