Dive Brief:

• Green Dot fired CEO Dan Henry last week and replaced him with Chief Financial and Operating Officer George Gresham, the prepaid card issuer and digital bank announced Monday. Gresham, who has been the CFO and COO since October 2021, will continue in those roles also until a successor is appointed.
• Green Dot, which provides card and related financial services directly to consumers and as white-label services to Walmart and Apple, said Henry was “terminated” as CEO and president Friday, and gave no further explanation for his dismissal. Henry, who held the CEO position since March 2020, also resigned from Green Dot’s board of directors the same day, the release said.
• In a separate release the same day, the company also postponed an investor day that it had previously scheduled for November to an unspecified later date. It also said third-quarter earnings will still be reported on Nov. 9 and they should “be at or near the high end of the guidance ranges it previously communicated.” It estimated in August that adjusted profits would be 34 cents to 38 cents per share.

Dive Insight:

The company didn’t immediately respond to a request for further information on the leadership change.

"The Board is confident that George is the right person to lead Green Dot through its next phase of growth, and we are grateful to have a proven leader of George’s caliber and experience to step into the role of Chief Executive," Green Dot Chairman William I. Jacobs said in the company’s statement. 

Gresham has been a member of the company’s board since October 2021.

The leadership change comes amid reports that Green Dot is in a dispute with one of its contract customers, the ride-share company Uber Technologies. Green Dot disclosed the legal friction in August, alleging Uber isn’t living up to agreements between the companies.

When asked for additional information at that time, a Green Dot spokesperson suggested legal action had begun. 

“We generally do not comment on pending litigation, but we do intend to exercise our legal rights and protect our interests in this matter,” the Green Dot spokesperson, Alison Lubert, said in August.

Austin, Texas-based Green Dot also disclosed during the second-quarter earnings report in August that “several” of its banking-as-a-service (BaaS) customers had declined to renew their contracts.

“We have several contracts where we could not come to an agreement that both we and our partners believe would serve the best interests of both parties and they will not be renewed,” Gresham said during the company’s Aug. 4 earnings call with analysts. 

Green Dot also earlier this year weathered the financial repercussions of a failed acquisition. The company in June paid $13 million to Republic Bank to settle a lawsuit the Louisville, Kentucky-based bank filed last year over Green Dot’s failed attempt to buy Republic’s tax refund processing unit.

That settlement was in addition to a $5 million termination fee Green Dot paid Republic in January, according to Securities and Exchange Commission (SEC) filings.

Time for a change?

The leadership shakeup could signal another change in direction for Green Dot.

Under Henry’s leadership, Green Dot launched GO2bank in January. The digital bank aims to serve the low- and moderate-income (LMI) market. The launch marked a major accomplishment for Henry, who led the company after the December 2019 departure of longtime CEO Steve Streit.

Since taking the helm, Henry made clear he planned to regain “lost ground” in the digital consumer banking market, a space that has seen growth from competitors such as Varo Bank, Chime and Current.

“While the news of Dan Henry’s termination is not a positive and clearly a surprise, importantly this seems to be a board-chosen direction rather than one related to cause,” Steven Kwok, an analyst at Keefe, Bruyette & Woods, said in a note to clients, according to Bloomberg. “It would appear the board felt that it was time for change as far as an execution strategy and Mr. Gresham’s extensive industry experience should help him in the CEO role.”