Dive Brief:

• Green Dot fired CEO Dan Henry on Friday and replaced him with Chief Financial and Operating Officer George Gresham, the prepaid card issuer and digital bank announced Monday.
• Henry, who held the CEO position since March 2020, resigned from Green Dot’s board of directors the same day, the company said.
• Gresham, who has served as the company’s chief financial and operating officer since October 2021, will continue to hold that role on an interim basis until a successor is appointed, Green Dot said.

Dive Insight:

The leadership change comes amid reports that Green Dot is in a dispute with one of its contract customers, Uber Technologies.

Green Dot alleges the ride-share company isn’t living up to agreements the companies made. The companies partnered on a product that allows drivers to receive their earnings in real time.

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

Green Dot warned it was seeing growing turnover in its customer base after three partners indicated they wouldn’t renew their contracts with the company.

Green Dot is postponing an investor day it had planned for next month, the company’s board chairman, William I. Jacobs said in a memo to employees.

"The Board is confident that George is the right person to lead Green Dot through its next phase of growth," Jacobs said in a statement. “George has deep experience with Green Dot and its strategy and an appreciation for the strengths of its dedicated team members.”

In the same memo, Jacobs praised Henry’s tenure.

“We would like to thank Dan for his contributions and service, and the foundation that Dan has laid, through a critical period of transition for the company,” Jacobs said. “Green Dot and its transformation into a modern financial-services company and technology platform present unique and complex challenges.”

Green Dot said Monday it expects its preliminary financial results for the third quarter “will be at or near the high end of the guidance ranges it previously communicated” in August.

“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.”

Gresham joined Green Dot’s board in October 2021, the company said, though he previously served on the board from May 2016 to May 2019.

In addition to its Uber dispute, Green Dot last 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 over Green Dot’s attempt to buy Republic’s tax refund processing unit.

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

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

Under Henry’s leadership, Green Dot launched GO2bank in January 2021. 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.

Gresham on Monday expressed a similar confidence.

“I look forward to continuing to work closely with the Green Dot board and management team to advance our objectives — enhancing shareholder value and building Green Dot into one of the leading fintech companies with a digital bank,” he said. “Green Dot has market-leading capabilities and tremendous potential for further growth, and I am confident in our team’s ability to continue to innovate and provide our clients with sophisticated banking and payment solutions.”