Better's Nasdaq deadline still needs three independent directors after Yaccarino

Nasdaq told Better on 13 October that its board and audit committee fail independence rules. Linda Yaccarino fills one seat, but the company still needs three independent directors by 27 November.

Better Home & Finance has until 27 November to show Nasdaq how it will fix its board. Nasdaq says the board and audit committee fail its independence rules. Better needs a majority of independent directors and three independents on the audit committee.

The company named Linda Yaccarino, the former chief executive of X, as an independent director effective Thursday 15 October, Business Wire reported at 10:33 EDT. It called her the first director appointed under Better 2.0. Founder Vishal Garg praised her experience in enterprise partnerships, advertising and consumer behaviour. The announcement landed two days after Nasdaq's written notice of 13 October.

The problem is a seat count. One independent director fills one seat, and the filings leave the board three independents short of a majority. The reason sits in a consulting contract in an SEC filing that the wires skipped.

The board got here quickly. Garg delivered written consents on 30 September removing five directors without cause. The company reported on 6 October that 13,633,243 shares voted for each removal and 30,154 against. Hugh Frater, a sixth director, resigned.

Garg then acted as sole remaining director. He appointed Bing Gordon, Steven Sarracino, Paula Tuffin and Nicholas Calamari. Tuffin is the company's General Counsel, Chief Compliance Officer and Secretary, and Calamari is an employee.

Garg is himself the company's Founder and Head of Product, Platform and Innovation. That leaves three of the five directors who sat before Yaccarino as employees or executives. A later amendment says Gordon and Sarracino were candidates identified by Garg. Tuffin and Calamari are not independent because they work for the company.

Gordon is out as well. Nasdaq's bright-line test bars a director who accepted more than $120,000 in any 12 consecutive months within three years, board fees aside. The rule is a disqualifier, so the board has no discretion to wave it through.

The same amendment, filed 9 October, discloses a consulting agreement dated 8 December 2025 under which Gordon advises on matters including product strategy. On 11 February 2026 he received 20,000 restricted stock units, which are company shares that vest over time. Their grant date fair value was $582,200, nearly five times the threshold.

For the audit committee, SEC Rule 10A-3 bars any consulting or advisory fee to a member, which excludes him independently.

The arithmetic is short. The independents are Sarracino, whose amendment discloses no related-party transactions, and Yaccarino. That is two of six directors, or 33 percent. Four directors are not independent, so a majority needs five independents, and Better is three short.

More names will not arrive on reputation alone. Garg controls the voting power that elected this board, so every further independent is his choice. Each will face the same bright lines.

The audit committee has its own floor. Nasdaq requires at least three independent members. Gordon cannot serve, which leaves Sarracino and Yaccarino, so the committee still needs a third.

The clock is generous but not open. Nasdaq's written notice of 13 October cites two rules: a majority-independent board and a three-member audit committee. The company's earlier filing had listed four, including the compensation and nominations committees.

According to the amended filing of 14 October, Better has 45 calendar days, until 27 November, to submit a plan. If Nasdaq accepts it, the exchange may grant an extension of up to 180 calendar days from the notice. That runs to 11 April 2027. The notice has no immediate effect on the listing, though failure to regain compliance could lead to a delisting determination.

Garg therefore has a choice. He can name three independents with finance and audit committee experience before 27 November and hand Nasdaq a clean plan. Or he can use the full 180 days while the board also names a successor interim chief executive. The board began that process when it removed Daniel Lewis from the role on 5 October.

The first path costs Garg control of the board sooner. The second leaves insiders in the majority while the audit committee oversees the final third-quarter results.

Those results make independence more than a listing formality because the committee signs off the numbers. In preliminary figures released on 14 October, Better reported an adjusted EBITDA loss of $24.8 million to $25.8 million for the quarter. Guidance had been a loss of $15.0 million to $18.0 million. At midpoints that is a loss of $25.3 million against $16.5 million guided.

The company puts about $8.0 million of the quarter on proxy-related legal, public relations and other expenses. Remove that and the loss would be about $17.8 million.

The loss is wider than the $14.0 million of the second quarter and the $23.0 million of the third quarter of 2025. The company ended the period with $81 million of cash plus $9 million restricted.

Without the proxy costs the loss would sit at the top of the $15.0 million to $18.0 million guidance. The $8.0 million is the number to test. It is the company's own estimate, so an audit committee that no one can say answers to the founder must test it before the final results are filed.

By 27 November Better has to hand Nasdaq a plan that names who sits on the audit committee. With two independent directors on a board of six and Gordon excluded, the plan needs three more names beyond the headline appointment. The Business Wire release of 15 October is only the first.