Record inflation has left millions of workers financially worse off than before covid. But although real wages have dropped, CEO pay has soared, with many executives capitalizing on post-pandemic growth to justify increases to their own compensation – all while corporate America brags about how virtuous it is with bogus ESG scores and other “wokescreens.”
Sometimes the problem begins and ends there, but history tells us that companies that marginalize employees are usually the first to engage in other bad business practices. The conduct of one boss, United Wholesale Mortgage (UWM) CEO Mat Ishbia demonstrates how blatant disregard for worker wellbeing can be symptomatic of deeper rot beyond run-of-the-mill greed.
Ishbia is a self-styled corporate maverick who takes pride in making “tough” decisions that ostensibly weaker competitors won’t. The facade has generally been successful – he won a Wall Street Journal puff piece for losing 500 employees over a draconian return-to-office policy – but hard facts show him to be anything but an effective leader.
At the very least, Ishbia is a prolific self-dealer. UWM’s 2021 Annual Report and 2022 Proxy Statement reveal that, while the company was hemorrhaging employees in 2021, his compensation increased by $600,000 to a total of $7.8 million. By comparison, the median UWM worker earns under $40,000, barely half of what employees make at competitor Rocket Companies where the CEO earns just one-fifth of what Ishbia does. UWM also implemented a 10-cent quarterly dividend in 2021, rewarding shareholders with an atypically high dividend yield of 11% as of Q3 2022 even as net revenue has plummeted by more than 50%.
This might all be excusable if:
1) Mat Ishbia wasn’t one of three members of UWM’s compensation committee and the company’s only executive to earn more in 2021 than in 2020;
2) Mat, his father, and his brother didn’t sit on UWM’s board and weren’t major individual beneficiaries of the dividend (Mat holds a majority of the company’s voting shares); and,
3) Mat and his father didn’t own the property that UWM leases for its company campus, which employees are required to work five days a week despite an ongoing health and safety investigation over repeat covid outbreaks.
In short, virtually every major corporate decision Ishbia makes is designed to benefit him and his family to the detriment of UWM as a whole.
Although this kind of Taliban-style nepotism is strictly legal, Ishbia’s proclivity for putting his personal interests ahead of those of his employees gives credence to reports of other indiscretions. Among the most concerning and credible of these relates to his ongoing relationship with disgraced mortgage executive Anthony Casa.
Casa, a longtime friend, and business partner of Ishbia’s, was Chairman of the Association of Independent Mortgage Experts until he was forced to resign after sending degrading, libelous texts to colleagues suggesting Ishbia once sexually assaulted the wife of a Rocket Companies executive. If – and of course due diligence demands we say if – the story was true, the victim would have been 11 at the time.
After being forced out, Casa founded a new company, UMortgage, which connects affiliated loan originators to lenders. Ishbia, unscathed by the scandal and apparently unbothered by Casa’s behavior, appears to be working with UMortgage to increase UWM’s market share in lieu of building a successful business model.
Despite Ishbia’s claim to support independent mortgage professionals – UWM purports to be “The Independent Mortgage Broker’s #1 Advocate” – he has a record of trying to kill the inter-lender competition that brokers rely on, Last year, UWM issued an unprecedented ultimatum to brokers: cut ties with our competitors or lost our business. After that tactic failed, it seems Ishbia turned to Casa to funnel business to UWM through UMortgage.
No linkage between UWM and UMortgage is advertised, but a close look at corporate records reveals a web of connections. UMortgage, registered in Michigan as Premier Processing, was incorporated by a former consultant at UWM’s predecessor with the help of an attorney at Ishbia’s father’s law firm. Today, UWM has deep ties to UMortgage’s loan originators, including one who was personally mentored by Ishbia and another who refers to UWM as “home.” Considering how quickly Casa bounced back to launch a new company after his fall from grace, it is highly unlikely that these connections are coincidental or that Ishbia risked getting involved without receiving preferential treatment in return.
Ishbia was recently quoted as saying that he has “no regrets” about how he conducts business. That may be true, but only because no one has held him accountable. Others may question his dubious history with employees, funneling revenue to his family, partnering with reprobates, and employing underhanded tactics to undermine competition.
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