Author Topic: SYTE - Enterprise Diversified  (Read 223754 times)

DooDiligence

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Healthcare 25.9% - CVS EW NVO // BRK.B - 23.1% // Auto's & Oil 15.0% - CLB GPC VDE

Entertainment 4.8% - DIS // Banking 9.9% - WFC // Drinkers & Smokers 4.9% - MO

%'s held @ MV 08/29/2019 minus 16.4% investable cash

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maybe4less

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Re: SYTE - Sitestar
« Reply #261 on: January 30, 2017, 01:28:01 PM »
Can anyone comment on this

http://www.inelegantinvestor.com/2017/01/30/steven-kiel-continues-enrich-pockets-sitestar-shareholders/

At the very least there seems to be a misunderstanding of how Dodd-Frank-mandated shareholder advisory votes on compensation work. They are backwards looking, so last year's annual meeting had to do with 2015's compensation, not 2016's or 2017's.

I'm also not sure why anyone would expect the CEO to work for free. Yes, he controls a lot of stock, but being the CEO of a public company is a lot more work than being a passive shareholder, regardless of how big the company it is. I don't think a relatively small salary is egregious.

DooDiligence

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Re: SYTE - Sitestar
« Reply #262 on: January 30, 2017, 01:48:55 PM »
Can anyone comment on this

http://www.inelegantinvestor.com/2017/01/30/steven-kiel-continues-enrich-pockets-sitestar-shareholders/

At the very least there seems to be a misunderstanding of how Dodd-Frank-mandated shareholder advisory votes on compensation work. They are backwards looking, so last year's annual meeting had to do with 2015's compensation, not 2016's or 2017's.

I'm also not sure why anyone would expect the CEO to work for free. Yes, he controls a lot of stock, but being the CEO of a public company is a lot more work than being a passive shareholder, regardless of how big the company it is. I don't think a relatively small salary is egregious.

Thanks (I was a bit surprised to see Inelegants article & was just curious to hear opinions...)

I was under the impression that these guys are really trying to sort out a mess & have good intentions.

Healthcare 25.9% - CVS EW NVO // BRK.B - 23.1% // Auto's & Oil 15.0% - CLB GPC VDE

Entertainment 4.8% - DIS // Banking 9.9% - WFC // Drinkers & Smokers 4.9% - MO

%'s held @ MV 08/29/2019 minus 16.4% investable cash

i trumpet my ignorance

https://twitter.com/tunawish

TBW

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Re: SYTE - Sitestar
« Reply #263 on: January 30, 2017, 01:49:33 PM »
Imo that blog post is just wrong. Steve Kiel will get 100k + 150k bonus if book value goes up 20% in a year. (Formula is 10x book value change - 5% hurdle x base salary).

To me that seems like a great deal for shareholders. I for one have been very impressed by what the guys have achieved so far.

That shareholder has had a problem from the start with new management. I think he is misguided. But time will tell.

Parsad

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Re: SYTE - Sitestar
« Reply #264 on: January 30, 2017, 01:56:09 PM »
Can anyone comment on this

http://www.inelegantinvestor.com/2017/01/30/steven-kiel-continues-enrich-pockets-sitestar-shareholders/

At the very least there seems to be a misunderstanding of how Dodd-Frank-mandated shareholder advisory votes on compensation work. They are backwards looking, so last year's annual meeting had to do with 2015's compensation, not 2016's or 2017's.

I'm also not sure why anyone would expect the CEO to work for free. Yes, he controls a lot of stock, but being the CEO of a public company is a lot more work than being a passive shareholder, regardless of how big the company it is. I don't think a relatively small salary is egregious.

That article is somewhat off the mark.  Not sure how much of a discount the shares were being bought for against market price, so I can't comment there.  In terms of salary, the number doesn't look egregious at all and his bonus is performance-based. 

Yes, he may be running his investment fund, but that doesn't mean that he isn't working hard at Sitestar.  I run Corner Market Capital, but I personally put in a lot of hours at PDH, at the expense of my evenings, leisure time, holidays and weekends.  You combine my time on CMC stuff and PDH stuff and I'm closing in on 90 hours per week!  To tell you the truth...running PDH is far, far more difficult and time-consuming than running an investment fund...simply due to all of the operations, components, employees, day to day stuff, etc. 

Cheers!
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Jurgis

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Re: SYTE - Sitestar
« Reply #265 on: January 30, 2017, 02:59:58 PM »
Can anyone comment on this

http://www.inelegantinvestor.com/2017/01/30/steven-kiel-continues-enrich-pockets-sitestar-shareholders/

At the very least there seems to be a misunderstanding of how Dodd-Frank-mandated shareholder advisory votes on compensation work. They are backwards looking, so last year's annual meeting had to do with 2015's compensation, not 2016's or 2017's.

I'm also not sure why anyone would expect the CEO to work for free. Yes, he controls a lot of stock, but being the CEO of a public company is a lot more work than being a passive shareholder, regardless of how big the company it is. I don't think a relatively small salary is egregious.

The salary is possibly not egregious.

The stock deals at 20-30% market price discounts to buddies is another question.
« Last Edit: January 30, 2017, 03:04:49 PM by Jurgis »
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InelegantInvestor

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Re: SYTE - Sitestar
« Reply #266 on: January 30, 2017, 03:08:09 PM »
Just got back to my desk and saw that my post had been posted here, and commented upon. I appreciate everyone's perspective and I will attempt to respond with my own thoughts.

I understand how Dodd/Frank works. I do, however, think that it is curious that rather than award Mr. Kiel a compensation package before the annual meeting so that shareholders might give their input, the company allowed the annual meeting to pass with him receiving no salary and only grant him one afterwards. Also, though it is modest, he is being doubly compensated as funds that he manages own the majority of the company's equity.


Thanks (I was a bit surprised to see Inelegants article & was just curious to hear opinions...)

I was under the impression that these guys are really trying to sort out a mess & have good intentions.

I can't speak to their intentions, just to their actions. Mr. Kiel wanted majority control of the company. In order to get it, rather than purchasing shares on the open market, he issued shares to his funds at well below what it would have cost him to buy those shares on the market. Shareholders were not willing to sell him their voting rights at $.048 a share. There is an alternate history where Mr. Kiel could have chosen to work with existing shareholders rather than seize control from them. He did not, despite, in my case, multiple offers.

That article is somewhat off the mark.  Not sure how much of a discount the shares were being bought for against market price, so I can't comment there.  In terms of salary, the number doesn't look egregious at all and his bonus is performance-based. 

Yes, he may be running his investment fund, but that doesn't mean that he isn't working hard at Sitestar.  I run Corner Market Capital, but I personally put in a lot of hours at PDH, at the expense of my evenings, leisure time, holidays and weekends.  You combine my time on CMC stuff and PDH stuff and I'm closing in on 90 hours per week!  To tell you the truth...running PDH is far, far more difficult and time-consuming than running an investment fund...simply due to all of the operations, components, employees, day to day stuff, etc. 

Cheers!
Parsad, I appreciate your response. As a shareholder of PDH, I have no problem with your compensation- but it was an arrangement I entered into knowingly when I purchased my shares. When Mr. Kiel, et. al. were selling themselves shares at $.048, the market bid and ask were each above $.08. If Mr. Kiel wanted full control of the company, he should have paid a premium to that- not received a discount. Further, given that he is compensated by investors in his funds for managing the capital that he has invested in SYTE, he is getting paid twice for managing the same money.
The issue here is not about Mr. Kiel's results or what he deserves, but how he went about it. You very publicly split with Mr. Biglari when he began taking by force things that he could have gotten cooperatively had he just tried. Mr. Kiel chose to take what he wanted rather than allow the owners of the company to decide on their future. That is really my objection here.



To me that seems like a great deal for shareholders. I for one have been very impressed by what the guys have achieved so far.

That shareholder has had a problem from the start with new management. I think he is misguided. But time will tell.
I do have a problem with this management, but not from the start. I was quite supportive of them, in fact. My problem began when Mr. Kiel decided he needed a public company vehicle and created one against the interests of outside shareholders.

InelegantInvestor

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Re: SYTE - Sitestar
« Reply #267 on: January 30, 2017, 03:10:14 PM »

The salary is possibly not egregious.

The stock deals at 20-30% market price discounts to buddies is another question.
I don't think the salary is egregious in and of itself. I think that looking at it as part of a series of events that willfully disregards shareholder input gives it a very different color.

Parsad

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Re: SYTE - Sitestar
« Reply #268 on: January 30, 2017, 03:10:40 PM »
Can anyone comment on this

http://www.inelegantinvestor.com/2017/01/30/steven-kiel-continues-enrich-pockets-sitestar-shareholders/

At the very least there seems to be a misunderstanding of how Dodd-Frank-mandated shareholder advisory votes on compensation work. They are backwards looking, so last year's annual meeting had to do with 2015's compensation, not 2016's or 2017's.

I'm also not sure why anyone would expect the CEO to work for free. Yes, he controls a lot of stock, but being the CEO of a public company is a lot more work than being a passive shareholder, regardless of how big the company it is. I don't think a relatively small salary is egregious.

The salary is possibly not egregious.

The stock deals at 20-30% market price discounts to buddies is another question.

20-30% discounts?  That isn't ethical.  If they are issuing such huge discounts, then the placement should be open to all shareholders.  Cheers!
No man is a failure who has friends!

InelegantInvestor

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Re: SYTE - Sitestar
« Reply #269 on: January 30, 2017, 03:14:53 PM »
Can anyone comment on this

http://www.inelegantinvestor.com/2017/01/30/steven-kiel-continues-enrich-pockets-sitestar-shareholders/

At the very least there seems to be a misunderstanding of how Dodd-Frank-mandated shareholder advisory votes on compensation work. They are backwards looking, so last year's annual meeting had to do with 2015's compensation, not 2016's or 2017's.

I'm also not sure why anyone would expect the CEO to work for free. Yes, he controls a lot of stock, but being the CEO of a public company is a lot more work than being a passive shareholder, regardless of how big the company it is. I don't think a relatively small salary is egregious.

The salary is possibly not egregious.

The stock deals at 20-30% market price discounts to buddies is another question.

20-30% discounts?  That isn't ethical.  If they are issuing such huge discounts, then the placement should be open to all shareholders.  Cheers!
Exactly! Especially for a control position. Mr. Kiel claimed on this thread that the intrinsic value was lower than the market price- that is entirely irrelevant.