I have made no secret of my displeasure with Steven Kiel. Having never faced a vote by Sitestar(SYTE) shareholders, Steven Kiel became a Board member through a settlement and CEO when the Board fired previous management. He then added his supporters to the Board, sold shares to his fund and his friends at below market prices. This massive dilution gave him over 50% voting control of the company, without paying any control premium. Only after he had seized control and cemented it did he allow for a vote of shareholders. That vote, though it didn’t matter, showed that a significant percentage of outside shareholders disapproved of Steven Kiel’s leadership.
Steven Kiel was unchastened by this show of disapproval. He once again sold himself and friends shares at below market prices. Now he has decided to give himself a salary. He has also decided to continue permanently as CFO, though just a few months ago he publicly stated that the company would be hiring a full time CFO. Four months ago, at the company’s annual meeting, shareholders were asked to vote on an executive compensation package that included no salary for Steven Kiel. What has chnaged in the last 4 months that suggests that the Board and Mr. Kiel once again bypass shareholders?
Steven Kiel has a large direct economic interest in the company. Directors receive no compensation. Running the company is not his full time or primary job, as evidenced by the bio posted for the recent Best Ideas Conference at which he spoke,
Steven Kiel is the president and chief investment officer of Arquitos Capital Management. He is the portfolio manager of Arquitos Capital Partners, a private investment partnership focused on value-oriented holdings. Steven is a judge advocate in the Army Reserves. He is a veteran of Operation Iraqi Freedom and currently holds the rank of major. Prior to launching Arquitos Capital Management, he was a lawyer in private practice. He has been quoted in The Wall Street Journal, Bloomberg, MarketWatch, Deal Journal, The Atlantic, USA Today, and other publications. Steven is also the CEO of Sitestar, where he sits on the board, and an advisor to Santa Monica Partners, a New York-based investment partnership. Steven is a graduate of George Mason School of Law and Illinois State University, and is a member of the bar in Illinois (inactive) and Washington, D.C.
Being CEO of Sitestar is about the last thing listed. This compensation is another step in what seems to be Steven Kiel’s long term plan to divert all economic benefit from Sitestar’s outside shareholders to himself, his fund and his friends. How disappointing that someone who has served his country so honorably has now chosen such a dishonorable path!
Disclosure: The author has a position in SYTE, but has been selling and will continue to sell shares.
Thanks for shedding some light on this fraud!
We agreed!
I’m a stock holder and I sure am happy to have Steven Kiel watching out for my interests. He is a class act of the highest order and has done more to turn Sitestar around than the previous management for the past 10 years.
John-
I’m truly glad that you are happy as a shareholder. I obviously disagree with your assessment, though I will agree that he is an improvement over previous management. That is a very, very low bar.
A more friendly way to get rid of your shares is to sell them to me for 4 cents per share.
That’d probably be easier than trashing he stock publicly, to try and force it down, so that you can sell out your shares at a discount.
Why would I sell you shares at 4 cents when they are worth more than that? I’m not trashing the stock, I’m calling out the egregious behavior of the CEO. There is a big difference. Ethics matter.
These articles are not even credible.
You clearly have an axe to grind or some personal vendetta. The man worked for the company for quite some time with no salary at all. I don’t do that. Am I unethical? If I wanted to be fairly compensated for my hard work would that be unethical? Do you work for free?
He has skin in the game, both in donated time and brain damage as well as his own money, he also attracted capital to this company that is an order of magnitude greater than it ever would have had without him here, so the future is looking much brighter from everything I can see.
You are twisting his show of good faith by working a long stretch of time without any pay, into some sort of ethics violation? Seriously?
Are you blind?
Am I blind? While I am quite nearsighted, with corrective lenses, my vision is reasonably good.
I might ask the same question of you, because you are entirely missing the point. You asked if I would sell my shares for $.04. The answer is the same reason that I wouldn’t have diluted my stake by selling tens of millions of shares at $.048- the price that Mr. Kiel felt it was appropriate to sell himself tens of millions of shares and acquire a majority stake in the company without paying a control premium. He would claim that it was necessary to discount because they are restricted shares. I would, in turn, say that on the contrary, he should have paid a control premium, not a discount, and that the company’s only need for capital, was his need for a control vehicle.
I don’t object, per se, to him taking a salary, but, again, the way it was done. Why wasn’t it done before the shareholder vote on executive compensation? His skin in the game should be a counter argument to a salary, btw, as he is already being paid by his fund investors to manage this capital.
Again, the ends do not justify the means.
You believe I have a personal vendetta. I assure that I don’t. I am allergic to unethical behavior and believe, in the words of Louis Brandeis that “Sunlight is said to be the best of disinfectants”