Social network Bebo, which AOL sold turnaround specialist Criterion partners, is being sued by its shareholders.According to the suit, one of their complaints is that the CEO is paying himself too much: $14,000 a month, or $168,000 a year.
If that’s too much for a CEO, things must be going very badly!
You can only use off-by-a-mile traffic measuring site Compete.com for directional purposes, but in this case, it makes Bebo’s direction perfectly clear: down and to the right.
The plaintiffs are a group of investors Criterion brought on after buying the site, including Bebo cofounder Michael Birch and Silicon Valley angel investor Ron Conway’s firm, SV Angel.
- Criterion has “exploited” Bebo and has been “fraudulent” by “using its operating capital to pay the salaries of Criterion’s staff”, including $14,000 per month to Levin.
- Criterion has “withheld” Bebo financial operation details from shareholders.
- Bebo has “operated for 20 months and has failed to hold a single board meeting or shareholder meeting”, including one to discuss “a decision to pass on opportunities to sell the company and realise shareholder value”.
- Bebo’s reputation is being hurt by racking up defaults for failing to respond to lawsuits. Bebo defaulted on its San Francisco lease and moved to Criterion’s Los Angeles HQ without board or shareholder approval.