Michael Weiner, CEO and co-founder of one of America's largest providers of pay-per-view TV pornography, was just terminated from the company he built, according to Deadline, largely without explanation.
Here are the five most important factors leading up to his dismissal:
- If the company hasn't sold by Dec.31, a representative from Longkloof—which owns 15.9 percent of the programmer’s shares—will join the New Frontier board.
- Longkloof agreed to drop a lawsuit and proxy contest when New Frontier agreed to review Longkloof's proposal as part of its process.
- The company is chronically unprofitable: It lost $3.5 million in FY 2012 on revenues of $41 million; sales were down from $49 million the year before.
- New Frontier's stock lost more than 78 percent of its value through the past five years — mainly due to increased competition from the internet.
- Ken Boenish resigned as president of New Frontier last August.
Boenish never gave a reason for his departure, but did walk away with a compensation package up to $948,700, according to BizJournal, and $30,000 a month to consult for the company and a promise "not to reveal trade secrets, compete against New Frontier Media or solicit its employees to leave the company."
The board is paying an even heftier price to terminate Weiner: According to company documents, Weiner will get at least $2.4 million if he is terminated without cause.
In Weiner's absence at New Frontier, the top job is being shared by New Frontier's CFO, Chief Legal Officer, and Chief Technology Officer. Alan Isaacman, a longtime director, replaced Weiner as chairman.
But with share prices up 33 percent so far in 2012, investors are hoping for a sale. New Frontier has already received bids from Longkloof as well as from Luxembourg-based Manwin, which purchased Playboy TV late last year.
Put that all together, and a cynic could be forgiven for speculating that the New Frontier board, sick of the company's financial decline, wanted to sell for a premium on NOOF stock, but that Weiner didn't want to give up the company he built to strangers.
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