The three co-founders of an Internet start-up about to go public hastily resigned yesterday amid questions about their extravagant compensation and lifestyle.
The creators of the Digital Entertainment Network – who still own over 70 percent of the company – announed they were leaving the fledgling operation early yesterday evening, after the company was asked about their status by The Post.
Marc Collins-Rector, chairman of the board, stepped down along with Executive Vice-President and co-founder Chad Shackley.
Eighteen-year-old Brock Pierce – a director and executive vice president who helped develop the idea of the company – also left the company.
As The Post reported earlier this month, Hollywood insiders were buzzing about the high salaries at the start-up when SEC filings revealed the top four execs at the company paid themselves a combined $3.7 million a year, not including bonuses, warrants, stock options and advances.
The 146-employee company – which makes TV-style shows for its own website – has lost $27 million since its inception and has not pulled in a single dollar of revenue, the filing said.
Chase Manhattan’s Chase Capital Partners and the Cassandra Group – run by Dana Giacchetto, the financial adviser to stars like Leonardo DiCaprio – have put significant investments into the company through an entertainment venture capital partnership.
Cassandra and Chase each own 8.09 percent of the company and have representation on the board.
Sources have told The Post the buttoned-down types on the board were less than pleased with the free-spending ways and Hollywood lifestyle of Shackley, 24, and Collins-Rector, 39.
The pair live together in a mansion in Encino that used to belong to notorious Death Row records exec Suge Knight, who is now in jail.
“I’ve spent some time at the Playboy mansion and this place makes it look like a trailer,” said one insider.
A spokesman for DEN said she had not heard of any dissatisfaction with the three departed execs on the part of the board.
Jim Ritts, formerly head honcho of the Ladies Professional Golf Association and now CEO of DEN, will replace Collins-Rector as chairman of the board.
In a statement, the company said Collins-Rector – who also started Concentric Networks – had left to pursue another start-up.
A spokesman for the company did not know if the departing trio would receive severance pay.
Pierce – who hooked up with Shackley and Collins-Rector when he was 17 – was on a yearly salary of $250,000 and had signed an agreement with the company to stay until 2002.