Insiders at Nu Skin Enterprises (NUS) have certainly found plenty of ways to plunder the company coffers. Our first insight into this family free-for-all came in the recent 8-K that the Company filed to announce the appointment of former CEO Steven Lund to the Board. In the filing, the Company disclosed that it

leases corporate offices, a distribution center, and certain other property pursuant to lease agreements with two entities, Scrub Oak, Ltd. and Aspen Country LLC, which are owned by Steven J. Lund and the following executive officers and directors of the Company and respective family members: Blake M. Roney, Sandra N. Tillotson, and Brooke B. Roney. In 2005, the Company incurred lease charges totaling approximately $2.7 million and $1.3 million, respectively, to Scrub Oak and Aspen Country.

Those are some hefty lease payments going to related parties. Makes you wonder what other pots the Nu Skin crew have their fingers in. Quite a few, according to the Company’s most recent proxy

• We periodically charter air service from a charter company, Keystone Aviation LLC, in which Blake M. Roney, our Chairman of the Board, currently owns a 51% interest. In 2005, we paid $850,336 to this charter company."
• Jose Ferreira, Jr., a director of our company, was the President and Chief Executive Officer of the Woodclyffe Group, LLC until October 2005, which performed consulting work for us for a monthly retainer of $22,500 plus a daily rate per consultant for time above the contractual commitment. A total of $191,072.51 was paid for services provided by the Woodclyffe Group in 2005."
• "We currently employ two brothers and two brothers-in-law of Blake M. Roney, who each make in excess of $60,000 per year. One of Mr. Roney’s brothers, Brooke Roney, currently serves as a senior corporate officer and his compensation for 2005 (consisting of salary, bonuses, perquisites and tax-gross-ups) totaled $584,834. We paid the other relatives of Mr. Roney an aggregate of $363,205 in salary and bonuses for 2005."
• "We pay commissions to, as independent contractors or distributors, two sons-in-law of Sandie Tillotson, who each make in excess of $60,000 per year. We paid one of these individuals an aggregate of $743,394 and the other individual an aggregate of $164,676 in commissions in 2005."

Finally, the pièce de résistance:  "During 2005, certain of our employees provided various personal services for Blake M. Roney, his brother Brooke Roney, Sandie Tillotson, and various entities owned by these individuals. The personal services included the provision of tax, financial, maintenance, courier and various other services."

Insiders come up with creative ways to fatten their wallets and get their employees to count their money for them?  Sounds like Nu Skin shareholders are getting skinned alive.

Posted in Buried treasure, Perk city, The family business

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