PE investor and New Orleans-based hedge fund, Spear Point, which holds over 2% of the common stock of TheStreet, Inc. (NASDAQ:TST), has taken issue with the terms of employment of Jim Cramer, who also happens to be the company’s co-founder.  In a hard-hitting letter dated October 9 to TheStreet’s board, Spear Point said Cramer was overpaid, and had failed to deliver value to his shareholders.

Jim Cramer made millions while shareholders lost hundreds of millions

TheStreet employs Jim Cramer as a contributing writer, paying him over $1M annually. Cramer also appears on the company’s video clips. Spear Point claims the company paid Cramer more than $13 million in cash salaries and millions more by way of stocks and other benefits during the period 1999 through 2012. In an oblique allegation that Cramer enriched himself at the expense of the investors in his company, the hedge fund says shareholders lost nearly $400M during this period. Here’s how Spear Point illustrates its point graphically:

1-cramer-comp Jim Cramer

TheStreet, Inc. (NASDAQ:TST) went public in 1999 at $19, and is currently trading at just $2.28. For the six months ending June 30, it reported an operating loss of $3 million. Spear Point was previously frustrated in its efforts to take the company private for $2.80 per share.

Spear Point also demanded that an independent consultant be appointed to recommend the appropriate compensation to be negotiated by the Board when Jim Cramer’s employment contract comes up for renewal at the end of the year.

Jim Cramer: CNBC versus TheStreet

Jim Cramer also appears on CNBC’s blockbuster Mad Money show, and according to Spear Point this is to the detriment of TheStreet’s own video presence. “His presence on CNBC is becoming directly competitive to TheStreet, as the company continues to build its own video business,” alleges the letter.

“Furthermore, unless Mr. Cramer will agree to work directly for TheStreet and not for CNBC or another competitor, we believe he should resign from the Board of Directors immediately to eliminate any perceived and/or actual conflicts of interest. We would then encourage the Company to replace him on the Board with someone who will forcefully support the interest of Common Shareholders and has true independence. We have persistently asked the Board to hire an investment bank to seek strategic alternatives. We do so again today.”

Jim Cramer still holds about 6% of the company’s stock.

Divvy up TheStreet assets: Cramer vs. Non-Cramer

Spear Point even suggested that in the event a strategic sale of the TheStreet is not feasible, the company be split down the middle, and its assets be divided into in two: “a Cramer-related set of assets, and all the remaining assets. We believe the Company may be in a position to sell the Cramer-related assets to CNBC or one of its competitors and the remaining assets to the highest bidder.”