bebe, Come Back

Thanks to Foolish community member Jeff Van Dyke (also known as TMFLurch around Fooldom), those of us who follow bebe Stores (Nasdaq: BEBE) can chew on an interesting tidbit revealed in an SEC filing. The company's chairman and co-founder, Manny Mashouf, is apparently getting back in the game at bebe.

More Manny, more money
According to an 8-K filing on Nov. 5, Mashouf -- who in 2006 voluntarily reduced his base salary to $120,000 from $500,000 -- will now have a larger salary, because he's back in the "design lab." Mashouf will receive $368,000 and a raised bonus target rate to 70% of that base salary (he waived bonuses in 2005, 2006, and 2007).

Flash back to this time last year, when bebe's vice chairman and design maven Neda Mashouf resigned from the company -- and divorced her husband, Manny. (This wasn't disclosed until January 2007.) Neda was previously highlighted as a key employee at bebe, and bebe's performance since her departure could certainly imply the truth of that.

Manny Mashouf is now chairman of Biba, a retail chain that has relaunched in London (it was haute couture in the '60s and '70s). Given his role with that company, one might have suspected that Manny wouldn't return to a hands-on approach at bebe anytime soon.

Manny Mashouf's theoretical return to the design helm should be good news, right? It complements the idea that bebe needs to get back to its roots. Said roots were amply discussed in the company's earnings conference call a couple days ago; the words "sexy" and "sexiest" were repeated often, as management sought to shore up confidence that the retailer would return to its traditional core style. (Strangely enough, no one ever mentioned Manny Mashouf's return.)

On that note, several things about bebe are starting to bug me a bit. With earnings and the 8-K filing mere days apart, you'd think there'd be some mention in the call about what the company co-founder's return means. In addition, bebe's seen management changes in merchandising during the past year, including the addition of Erin Stern. The new divisional president of bebe Sport previously worked for Gap's (NYSE: GPS) Old Navy's merchandise division, before boarding bebe last summer. Are more changes in store as the company tries to win back customers' good graces?

All in the family
There have always been family-operated businesses, but concerns about possible nepotism can  trouble investors. Manny Mashouf has two sons and a nephew working at bebe, and there's always the risk of family feuds or divorces distracting them from their business. (Besides, such favoritism doesn't always select the best-qualified candidates for a job, nor direct funding to the most prudent projects.) Consider the well-publicized feud between Viacom's (NYSE: VIA) Sumner Redstone and his daughter Sheri, or last May's somewhat sketchy news that Google (Nasdaq: GOOG) had purchased a minority stake in a biotech start-up co-founded by Sergey Brin's new wife.

Of course, family ties in public companies aren't too uncommon. I should know -- I'm a shareholder of Urban Outfitters (Nasdaq: URBN), where co-founder and President Richard Hayne's wife Meg is also an important executive. (The company's Free People concept is apparently her passion). Such close relationships are no reason to sell your stock, but Fools are definitely reasonable to recognize the inherent risk in these types of arrangements.

Getting back to bebe ...
Why are significant updates, like Neda's departure or Manny's return, so often buried in bebe's SEC filings, rather than being disclosed more openly in press releases? As optimistic as I've been about bebe in the past, I'm always annoyed when shareholders have to dig for important information. (In fairness, Fools, it's our responsibility to keep tabs on our companies' SEC filings, since some firms only disclose key items there.) Since insiders hold the majority of bebe's shares -- a stake admittedly diminished by the Mashoufs' divorce -- perhaps they feel that the remaining shareholders can like this approach or lump it.

I can see why many investors consider bebe a bargain right now, and this Motley Fool Stock Advisor pick does have a tradition of being well-run. However, I'd like to see more transparency from the company, and less of a tendency to keep things "all in the family." I'm keen to see what customers make of bebe's new merchandise -- and whether further executive shuffles await us -- now that the company's co-founder seems to have resumed a hands-on design role.

Related Foolishness:

• bebe, Wake Up From Your Nap
• bebe, Busted Again
• bebe Boom: Fool by Numbers