By Bethany McLean

(FORTUNE Magazine) – ALONG THE WAY TO BECOMING ONE of America's richest men, Chicago financier Sam Zell--best known as the mastermind behind publicly traded REITs--has made plenty of other investors rich as well. So why did an investor named Bobby Melnick, who runs hedge fund Terrier Partners, recently describe himself as "absolutely miffed" and accuse Zell of behaving in a "petty, egregious fashion"?

The nasty words involve Rewards Network, a small Chicago company that sells loyalty programs. Zell began buying its stock in 1997 and now controls 26%. The stock has struggled: After shooting up to around $17 in the fall of 2003, the stock plummeted to $5.

Perhaps understandably, investors are grouchy--and not just about the stock. When Zell got involved, Rewards Network began paying a Zell-controlled entity, Equity Group Investments, $250,000 a year for "financial consulting and investment advisory services." After getting complaints, the company terminated that arrangement as of September 2004. Fast- forward to spring 2005, when the proxy came out. There, in fine print, was the news that Zell, who previously had gone unpaid, was now getting--yup--$250,000 to serve as chairman. Now, you could argue Zell's time and wisdom is worth $250,000. Zell didn't comment, but newly hired CEO Ron Blake said, "Sam is very involved in the company." But not everyone sees it that way. On the company's first-quarter conference call, Melnick noted that "micro-cap investors read the proxy statements," and called the payment "outrageous, petty, egregious, and counter to the interests of our company." Guess that's how the rich get richer. -- Bethany McLean