Muddle at MDC: CEO Runs the Board, Isn't an Employee and Still Took a Pay Cut

Last Updated Apr 28, 2010 3:01 PM EDT

MDC Partners (MDCA) CEO Miles Nadal took a pay cut in 2009, according to page 20 of this SEC filing, seeing his total compensation fall 16 percent to $7 million. (His pay is linked in part to revenue and net income, both of which were down last year.) But it's the background circumstances that are really interesting.

MDC -- which owns trendy ad agencies such as Crispin Porter + Bogusky and Kirshenbaum Bond Senecal + Partners -- is a quirky holding company, as it only takes part-ownership investments in its agencies instead of buying them outright. Those quirks extend all the way to the top: Nadal is not actually an employee of MDC, according to a footnote:
The personal services of our Chairman and CEO are provided to the Company through Nadal Management, Inc.
Nadal is also chairman of the board at MDC, which technically makes Nadal his own client -- a negotiating position that might come in useful when he negotiates his pay packet. Last year that packet included nearly $700,000 in perks, including:
  • a $58,542 interest benefit received on account of interest-free loans that were grandfathered under the Sarbanes-Oxley Act.
  • $140,854 for life insurance benefits
  • $500,000 for retirement benefits and employee health benefits.
  • Use of the corporate aircraft with a family member.
In return, Nadal gave back or compensated MDC for company-owned artwork that was "kept off the Company's premises at locations under Mr. Nadal's control."

Nadal told me recently that when MDC went public and bought his company, it technically bought his personal collection of Canadian art because he had neglected to transfer it out of his company prior to the sale. Last year he paid MDC $300,000 to retain the artwork he wanted and gave the rest to MDC. "Paying twice sucks," he said.

Related: Image by Flickr user Robert Scarth, CC.

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