• by Larissa Faw , July 21, 2015

MDC said Monday that its CEO Miles Nadal had “retired” from the post, but a close reading of the severance agreement filed with the SEC on the same day (July 20) shows that’s not the case. 

That agreement specifically states that Nadal’s “voluntary resignation” is “without good reason” and “does not qualify for retirement treatment.” And being without good reason, Nadal loses out on a roughly $27 million severance deal that had been in force until he was ushered out of the company with a renegotiated exit package that offers no compensation and no severance money. 

Instead of receiving $27 million, Nadal is repaying the company more than $20 million — roughly split between retention bonuses that were paid but that he’s not staying around long enough to earn, and red-flagged expenses. MDC has said that the bulk of the expenses — $8.6 million — was repaid by the former CEO in the second quarter. He will repay an additional $1.88 million in disallowed expenses later this year. 

The $10 million-plus in retention bonus money will be repaid between now and 2017, according to Nadal’s separation agreement with the company. Unless there is a change of control in the company — and there is now speculation that could happen soon — in which case he has 10 days after the change in control is finalized to pay up. 

Apparently, Nadal will get to keep some unearned bonuses that were paid to him. The company said in its SEC filing that it expects to take a one-time charge in the third quarter “for the balance of prior cash bonus award amounts that will not be recovered by the repayment terms in the Separation Agreement.” 

The company also indicated that it will continue to provide Nadal indemnification and director and officer insurance coverage, which would come into play if Nadal is sued for actions taken while he was CEO and an MDC board member. 

In addition, Nadal has signed a non-disparagement and confidentiality agreement as part of his separation. 

Still, Nadal still has money to keep his lights on. Last year, MDC paid him $16.8 million, with $1.850 million in base salary and a bonus of $11.7 million. 

And while MDC and Nadal may have come to an agreement, the SEC investigation into his expenses and related matters -- including MDC’s accounting practices and stock trading activity -- remains ongoing.

As for the new CEO, Scott Kauffman, MDC Partners reports that the company does not yet have an employment agreement, but plans to enter into one “promptly.” 

Meanwhile, investors have expressed mixed feelings about these executive changes. Piper Jaffray upgraded its recommendation to "overweight" with a stock price target of $26. However, MDC stock trading on the NASDAQ Exchange closed today at $17.83, up a little more than 1% for the day but still hovering near its 365-day low.