When the final tally is released, WPP is expected to report that CEO Martin Sorrell earned somewhere in the neighborhood of $100 million for managing the holding company last year. But new MDC Partners chief Scott Kauffman will earn a small fraction of that for his stewardship of the much smaller MDC. In 2015 he received a compensation package totaling $3.26 million, a mix of salary, bonus and stock awards.
That’s according to MDC’s just released proxy statement in advance of the firm’s upcoming annual meeting scheduled for June 1 in New York City. Kauffman replaced Miles Nadal last July as CEO under the cloud of an ongoing SEC investigation probing the firm’s accounting and trading practices. Nadal has already agreed to pay back millions to the company in bogus expense charges and unearned incentive bonuses.
For the final seven months of his tenure as CEO Nadal received nearly $2 million in total compensation, down quite a bit from the nearly $15 million he received in 2014 and $30.5 million he garnered in 2013.
Kauffman’s base pay was increased to $1.2 million effective January 1 (up from a little more than $500,000) and he is eligible to receive an annual discretionary bonus in a target amount equal to 100% of his base salary, as determined by the Compensation Committee. Kauffman also received a grant of 100,000 shares of MDC restricted stock on August 26, 2015.
Under his new agreement, however, Kauffman is forgoing many benefits enjoyed by his predecessor. In 2015, Kauffman continued to receive a monthly perquisite allowance in an amount equal to $6,250; however, as of January 1 of this year, he no longer receives any perquisite allowance. Kauffman has also declined to participate in some of the company's other benefits, including disability and group life insurance.
He has also been grounded from using work-related private aircraft. Beginning in 2014 and during the first six months of 2015 under former CEO Nadal, MDC chartered an airplane and helicopter owned by entities controlled by Nadal and leased to an independent corporate aircraft management company. In the first and second quarter of 2015, MDC paid a total of $397,767 for these services. However, promptly following Nadal’s departure MDC prohibited the use of private aircraft travel by its directors and executive officers.
Last year, the company also paid Nadal-owned Union Advertising Canada, Peerage Realty Partners and Peerage’s subsidiary, Baker Real Estate Incorporated some $130,662 for various projects.
While MDC did not comment on the ongoing SEC investigation, through December 31, 2015, Nadal has repaid MDC for improper expenses, in an aggregate amount of $11.29 million. Nadal further agreed to repay the company $10,581,605 in connection with prior cash bonus awards that contained claw-back provisions.
According to the proxy, MDC’s other most highly compensated executives were: CFO David Doft ($1.12 million); CMO Robert Kantor ($1.13 million), and MDC Partner Network CEO/Crispin Porter CEO Lori Senecal ($1.88 million).