MDC Partners issued its latest proxy statement this week and not surprisingly, Scott Kauffman, the company’s CEO through December 31, 2018, was the highest compensated executive at the firm last year.
He raked in about $1.2 million in salary, while forfeiting a stock award of $1.3 million.
He also received a very handsome severance payout — an additional $3.6 million in cash, which he received in March.
The company reported Kauffman’s salary was about 15 times the median of the annual base salary compensation of the firm’s 6,000-plus employees last year.
For many companies, that gap is much wider. Still, some investors probably wonder what Kauffman did to earn his paycheck. Well, a big part of what he did was deal with the big steaming pile of a mess left by his predecessor Miles Nadal, who was forced out in 2015 after taking millions from the company that didn’t rightfully belong to him.
Nadal landed the company in hot water with the feds for accounting violations and other transgressions.
Dealing with that train wreck and growing the company proved to be a pretty tall order.
Now, the firm is off to a fresh start with a new chairman-CEO Mark Penn, and a refreshed board of 10 directors. Check out the new slate in the firm’s proxy. Interestingly, all but Penn are independent directors.
If Penn’s going to make any serious dough at MDC, the company’s performance will have to improve substantially, as much of his comp will be tied to boosting results. His base salary is just $750,000, significantly lower than Kauffman’s $1.2 million base.
He sounds like a man with a plan, so we’ll see how it goes. He’s already received a so-called “inducement” grant of 1,500,000 stock appreciation rights that he can cash in (with the usual provisos) over the next several years at an exercise price of $2.19, about where the stock has been trading in recent weeks.
Hard to believe a few years back MDC was fetching a price of $28 plus. Something to strive for in the Penn era.