Advertising Age reported MDC Partners approved six-figure “retention incentive” bonus awards for five honchos, contingent in part on the executives staying with the White holding company through any successful deal in 2019. Outgoing MDC CEO Scott Kauffman will not receive a special payment—but MDC CFO David Doft apparently talked his way toward a bonus.
Okay, the following comments are obvious—and have been noted by others—yet seem worth publicly airing.
First, given that Kauffman already deemed the company’s Q1 performance “unacceptable,” doling out big rewards to the key
Second, the company’s history with financial shenanigans makes these exclusive bonuses a PR nightmare—at least to anyone purporting to hold character, ethics and integrity.
Third, it’s outrageous that White advertising agencies within the White holding company were denied the chance to buy themselves back and bail out. Some folks can’t pay to leave, and others are getting paid to stay. Is it any wonder that MDC is quite possibly the worst of the major holding companies?
Fourth, this scenario underscores the morale-sapping, corrupt nature of the advertising industry. Corporate leaders net bonuses that waaaaay exceed the annual salaries of the majority of MDC employees—many of whom will likely soon get laid off with minimal severance pay.
Fifth, it’s more than a little ironic that Alex Bogusky—who has routinely displayed disdain for corporate crookedness—agreed to return to the MDCesspool. Or is Bogusky just another part of the problem? Bogusky recently proclaimed, “All our wounds are self-inflicted.” How prophetic.
Finally, the scenario actually poses possibilities for diversity. While an acquisition/takeover would probably accelerate Kauffman’s departure—eliminating the man who declared, “I’m intolerant of intolerance”—the arrival of Accenture could spark change, as the professional services firm did rank at number 41 on Fortune’s “The Best Workplaces For Diversity” list for 2018.perpetrators performers is, well, unacceptable.
MDC will pay six-figure incentive to five execs to stay on until it closes a deal
Payment pact covers sale of company or assets, direct investments and capital markets offering
By Megan Graham
The board of MDC Partners has approved a one-time “retention incentive” award for five senior executives of the company that is conditional on continued employment through the successful closing of a significant transaction in 2019, according to an SEC filing Friday evening.
MDC Partners said in September that it was exploring potential strategic alternatives that could include the sale of the agency holding company, whose portfolio includes 72andSunny, Anomaly, Assembly and Doner.
The filing said that on Dec. 11, the Human Resources and Compensation Committee of MDC’s board of directors approved the awards for executives with the exception of outgoing CEO Scott Kauffman. Exec VP and chief financial officer David Doft and Exec VP and general counsel Mitchell Gendel will receive awards of $650,000. David Ross, Exec VP of strategy and corporate development, will receive an award of $500,000. The amounts are equal to the “applicable executive’s respective target annual bonus award for 2018.”
Payment of the awards is conditional on continued employment “through the successful closing of a significant transaction in 2019,” which would include a change in control of the company or the sale of assets, direct investment or “a capital markets offering with aggregate proceeds to the company from any such transaction equal to not less than $100 million,” the filing says.
“An executive will forfeit the 2018 Retention Award in the event that he or she resigns without good reason or is terminated for cause prior to a Payment Event,” the filing says.
MDC shares closed Friday at $2.90, down five cents for the day. MDC traded around $10 at the beginning of the year.
Representatives from MDC Partners did not immediately respond to a request for comment.
In late November, MDC Partners shareholder FrontFour — which says it owns 5.1 percent of the holding company — in an SEC filing “stressed the importance of shareholder representation” on the board to better align its perspectives with that of MDC’s shareholders “particularly at this critical juncture.” FrontFour claims MDC’s board has rejected its requests.
MDC currently has a market cap—total value of its shares—of about $170 million.
Contributing: Bradley Johnson
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