The U.S. Securities and Exchange Commission (SEC) announced Tuesday that Miles Nadal, the former CEO of New York-based marketing company MDC Partners Inc., agreed to pay US$5.5 million to settle charges that he failed to fully disclose the compensation he received from the firm.
Nadal agreed to pay US$1.85 million in disgorgement plus US$150,000 in interest, and a US$3.5 million penalty, while also being banned from serving as an officer or director of a public company for five years. He consented to the SEC’s order without admitting or denying its findings.
According to the order, the MDC’s annual filings reported that Nadal received an annual perk allowance of US$500,000 in his role as chairman and CEO. However, the SEC’s investigation found that the company also, “paid for Nadal’s personal use of private airplanes as well as charitable donations in his name, yacht and sports car expenses, cosmetic surgery, and a wide range of other perks,” without properly disclosing this to shareholders, the regulatory says in a statement.
In total, Nadal received an additional US$11.285 million in perks beyond his disclosed compensation. “He has since resigned and returned US$11.285 million to the company,” the SEC says.
“Perks paid to corporate executives should be properly disclosed so that investors can make informed decisions,” says Jeffrey Boujoukos, director of the SEC’s Philadelphia office, in a statement. “Nadal improperly received and failed to disclose millions of dollars in compensation.”
Earlier this year, MDC Partners agreed to pay a US$1.5 million penalty for its role in failing to properly disclose his compensation.