Miles Nadal, a well known Toronto philanthropist, has agreed to pay back millions worth of perquisites that the company he leads, MDC Partners Inc., paid to him via his management company dating back to 2009.
MDC revealed the news in a regulatory filing this week, saying that the Securities and Exchange Commission requested documents last October on corporate governance practices at the company.
MDC is a holding company that owns minority stakes in marketing and ad firms including Veritas, Bruce Mau Design and dozens more.
In the filing, the company said the payments made to Nadal "included, among other things, travel and commutation expenses, charitable donations, medical expenses and certain expenses for which the information was incomplete."
The TSX-listed stock lost almost 30 per cent after the news came out, the worst one-day stock performance since October 2001. In the filing, MDC says it has implemented a new policy governing private aircraft use, travel and entertainment at the company.
The SEC is also seeking information from MDC on "goodwill and certain other accounting practices as well as information relating to trading in the company's securities by third parties." MDC says it continues to work with the SEC on the file, but says the payments and ongoing probe will "have no impact on the integrity of our current or previously reported financial statements."
Nadal owns three per cent of MDC's shares. He has been paid an average of $15.6 million by MDC in each of the past three years.
In addition to a salary, bonus and stock-based compensation, company filings reveal that last year he was entitled to more than $926,000 in additional perks including $263,000 in legal fees, $91,038 for use of the company's private jet, and $71,967 for the use of an apartment in New York City when he's in town on business.
The news on the payments was revealed in the company's quarterly earnings release, which revealed the company lost $32.1 million, or 65 cents a share during the quarter, an increase from $8.8 million. or 18 cents a share, a year earlier.