Miles Nadal CEO of MDC Partners: Steps Down to Retire
– Will Miles Nadal of MDC Partners Be Indicted? –
Allison & Partners, Sloane & Company, HL Group & Kwittken are among the PR firms whose owner is being investigated by the SEC. According to Ad Week, “In October, the SEC requested information about MDC Partners reimbursements for Nadal’s medical expenses, travel and commuting costs, along with charitable and other unspecified expenses, all of which reportedly “lacked appropriate substantiation over the six-year period from 2009 to 2014.
According to the holding company’s 2015 proxy statement, a document required by the SEC to keep investors informed of financial details, Nadal received $926,005 in company-paid expenses last year to help support his Bahamas-based lifestyle.”
Nadal recently agreed to repay $8.6 million worth of expenses charged to the company.
An industry consultant we spoke with, who asked not to be named, noted this will have an effect on MDC Partners in more ways than one.
“When MDC buys PR firms or ad agencies, payment comes in part, in stock. With this revelation, it seems as if Miles Nadal was borrowing from the pockets of those whose firms he purchased. If there would have been millions more in profit, would not the stock have listed higher?
How To Measure MDC Partners Going Forward
This raises questions for those who sold or would sell their firms to MDC. Namely, what are the effects of this ordeal on future sales choices? Perhaps the answers lie in the motivations behind those firms MDC Partners already purchased.
For Allison & Partners LLC, a communications firm, creativity is number one priority. Since their founding in 2001, the firm applied this strategy, with great success. They are experts in corporate communications, technology, healthcare, social impact, consumer marketing, and healthcare. They put these skills to work in New York, Washington D.C., Atlanta, Phoenix, San Diego, Seattle, and Los Angeles.
Allison & Partners Have Serious Fame
The firm’s industry recognition before joining MDC Partners is impressive. Holmes Report named them “2010 Agency of the Year” among agencies below $25 million in revenue. Later, they also earned PRWeek’s “2010 Honorable Mention for Mid-Sized Agency of the Year.” Additionally, O’Dwyers ranked them among the top ten largest independent PR firms by fee revenue. Such outstanding accolades are the result of leveraging social media to engage consumers with brands on deep, visceral levels. Two well-known clients are MySpace and YouTube.
Why Allison & Partners joined Nadal
The firm’s CEO, Scott Allison, praised the May sale. “This strategic partnership is an exciting next step in our development, allowing us to maintain our management independence while providing additional resources and expertise to help us grow at an accelerated rate. In MDC Partners, the chemistry was right from day one, where we found kindred spirits who share our vision of the PR and public affairs agency of the future.”
The firm’s Co-Founder, Andy Hardie-Brown, added: “MDC Partners truly gets our entrepreneurial culture. This partnership is the best of both worlds for our clients and employees, providing the best of both worlds for our clients and employees, providing the platform to provide superior service in a rapidly-changing, and increasingly complex, environment. MDC and Allison & Partners share a passion for great talent delivering extraordinary work.”
So, it seems for two heads of the firm, a sense of entrepreneurial solidarity and kinship provided the grounds for sale. But MDC Partners’ ability to quicken their rise to new technological and social levels also proved worthy enticement.
Sloane & Company and Outstanding Outreach
This major firm dates back to 2008. They represent the very best in strategic communications and are based out of New York City. They offer expertise in public affairs, financial communications, multinational organizations, and crisis communications. New York Life, T. Boone Pickens, Walgreens, Medtronic, Business Bermuda, and TiVo are some of their established blue chip clients.
Accolades for Sloane & Company
The firm has earned exceptional recognition for industry performance. Around 2010, The Holmes Report named them “Crisis Agency of the Year.” B-to-B Magazine also honored their Chief Executive Officer, Elliot Sloane, naming him a leader in B-to-B Marketing. The agency’s expertise in crisis management is an essential skill in public relations.
MDC Partners’ 2010 Acquiring Sloane & Company
Of the sale, Sloane said, “[t]his strategic partnership with MDC is great validation for our business and represents the next chapter in our firm’s’ history…MDC Partners, through its perpetual partnership program, has a long track record of successfully investing in and mentoring top-tier firms, providing resources and expertise in a wide array of areas. MDC truly shares our unwavering commitment to our people and our focus on only doing excellent work. We think that our future is extremely bright, and this new partnership will provide us with the tools to service our clients with the greatest expertise.”
The ability to integrate a working formula for employing excellent tactics in sensitive PR situations into a higher-stakes business environment drives Sloane & Partners. MDC Partners committed to enhancing their capabilities by introducing them to a more challenging marketing environment.
Miles Nadal said of the acquisition: “[s]maller entrepreneurial firms that are empowered to think differently, have the ability to do brilliant work and want to share the wealth, are the best partners for us.” This, unfortunately, reads like a dark foreshadowing in Sloane & Company’s case. Regardless, the smaller firm did achieve its greater aim of growing in a new environment.
HL Partners: Superior Ethics Despite Nadal
This firm specializes in strategic marketing and communications. Clients of the firm work in fashion, beauty, travel and hospitality, lifestyle, interior design, social media, and many other fields. In October 2013, the National Council on Alcoholism and Drug Dependence’s inaugural gala at New York’s Waldorf-Astoria named Hamilton South honoree. This suggests HL Group has rigid ethical and moral standards. MDC Partners’ Nadal ordeal is doubtless a blemish on their record. But the benefits of greater reach the parent firm gives HL Partners is also doubtless.
Kwittken & Company: A Pro
Founded a little over ten years ago, Kwittken racked up significant recognition. Within two years of their founding, The Holmes Report named them “Best New PR Agency of 2006.” The next year, PRWeek honored Kwittken with the title “Best Small PR Agency” in the nation. This is easy to accept because the firm strives to balance creativity, talent, intelligence, passion, and connections. Clients are hard pressed to find a PR agency with strengths in all five sectors of excellence.
But the more serious questions remain: Will the clients doing business with MDC care they were paying for Nadal’s personal life? There’s an SEC investigation – will he be fined? Indicted? Who knows.”
This is not the first time Nadal has courted controversy — a previous Business Insider feature noted, “This CEO Lost $77 Million, So He Got An $18 Million Raise.”
We spoke to a number of MDC Partner employees but were unable to have anyone agree to speak on the record. Those we spoke with noted Nadal was charismatic, likable, and gregarious.
One wonders, since his salary from MDC totaled $16.8 million in 2014, including salary, bonus, and stock, why is he taking even more from the company pot?
We will continue to report on this matter. We invite MDC Partner firms to share information with us confidentially for publication.
Update 7/20/2015:
Recently announced, Miles Nadal stepped down his CEO and board position at MDC Partners to retire, as per their press release. In the release, the appointed CEO Scott Kauffman had this to say of Nadal’s time at MDC:
“Miles Nadal founded MDC Partners and for more than three decades guided the Company’s strong growth. Without his vision and leadership, MDC Partners would not have achieved the exceptional success we enjoy today. The Company is strategically well placed to remain on a path of profitable growth and is in a very strong financial and operational position. I look forward to leading the Company through its next phase of growth.”
