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It Looks Like Kogan.com Ltd's (ASX:KGN) CEO May Expect Their Salary To Be Put Under The Microscope

Shareholders will probably not be too impressed with the underwhelming results at Kogan.com Ltd (ASX:KGN) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 24 November 2022. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Kogan.com

Comparing Kogan.com Ltd's CEO Compensation With The Industry

At the time of writing, our data shows that Kogan.com Ltd has a market capitalization of AU$380m, and reported total annual CEO compensation of AU$15m for the year to June 2022. We note that's an increase of 70% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$424k.

On comparing similar companies from the same industry with market caps ranging from AU$148m to AU$590m, we found that the median CEO total compensation was AU$1.2m. Accordingly, our analysis reveals that Kogan.com Ltd pays Ruslan Kogan north of the industry median. Furthermore, Ruslan Kogan directly owns AU$56m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2022

2021

Proportion (2022)

Salary

AU$424k

AU$424k

3%

Other

AU$15m

AU$8.6m

97%

Total Compensation

AU$15m

AU$9.0m

100%

On an industry level, roughly 48% of total compensation represents salary and 52% is other remuneration. Interestingly, the company has chosen to go down an unconventional route in that it pays a smaller salary to Ruslan Kogan as compared to non-salary compensation over the one-year period examined. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

Kogan.com Ltd's Growth

Over the last three years, Kogan.com Ltd has shrunk its earnings per share by 84% per year. In the last year, its revenue is down 8.0%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Kogan.com Ltd Been A Good Investment?

With a total shareholder return of -47% over three years, Kogan.com Ltd shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Kogan.com primarily uses non-salary benefits to reward its CEO. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Kogan.com.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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