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

The results at Kogan.com Ltd (ASX:KGN) have been quite disappointing recently and CEO Ruslan Kogan bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 24 November 2022. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Our analysis indicates that KGN is potentially undervalued!

How Does Total Compensation For Ruslan Kogan Compare With Other Companies In 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 this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$424k.

On examining similar-sized companies in the industry with market capitalizations between AU$148m and AU$590m, we discovered that the median CEO total compensation of that group was AU$1.2m. This suggests that Ruslan Kogan is paid more than the median for the industry. Moreover, Ruslan Kogan also holds AU$56m worth of Kogan.com stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

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.

Kogan.com Ltd's Growth

Over the last three years, Kogan.com Ltd has shrunk its earnings per share by 84% per year. It saw its revenue drop 8.0% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

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. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Kogan.com prefers rewarding its CEO through non-salary benefits. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO 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.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Kogan.com (free visualization of insider trades).

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.