What Can We Make Of Kogan.com's (ASX:KGN) CEO Compensation?

This article will reflect on the compensation paid to Ruslan Kogan who has served as CEO of Kogan.com Ltd (ASX:KGN) since 2006. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Kogan.com.

See our latest analysis for Kogan.com

How Does Total Compensation For Ruslan Kogan Compare With Other Companies In The Industry?

According to our data, Kogan.com Ltd has a market capitalization of AU$1.9b, and paid its CEO total annual compensation worth AU$594k over the year to June 2020. Notably, that's an increase of 35% over the year before. In particular, the salary of AU$423.5k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the same industry with market caps ranging from AU$1.3b to AU$4.2b, we found that the median CEO total compensation was AU$1.4m. This suggests that Ruslan Kogan is paid below the industry median. Furthermore, Ruslan Kogan directly owns AU$285m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 65% of total compensation represents salary and 35% is other remuneration. Although there is a difference in how total compensation is set, Kogan.com more or less reflects the market in terms of setting the salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Kogan.com Ltd's Growth Numbers

Kogan.com Ltd's earnings per share (EPS) grew 91% per year over the last three years. Its revenue is up 14% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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?

Most shareholders would probably be pleased with Kogan.com Ltd for providing a total return of 151% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As we touched on above, Kogan.com Ltd is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Since EPS growth is heading in a positive direction; many would agree with our assessment that the pay is modest. And given most shareholders are probably very happy with recent shareholder returns, they might even think Ruslan deserves a raise!

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Kogan.com that investors should think about before committing capital to this stock.

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.

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This article by Simply Wall St is general in nature. 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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