Shareholders Approve Controversial $110m Bonus For Kogan Bosses
The shareholders of online retailer Kogan.com have voted to approve a controversial $110 million bonus share grant to the company’s founder Ruslan Kogan and CFO David Shafer.
Proxy firms warned shareholders against the huge renumeration scheme in the lead up to the Annual General Meeting, labelling the deal as “excessive”.
But in today’s AGM shareholders narrowly approved the grant, with a razer thin majority of 57.5% voting in favour.
During the meeting, chairman Greg Ridder praised the investors who voted to approve the grant, according to the Sydney Morning Herald.
“They, like your board, believe that having Ruslan and David – in my view the two best ecommerce operators in Australia – retained, motivated and aligned to drive another three and a half years of growth is in the best interests of all shareholders,” Ridder said.
Nearly half of shareholders, 43.7%, opposed the renumeration scheme. This is well above the 25% threshold required for it to be labelled a ‘first strike’.
Ridder pledged during the meeting to elect an independent director for Kogan.com within the next two months.
A trading update was also provided at the AGM, revealing Kogan’s sales had doubled in the period of July to October and gross profit had been boosted by over 130%.
Kogan shares fell slightly at midday on Friday after the meeting wrapped up to $18.11.
Speaking to The Australian in October, Ridder said Kogan and Shafer had run the $2.58bn company for the last four years with little personal ROI and described them as “the best technology retailers in Australia”.
Kogan and Shafer are major shareholders in Kogan and Ridder says the long-term cash incentive, in the form of 6 million shares, was imperative to keep them in the business.
“I want to know that Ruslan is there to drive the hardest driving performance, and he is the smartest guy in the room, he is there to drive that value for all of us. [We are] making sure there are big incentives for a big outcome,” Ridder told the publication.
“These guys have been working for close to nothing in the four years they have been with the company. (In) Ruslan’s cohort of comparable companies that the independent expert drew in this, he was the lowest-paid executive among 16 entities and yet was the second highest performing of all those entities.”