A Quick Analysis On 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out 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$2.3b, and paid its CEO total annual compensation worth AU$594k over the year to June 2020. That's a notable increase of 35% on last year. We note that the salary portion, which stands at AU$423.5k constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the industry with market capitalizations between AU$1.4b and AU$4.5b, we discovered that the median CEO total compensation of that group was AU$1.8m. In other words, Kogan.com pays its CEO lower than the industry median. Moreover, Ruslan Kogan also holds AU$336m worth of Kogan.com stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 63% of total compensation out of all the companies we analyzed, while other remuneration made up 37% of the pie. According to our research, Kogan.com has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Kogan.com Ltd's Growth Numbers

Kogan.com Ltd has seen its earnings per share (EPS) increase by 91% a year over the past three years. Its revenue is up 14% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Kogan.com Ltd Been A Good Investment?

We think that the total shareholder return of 444%, over three years, would leave most Kogan.com Ltd shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar 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. Considering robust EPS growth, we believe Ruslan to be modestly paid. And given most shareholders are probably very happy with recent shareholder returns, they might even think Ruslan deserves a raise!

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Kogan.com that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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