Kogan.com’s co-founders just scored a $75 million windfall as shareholders revolt against executive pay
Ruslan Kogan, CEO of Kogan.com, and his co-founder and CFO David Shafer has scored $75 million windfall after shareholders voted narrowly in favour of granting the duo 6 million share options at a fraction of the current share price.
At today’s AGM, the deal, struck in May when the share price sat at $5.29, was approved by a 56% majority.
But Kogan shareholders are clearly not happy with executive pay at the online retailer, delivering a “first strike” blow against the remuneration report, with nearly 44% of the vote opposed to the remuneration report.
Proxy advisers had recommended against the report as well as the share allocation to Kogan and Shafer.
Under the ‘two strikes’ rule, shareholders must approve the remuneration report by 75%. With Kogan.com shareholders expressing a high level of displeasure, the company’s 2021 remuneration report must explain whether their concerns have been addressed and if a ‘second strike’ vote happens at the 2021 AGM, it would trigger a spill meeting of the board.
Shareholder activist Stephen Mayne stood for election as a non-executive director but did not have board endorsement. He received a 14% yes vote.
Kogan (ASX: KGN) fell under $18 in the wake of the AGM to close the day down more than 4.5% to $17.50.
But the lift in the share price over the last six months leaves the duo with a Kogan and Shafer sharing a windfall of around $75 million on the strike price of $5.29. Kogan, who owns around 15% of his eponymous business, will receive 3.6 million options, and Shafer, with a 5% stake, 2.4 million.
The deal is a sweetener to keep them both in the company until at least August 2023. The options are now worth more than $100 million in total.
The exercise price of $5.29 was calculated on the volume-weighted average price between February and April, which spans the period when the market tanked as Covid-19 hit and Australian states when into a range of lockdowns.
In his address to shareholders today, Ruslan Kogan said the company had “thrived through adversity”.
“We delivered strong growth in the business in the midst of an extremely turbulent and challenging period for the world, the country and the Company,” he said.
“We have built a diversified and resilient business over many years, which has enabled us to help Australians in their time of need.”
Source: Startups – Startups Daily