The founder of online retailer Kogan scored a pay rise of $15.2 million, according to the Australian Financial Review’s latestCEO Salary Survey, which put him in fifth place, after coming in sixth in 2021.
However, it comes after months of instability for the e-commerce site, which has been hit by supply chain issues and slumping profits as well as two highly publicised investor strikes over pay.
In November 2021, angry investors slammed Kogan’s executive pay packages in the wake of a massive share price plunge, with almost 42 per cent voting against the company’s remuneration report – the second year in a row a board spill motion was on the cards.
But the board survived, and also managed to avoid a third consecutive pay strike at its latest annual general meeting this year, in which Kogan acknowledged the “significant challenges” facing the firm.
Kogan’s very fat pay package comes after the company forecast underlying earnings of just $21.7 million in the first half of the 2022 financial year, less than half of a year prior.
But once the actual results came through in February, it was revealed that underlying earnings were actually far lower at $17.4 million.
Just two months later, the company made another gloomy statement, acknowledging that “sales growth moderated in line with industry trends following the strong acceleration over the initial Covid-19 period”.
But the company’s founder insisted Kogan would soon see “increased spending on our platform” despite the tough economic conditions – only for the company to inform investors in August of a $35.5 million loss in 2022, and with Kogan now recording a share price more than 63 per cent lower than at the start of this year.
In January 2021, the site also copped a huge $310,000 fine after breaking Australian spam laws. More than 42 million marketing emails were sent by Kogan but customers found it difficult to unsubscribe.
Kogan required consumers to set up a password and log into an account if they wanted to stop receiving the emails – which the Australian watchdog found was illegal.
The Australian Communications and Media Authority (ACMA), was forced to launch an investigation after it had alerted Kogan to the issue multiple times.
But despite that blow, the following month, Ruslan Kogan splashed a combined $15 million on luxurious neighbouring Mornington Peninsula properties in Victoria.
He spent $12.91 million on a Stephen Akehurst-designed manor on 5.2ha on Musk Creek Road, Flinders, and also secured an adjoining 4.38ha property for $2.09 million.
Meanwhile, in July this year it emerged that the former rich lister’s personal fortune had been slashed from $183.6 million last year to just $44.1 million in 2022.
Details of Kogan’s 2022 pay comes amid backlash over jewellery company Lovisa’s CEO pay, after it was revealed by the AFR on Friday that new boss Victor Herrero was on an eye-watering $21 million a year.
Macquarie Group boss Shemara Wikramanayake is the only Australian chief executive to surpass that number.
Mr Herrero’s salary revelation comes just a week after a law firm announced it was investigating whether to launch a class action against Lovisa over wage theft allegations from former staff members.
Mr Herrero has only been Lovisa’s CEO for a year, after he replaced outgoing chief executive officer Shane Fallscheer, who had worked in that role for 12 years.
Originally published as Kogan CEO pockets 70 per cent pay rise despite falling profits, pay strikes