The Kogan.com board has decided to issue cash payments to CEO Ruslan Kogan and CFO David Shafer for driving the business over the last four years.
Kogan is expected to receive around $9.3 million, while his colleague Shafer should receive around $6.2 million.
In May 2020, the company announced a range of executive retention options, which were then passed at its 2020 annual general meeting.
Under its executive incentive plan, the board - excluding the executive directors - chose to pay both senior executive leaders instead of allocating shares.
The payment is based on the current market price - $7.90 at the time of announcement - less the exercise price of $5.29 that would otherwise have been payable in respect of the exercise of the options.
Chairman Greg Ridder said he and the Kogan.com board congratulate Kogan and Shafer on crystallising value in their options, and thanked them both for stewarding the company over the past four years.
“The business has evolved since 2020 through the growth of the Kogan Marketplace and advertising platform, the scaling of the Kogan FIRST loyalty program, the acquisition and integration of Mighty Ape, Matt Blatt and Brosa, and the refocusing on higher quality, recurring platform-based revenue," Ridder said.
“The business today has a strong balance sheet and a strong and growing competitive moat in the form of its loyal membership base. The board looks to the future with confidence.”
Outside of its marketplace, which sells fashion and accessories among a larger array of retail goods, Kogan.com also covers energy, mobile, internet, and insurance, handles third-party and exclusive brands, and operates New Zealand gaming marketplace Mighty Ape.
Over the past four years, Kogan.com has increased its platform-based gross sales contribution from 36 per cent in FY20 to 63 per cent in the first half of FY24.
Despite recording a total sales fall in the first half of FY24 of $26.2 million to $446.6 million compared to the first half of FY23, the company lifted its gross profit by 61.9 per cent to $66.9 million in the same period.
It also recorded a 241.1 per cent lift in earnings before interest, tax, depreciation, and amortisation (EBITDA) to $15.7 million - both excluding Mighty Ape.
The company grew its cash balance to $83.3 million after investing over $17.2 million for Kogan.com’s share buy-back during the half, as well as settling the final Mighty Ape tranche payment of $10.9 million in October 2023.