Kogan share price dips as controversial options grant is carried
We look at some of the key developments made during Kogan’s AGM, held on Friday, November 20.
Kogan share price plunges as options grant is passed
Critics swooped on fast growing e-commerce company Kogan (ASX: KGN) in the lead up to its AGM, as a result of a controversial options scheme.
Under this scheme, the Board proposed that CEO and Founder Mr Ruslan Kogan and COO David Shafer would receive 3.6 million and 2.4 million retention options, respectively, at a strike price of $5.29 – in a package valued north of $130 million. At Kogan’s last traded price of $17.73, these options are well in the money.
One of the reasons behind the grant of these options, noted the company, was due to the 'exceptional total shareholder returns that Mr Kogan and Mr Shafer have been instrumental in creating.’ Beyond that it was noted that both the CEO and COO's renumeration packages have declined over the last three fiscal years, and that their past renumeration packages were lower than executives at peer companies.
For reference, between July 2016 and September 2020, the Kogan share price has gained 1,138%, far outpacing the 33% delivered by the ASX 200 Accumulation Index.
Despite that outperformance under the watchful eye of Kogan and Shafer, some, such as Stephen Mayne, have been vigorously opposed the grant of these options. Mr Mayne noted concern over recent insider sales, the 'unfair scaling back' of the 2020 SPP, and the 'lack of a clear majority of independent directors who will prioritise capital raising allocations to retail shareholders and also resits inappropriate incentive allocations to the executive directors.'
Despite such protests, the scheme was passed at today’s AGM, with the 6.0 million retention options being granted to both Mr Kogan and Mr Shafer. Despite passing with a majority, the results, which saw 42.51% and 42.56% vote against the motions for Mr Kogan and Mr Shafer respectively, suggest the discontent amongst shareholders over the scheme.
Mr Mayne, who was also in the running to be elected to the Kogan board, was unsuccessful in his bid, attracting just 14% of the vote.
As Friday's session drew to a close, the Kogan share price had begun to nose dive, trading down 4.47% to $17.51 per share by 3:30.
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