Wage growth may be in the doldrums, but not, it seems, for the employees of Dr Adir Shiffman's Catapult. The sports device maker spent more than half its revenues on wage costs, including share allocations to staff, over the financial year just ended. That's $31.6 million, up from $11.3 million a year earlier. Off a net loss and just $60.8 million in revenue.
Shiffman, a serial entrepreneur, said acquisitions pushed the headcount from 145 to 300 over the year, which is behind the increase. In Catapult's defence, while wage costs have tripled, revenues have quadrupled. Shiffman's pay rose from $289,500 to $457,556 in total – mostly due to a big bonus he got after the company completed two acquisitions.
Funnily enough, only three days ago Shiffman had a piece in this newspaper vividly describing how a previous start-up of his ran out of cash because he didn't fire staff fast enough as revenues fell.
"As a doctor I saw many diabetic patients with gangrenous toes that needed amputation," he wrote. "The challenge for the surgeon is where to amputate. If only the toes are amputated, the patient often returns with a gangrenous foot – and now the foot needs to go. Then this process continues, on up the leg, always one cut behind."
Told you it was vivid. Not that we're suggesting Catapult is diabetic, or, um, gangrenous. Its share price though is less than half what it was a year ago. But Shiffman claims the share price has "decoupled" from the business' performance, and that new overseas investors agree. Guess we'll let the passage of time sort out that one.
