Nick Molnar back as Afterpay appoints co-CEOs

Afterpay’s Nick Molnar is back in the CEO chair and will share the role with co-founder Anthony Eisen.

Anthony Eisen and Nick Molnar, co-founders and co-CEOs of market darling Afterpay.

Afterpay’s shares have dipped under the $100 mark as the tech darling announced Nick Molnar is back in the CEO chair and will share the role with co-founder Anthony Eisen.

Mr Molnar’s move to the top job comes less than 18 months after he stepped down from the CEO role, standing aside as Mr Eisen transitioned from executive chairman to CEO.

In a statement to the ASX ahead of Afterpay’s annual meeting, the company’s chairwoman Elana Rubin said the move to appoint joint CEOs would ensure an appropriate level of oversight, executive prominence and presence both internationally and domestically.

“As Afterpay continues to expand globally, the focus on its international operations has never been greater,” Ms Rubin said.

“As a board we believe this positions Afterpay strongly for the future and reflects our ongoing evolution globally.”

Afterpay shares fell 4 per cent to $97.30 in afternoon trade.

The CEO change was announced just one day after the corporate regulator published its review of the buy now, pay later industry, finding that the number of BNPL transactions nearly doubled in the 2018-19 financial year, and 21 per cent of users who were surveyed missed a payment over the same period.

Missed payment fee revenue for the six providers, including Afterpay, Zip, Humm and Openpay, totalled $43m, up 38 per cent compared to the previous financial year. Afterpay represented 27 per cent of BNPL-related consumer debt and 73 per cent of the total value of transactions over the year.

As co-CEOs, Mr Eisen and Mr Molnar will continue to share responsibility for executing on the $29bn company’s strategy and their performance will be measured on the same key objectives, Ms Rubin said.

Mr Molnar will return to the US “as soon as is practicable” and Mr Eisen will continue to be based in Australia.

The new co-CEOs said sharing the role made sense as the company executes its global expansion plans.

“Since we founded Afterpay we have always been aligned and excited about the opportunity to create a globally relevant, customer centric business. Not only are we well on our way to achieving this, we are accelerating our efforts to leverage the momentum we have generated.”

“The decision to become co-CEOs is a logical one considering our global expansion plans and ambitious long term goals. We are both committed to leading the business over the long term, and driving our strategy to continue generating value for our shareholders,” they said.

Mr Molnar and Mr Eisen will each take home $450,000 in salary and supperanuation each year and will need to give six months notice if they resign.

The news of Mr Molnar’s promotion came as the chairwoman and co-CEOs addressed shareholders at the annual meeting and ahead of a vote on executive remuneration and bonus payments.

In her speech to shareholders, Ms Rubin focused in part on regulation, saying it was a core focus for the business.

“We continue to engage with regulators and policy makers in all of our regions, to ensure they understand our differentiated service, and the customer protections inherent in our model. While we are at varying stages of engagement in each country, we make it clear that we support regulation that is fit for purpose, and delivers positive outcomes for consumers,” she said.

“ASIC’s report raised the potential for financial stress among users of different financial products categorised as buy now, pay later. We urge ASIC to continue their focus on this and extend it to all forms of payments,” Ms Rubin said.

Presenting as co-CEOs at the meeting, Mr Eisen and Mr Molnar said October was a record month for underlying sales globally for the company and that its November performance was tracking to be even stronger.

“We are pleased with how the business is tracking in the first six weeks of the second quarter,” they said.

“Instore sales in Australia and New Zealand continue to increase as a percentage of total sales, reaching 23 per centin recent weeks.

“Retailer and consumer demand for our offering internationally continues to be strong. The growth of new customers is accelerating since the end of the first quarter in both the US and UK as the pipeline of new merchants go live on our platform.”

There was no change to expectations on gross losses, net transaction losses and net transaction margins, they added.

As flagged by The Australian on Monday, the company also announced the launch of a new loyalty program, named Pulse Rewards, that will reward customers who pay on time.

“We know that Millennials and Gen Z are making conscious decisions to be more responsible with their finances by using debit rather than credit.

“We also know that customer loyalty is not purely a program, it’s a feeling delivered through experience. Our customers want to feel empowered in how they choose to spend their money and we are rewarding their positive behaviours,” Mr Eisen said.

Commenting on the company’s global expansion, Mr Molnar provided new figures that showed spending by Millennials is currently 2 per cent above pre-Covid levels in Australia.