We Think SHL Telemedicine Ltd.'s (VTX:SHLTN) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• SHL Telemedicine will host its Annual General Meeting on 7th of December
• CEO Erez Nachtomy's total compensation includes salary of US$346.6k
• The overall pay is comparable to the industry average
• Over the past three years, SHL Telemedicine's EPS fell by 7.2% and over the past three years, the total loss to shareholders 20%

Shareholders will probably not be too impressed with the underwhelming results at SHL Telemedicine Ltd. (VTX:SHLTN) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 7th of December. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for SHL Telemedicine

How Does Total Compensation For Erez Nachtomy Compare With Other Companies In The Industry?

Our data indicates that SHL Telemedicine Ltd. has a market capitalization of CHF118m, and total annual CEO compensation was reported as US$427k for the year to December 2022. That's a slight decrease of 7.3% on the prior year. In particular, the salary of US$346.6k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Switzerland Healthcare industry with market capitalizations below CHF175m, reported a median total CEO compensation of US$351k. So it looks like SHL Telemedicine compensates Erez Nachtomy in line with the median for the industry.

Component	2022	2021	Proportion (2022)
Salary	US$347k	US$344k	81%
Other	US$80k	US$117k	19%
Total Compensation	US$427k	US$461k	100%

Talking in terms of the industry, salary represented approximately 51% of total compensation out of all the companies we analyzed, while other remuneration made up 49% of the pie. It's interesting to note that SHL Telemedicine pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at SHL Telemedicine Ltd.'s Growth Numbers

Over the last three years, SHL Telemedicine Ltd. has shrunk its earnings per share by 7.2% per year. It saw its revenue drop 3.9% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has SHL Telemedicine Ltd. Been A Good Investment?

With a three year total loss of 20% for the shareholders, SHL Telemedicine Ltd. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for SHL Telemedicine (of which 2 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.