Shareholders May Not Be So Generous With Bank Leumi le-Israel B.M.'s (TLV:LUMI) CEO Compensation And Here's Why

Key Insights

• Bank Leumi le-Israel B.M's Annual General Meeting to take place on 8th of October
• Total pay for CEO Hanan Friedman includes ₪3.16m salary
• The overall pay is 257% above the industry average
• Bank Leumi le-Israel B.M's EPS grew by 21% over the past three years while total shareholder return over the past three years was 50%

Performance at Bank Leumi le-Israel B.M. (TLV:LUMI) has been reasonably good and CEO Hanan Friedman has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 8th of October. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Bank Leumi le-Israel B.M

Comparing Bank Leumi le-Israel B.M.'s CEO Compensation With The Industry

At the time of writing, our data shows that Bank Leumi le-Israel B.M. has a market capitalization of ₪54b, and reported total annual CEO compensation of ₪3.8m for the year to December 2023. That's a modest increase of 6.9% on the prior year. In particular, the salary of ₪3.16m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Israel Banks industry with market capitalizations over ₪30b, the reported median total CEO compensation was ₪1.1m. This suggests that Hanan Friedman is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	₪3.2m	₪3.0m	84%
Other	₪622k	₪586k	16%
Total Compensation	₪3.8m	₪3.5m	100%

On an industry level, roughly 59% of total compensation represents salary and 41% is other remuneration. It's interesting to note that Bank Leumi le-Israel B.M 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.

Bank Leumi le-Israel B.M.'s Growth

Over the past three years, Bank Leumi le-Israel B.M. has seen its earnings per share (EPS) grow by 21% per year. Its revenue is up 7.3% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Bank Leumi le-Israel B.M. Been A Good Investment?

Boasting a total shareholder return of 50% over three years, Bank Leumi le-Israel B.M. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Bank Leumi le-Israel B.M that investors should think about before committing capital to this 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.