We Think Some Shareholders May Hesitate To Increase Mizrahi Tefahot Bank Ltd.'s (TLV:MZTF) CEO Compensation

Key Insights

• Mizrahi Tefahot Bank to hold its Annual General Meeting on 3rd of December
• Total pay for CEO Moshe Lari includes ₪3.13m salary
• Total compensation is 254% above industry average
• Mizrahi Tefahot Bank's total shareholder return over the past three years was 57% while its EPS grew by 19% over the past three years

Performance at Mizrahi Tefahot Bank Ltd. (TLV:MZTF) has been reasonably good and CEO Moshe Lari 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 3rd of December. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Mizrahi Tefahot Bank

Comparing Mizrahi Tefahot Bank Ltd.'s CEO Compensation With The Industry

At the time of writing, our data shows that Mizrahi Tefahot Bank Ltd. has a market capitalization of ₪42b, and reported total annual CEO compensation of ₪4.6m for the year to December 2023. That's a fairly small increase of 4.6% over the previous year. Notably, the salary which is ₪3.13m, represents most of the total compensation being paid.

For comparison, other companies in the Israel Banks industry with market capitalizations above ₪29b, reported a median total CEO compensation of ₪1.3m. Hence, we can conclude that Moshe Lari is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	₪3.1m	₪3.0m	69%
Other	₪1.4m	₪1.4m	31%
Total Compensation	₪4.6m	₪4.4m	100%

On an industry level, roughly 59% of total compensation represents salary and 41% is other remuneration. It's interesting to note that Mizrahi Tefahot Bank pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Mizrahi Tefahot Bank Ltd.'s Growth Numbers

Over the past three years, Mizrahi Tefahot Bank Ltd. has seen its earnings per share (EPS) grow by 19% per year. In the last year, its revenue is down 3.1%.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Mizrahi Tefahot Bank Ltd. Been A Good Investment?

Boasting a total shareholder return of 57% over three years, Mizrahi Tefahot Bank Ltd. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are 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. We've identified 1 warning sign for Mizrahi Tefahot Bank that investors should be aware of in a dynamic business environment.

Important note: Mizrahi Tefahot Bank is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.