We Think Amiad Water Systems Ltd.'s (TLV:AMD) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Amiad Water Systems' Annual General Meeting to take place on 22nd of June
• Salary of US$359.0k is part of CEO Dori Ivzori's total remuneration
• The overall pay is 37% above the industry average
• Amiad Water Systems' EPS declined by 57% over the past three years while total shareholder loss over the past three years was 44%

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Shareholders will probably not be too impressed with the underwhelming results at Amiad Water Systems Ltd. (TLV:AMD) recently. At the upcoming AGM on 22nd of June, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Amiad Water Systems

Comparing Amiad Water Systems Ltd.'s CEO Compensation With The Industry

At the time of writing, our data shows that Amiad Water Systems Ltd. has a market capitalization of ₪238m, and reported total annual CEO compensation of US$415k for the year to December 2024. That's slightly lower by 4.8% over the previous year. We note that the salary portion, which stands at US$359.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Israel Machinery industry with market capitalizations below ₪724m, we found that the median total CEO compensation was US$304k. Hence, we can conclude that Dori Ivzori is remunerated higher than the industry median. What's more, Dori Ivzori holds ₪470k worth of shares in the company in their own name.

On an industry level, around 83% of total compensation represents salary and 17% is other remuneration. Amiad Water Systems is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Amiad Water Systems Ltd.'s Growth

Over the last three years, Amiad Water Systems Ltd. has shrunk its earnings per share by 57% per year. In the last year, its revenue is up 5.8%.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Amiad Water Systems Ltd. Been A Good Investment?

With a total shareholder return of -44% over three years, Amiad Water Systems Ltd. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Amiad Water Systems you should be aware of, and 2 of them are potentially serious.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.