We Think Shareholders May Want To Consider A Review Of Ashtrom Group Ltd.'s (TLV:ASHG) CEO Compensation Package

Key Insights

• Ashtrom Group to hold its Annual General Meeting on 7th of August
• CEO Gil Gueron's total compensation includes salary of ₪2.68m
• Total compensation is 214% above industry average
• Ashtrom Group's EPS declined by 40% over the past three years while total shareholder loss over the past three years was 24%

Shareholders will probably not be too impressed with the underwhelming results at Ashtrom Group Ltd. (TLV:ASHG) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 7th of August. 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 Ashtrom Group

Comparing Ashtrom Group Ltd.'s CEO Compensation With The Industry

According to our data, Ashtrom Group Ltd. has a market capitalization of ₪4.9b, and paid its CEO total annual compensation worth ₪4.5m over the year to December 2023. We note that's a decrease of 44% compared to last year. We note that the salary of ₪2.68m makes up a sizeable portion of the total compensation received by the CEO.

On examining similar-sized companies in the Israel Construction industry with market capitalizations between ₪3.8b and ₪12b, we discovered that the median CEO total compensation of that group was ₪1.4m. Accordingly, our analysis reveals that Ashtrom Group Ltd. pays Gil Gueron north of the industry median. Furthermore, Gil Gueron directly owns ₪36m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	₪2.7m	₪2.5m	59%
Other	₪1.9m	₪5.6m	41%
Total Compensation	₪4.5m	₪8.1m	100%

Speaking on an industry level, nearly 63% of total compensation represents salary, while the remainder of 37% is other remuneration. Ashtrom Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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 Ashtrom Group Ltd.'s Growth Numbers

Over the last three years, Ashtrom Group Ltd. has shrunk its earnings per share by 40% per year. In the last year, its revenue is down 9.6%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Ashtrom Group Ltd. Been A Good Investment?

Since shareholders would have lost about 24% over three years, some Ashtrom Group Ltd. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

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, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for Ashtrom Group (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Ashtrom Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com