Shareholders May Be Wary Of Increasing Averbuch Formica Center Ltd.'s (TLV:AVER) CEO Compensation Package

Key Insights

• Averbuch Formica Center to hold its Annual General Meeting on 23rd of December
• Salary of ₪855.0k is part of CEO Simcha Averbuch's total remuneration
• The total compensation is 591% higher than the average for the industry
• Over the past three years, Averbuch Formica Center's EPS fell by 67% and over the past three years, the total loss to shareholders 54%

Shareholders will probably not be too impressed with the underwhelming results at Averbuch Formica Center Ltd. (TLV:AVER) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 23rd 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. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Averbuch Formica Center

How Does Total Compensation For Simcha Averbuch Compare With Other Companies In The Industry?

Our data indicates that Averbuch Formica Center Ltd. has a market capitalization of ₪87m, and total annual CEO compensation was reported as ₪985k for the year to December 2023. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is ₪855.0k, represents most of the total compensation being paid.

For comparison, other companies in the Israel Trade Distributors industry with market capitalizations below ₪718m, reported a median total CEO compensation of ₪143k. Hence, we can conclude that Simcha Averbuch is remunerated higher than the industry median. Furthermore, Simcha Averbuch directly owns ₪19m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	₪855k	₪813k	87%
Other	₪130k	₪191k	13%
Total Compensation	₪985k	₪1.0m	100%

Speaking on an industry level, nearly 94% of total compensation represents salary, while the remainder of 6% is other remuneration. Our data reveals that Averbuch Formica Center allocates salary more or less in line with the wider market. 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.

Averbuch Formica Center Ltd.'s Growth

Averbuch Formica Center Ltd. has reduced its earnings per share by 67% a year over the last three years. Its revenue is down 24% over the previous year.

Overall this is not a very positive result for shareholders. 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 Averbuch Formica Center Ltd. Been A Good Investment?

Few Averbuch Formica Center Ltd. shareholders would feel satisfied with the return of -54% over three years. 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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 1 which can't be ignored) in Averbuch Formica Center we think you should know about.

Switching gears from Averbuch Formica Center, 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.