Shareholders May Find It Hard To Justify Increasing Brand Group (M.G) Ltd's (TLV:BRND) CEO Compensation For Now

Key Insights

• Brand Group (M.G) will host its Annual General Meeting on 31st of December
• CEO Yaron Szilas' total compensation includes salary of ₪1.19m
• The total compensation is similar to the average for the industry
• Brand Group (M.G)'s EPS grew by 56% over the past three years while total shareholder loss over the past three years was 29%

In the past three years, the share price of Brand Group (M.G) Ltd (TLV:BRND) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 31st of December could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Brand Group (M.G)

How Does Total Compensation For Yaron Szilas Compare With Other Companies In The Industry?

According to our data, Brand Group (M.G) Ltd has a market capitalization of ₪150m, and paid its CEO total annual compensation worth ₪1.8m over the year to December 2023. We note that's a decrease of 14% compared to last year. In particular, the salary of ₪1.19m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Israel Construction industry with market capitalizations below ₪729m, we found that the median total CEO compensation was ₪1.9m. This suggests that Brand Group (M.G) remunerates its CEO largely in line with the industry average.

Component	2023	2022	Proportion (2023)
Salary	₪1.2m	₪1.3m	65%
Other	₪627k	₪843k	35%
Total Compensation	₪1.8m	₪2.1m	100%

On an industry level, around 63% of total compensation represents salary and 37% is other remuneration. There isn't a significant difference between Brand Group (M.G) and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Brand Group (M.G) Ltd's Growth

Over the past three years, Brand Group (M.G) Ltd has seen its earnings per share (EPS) grow by 56% per year. In the last year, its revenue is down 11%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Brand Group (M.G) Ltd Been A Good Investment?

With a three year total loss of 29% for the shareholders, Brand Group (M.G) Ltd would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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 3 warning signs for Brand Group (M.G) (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Brand Group (M.G), 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.