It's Unlikely That Golan Renewable Industries Ltd's (TLV:GRIN) CEO Will See A Huge Pay Rise This Year

Key Insights

• Golan Renewable Industries will host its Annual General Meeting on 28th of September
• Total pay for CEO Reuven Alon includes ₪1.13m salary
• Total compensation is 649% above industry average
• Golan Renewable Industries' EPS declined by 16% over the past three years while total shareholder return over the past three years was 18%

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The share price of Golan Renewable Industries Ltd (TLV:GRIN) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 28th of September. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

See our latest analysis for Golan Renewable Industries

How Does Total Compensation For Reuven Alon Compare With Other Companies In The Industry?

According to our data, Golan Renewable Industries Ltd has a market capitalization of ₪363m, and paid its CEO total annual compensation worth ₪1.4m over the year to December 2024. That's a notable decrease of 17% on last year. In particular, the salary of ₪1.13m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Israel Building industry with market capitalizations below ₪667m, reported a median total CEO compensation of ₪180k. This suggests that Reuven Alon is paid more than the median for the industry. What's more, Reuven Alon holds ₪222k worth of shares in the company in their own name.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. Although there is a difference in how total compensation is set, Golan Renewable Industries more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Golan Renewable Industries Ltd's Growth

Over the last three years, Golan Renewable Industries Ltd has shrunk its earnings per share by 16% per year. In the last year, its revenue is up 9.1%.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Golan Renewable Industries Ltd Been A Good Investment?

Golan Renewable Industries Ltd has generated a total shareholder return of 18% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for Golan Renewable Industries (1 is potentially serious!) that you should be aware of before investing here.

Switching gears from Golan Renewable Industries, 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.