It's Unlikely That Israel Shipyards Industries Ltd's (TLV:ISHI) CEO Will See A Huge Pay Rise This Year

Key Insights

• Israel Shipyards Industries to hold its Annual General Meeting on 7th of August
• Total pay for CEO Zvi Schechterman includes ₪1.74m salary
• The total compensation is 526% higher than the average for the industry
• Israel Shipyards Industries' EPS declined by 17% over the past three years while total shareholder return over the past three years was 23%

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The share price of Israel Shipyards Industries Ltd (TLV:ISHI) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. The upcoming AGM on 7th of August may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for Israel Shipyards Industries

How Does Total Compensation For Zvi Schechterman Compare With Other Companies In The Industry?

At the time of writing, our data shows that Israel Shipyards Industries Ltd has a market capitalization of ₪3.2b, and reported total annual CEO compensation of ₪2.9m for the year to December 2024. That's a fairly small increase of 6.2% over the previous year. In particular, the salary of ₪1.74m, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar companies from the Israel Aerospace & Defense industry with market caps ranging from ₪1.4b to ₪5.4b, we found that the median CEO total compensation was ₪467k. Hence, we can conclude that Zvi Schechterman is remunerated higher than the industry median.

Talking in terms of the industry, salary represented approximately 57% of total compensation out of all the companies we analyzed, while other remuneration made up 43% of the pie. Israel Shipyards Industries 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.

A Look at Israel Shipyards Industries Ltd's Growth Numbers

Over the last three years, Israel Shipyards Industries Ltd has shrunk its earnings per share by 17% per year. Its revenue is up 1.5% over the last year.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Israel Shipyards Industries Ltd Been A Good Investment?

With a total shareholder return of 23% over three years, Israel Shipyards Industries Ltd shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Israel Shipyards Industries that investors should look into moving forward.

Important note: Israel Shipyards Industries is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.