It's Probably Less Likely That Lesico Ltd's (TLV:LSCO) CEO Will See A Huge Pay Rise This Year

Key Insights

• Lesico will host its Annual General Meeting on 25th of December
• Total pay for CEO Eyal Leshman includes ₪1.41m salary
• Total compensation is similar to the industry average
• Over the past three years, Lesico's EPS grew by 53% and over the past three years, the total loss to shareholders 27%

Shareholders of Lesico Ltd (TLV:LSCO) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 25th of December. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Lesico

How Does Total Compensation For Eyal Leshman Compare With Other Companies In The Industry?

At the time of writing, our data shows that Lesico Ltd has a market capitalization of ₪197m, and reported total annual CEO compensation of ₪1.9m for the year to December 2023. That's a fairly small increase of 4.6% over the previous year. In particular, the salary of ₪1.41m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Israel Construction industry with market capitalizations under ₪719m, the reported median total CEO compensation was ₪1.9m. From this we gather that Eyal Leshman is paid around the median for CEOs in the industry. Moreover, Eyal Leshman also holds ₪9.8m worth of Lesico stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	₪1.4m	₪1.3m	73%
Other	₪522k	₪548k	27%
Total Compensation	₪1.9m	₪1.8m	100%

On an industry level, roughly 63% of total compensation represents salary and 37% is other remuneration. Lesico is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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 Lesico Ltd's Growth Numbers

Lesico Ltd has seen its earnings per share (EPS) increase by 53% a year over the past three years. In the last year, its revenue is up 15%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Lesico Ltd Been A Good Investment?

Since shareholders would have lost about 27% over three years, some Lesico Ltd investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Lesico that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.