Payton Industries Ltd's (TLV:PAYT) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Payton Industries to hold its Annual General Meeting on 2nd of January
• Salary of US$217.0k is part of CEO Michal Liechtenstein's total remuneration
• Total compensation is 92% above industry average
• Payton Industries' total shareholder return over the past three years was 106% while its EPS grew by 19% over the past three years

Under the guidance of CEO Michal Liechtenstein, Payton Industries Ltd (TLV:PAYT) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 2nd of January. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Payton Industries

How Does Total Compensation For Michal Liechtenstein Compare With Other Companies In The Industry?

According to our data, Payton Industries Ltd has a market capitalization of ₪574m, and paid its CEO total annual compensation worth US$217k over the year to December 2023. That's a slight decrease of 4.8% on the prior year. Notably, the salary of US$217k is the entirety of the CEO compensation.

For comparison, other companies in the Israel Electrical industry with market capitalizations ranging between ₪366m and ₪1.5b had a median total CEO compensation of US$113k. This suggests that Michal Liechtenstein is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	US$217k	US$228k	100%
Other	-	-	-
Total Compensation	US$217k	US$228k	100%

On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. Speaking on a company level, Payton Industries prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Payton Industries Ltd's Growth

Payton Industries Ltd has seen its earnings per share (EPS) increase by 19% a year over the past three years. Its revenue is up 4.0% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Payton Industries Ltd Been A Good Investment?

We think that the total shareholder return of 106%, over three years, would leave most Payton Industries Ltd shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Payton Industries pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Payton Industries that investors should think about before committing capital to this stock.

Important note: Payton 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.