What Can We Learn About RSL Electronics' (TLV:RSEL) CEO Compensation?

The CEO of RSL Electronics Ltd. (TLV:RSEL) is Zeev Degani, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether RSL Electronics pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for RSL Electronics

How Does Total Compensation For Zeev Degani Compare With Other Companies In The Industry?

At the time of writing, our data shows that RSL Electronics Ltd. has a market capitalization of ₪66m, and reported total annual CEO compensation of ₪963k for the year to December 2019. That's mostly flat as compared to the prior year's compensation. It is worth noting that the CEO compensation consists entirely of the salary, worth ₪963k.

For comparison, other companies in the industry with market capitalizations below ₪664m, reported a median total CEO compensation of ₪601k. This suggests that Zeev Degani is paid more than the median for the industry. Moreover, Zeev Degani also holds ₪32m worth of RSL Electronics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 64% of total compensation out of all the companies we analyzed, while other remuneration made up 36% of the pie. On a company level, RSL Electronics prefers to reward its CEO through a salary, opting not to pay Zeev Degani through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

RSL Electronics Ltd.'s Growth

RSL Electronics Ltd.'s earnings per share (EPS) grew 19% per year over the last three years. Its revenue is down 20% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 RSL Electronics Ltd. Been A Good Investment?

We think that the total shareholder return of 253%, over three years, would leave most RSL Electronics Ltd. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

RSL Electronics pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we touched on above, RSL Electronics Ltd. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, RSL Electronics has produced strong EPS growth and shareholder returns over the last three years. As a result of the excellent all-round performance of the company, we believe CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that Zeev deserves a raise!

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for RSL Electronics that investors should think about before committing capital to this stock.

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. 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.
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