Scope Metals Group Ltd.'s (TLV:SCOP) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Scope Metals Group will host its Annual General Meeting on 30th of December
• CEO Gil Haver's total compensation includes salary of ₪2.15m
• The overall pay is 463% above the industry average
• Over the past three years, Scope Metals Group's EPS fell by 2.2% and over the past three years, the total shareholder return was 23%

Despite positive share price growth of 23% for Scope Metals Group Ltd. (TLV:SCOP) over the last few years, earnings growth has been disappointing, which suggests something is amiss. The upcoming AGM on 30th of December 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 Scope Metals Group

How Does Total Compensation For Gil Haver Compare With Other Companies In The Industry?

According to our data, Scope Metals Group Ltd. has a market capitalization of ₪1.8b, and paid its CEO total annual compensation worth ₪3.7m over the year to December 2023. We note that's a decrease of 21% compared to last year. We note that the salary of ₪2.15m makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the Israel Trade Distributors industry with market capitalizations ranging between ₪735m and ₪2.9b had a median total CEO compensation of ₪658k. This suggests that Gil Haver is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	₪2.1m	₪1.9m	58%
Other	₪1.6m	₪2.7m	42%
Total Compensation	₪3.7m	₪4.7m	100%

Speaking on an industry level, nearly 94% of total compensation represents salary, while the remainder of 6% is other remuneration. Scope Metals Group pays a modest slice of remuneration through salary, as compared to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Scope Metals Group Ltd.'s Growth

Over the last three years, Scope Metals Group Ltd. has shrunk its earnings per share by 2.2% per year. Its revenue is up 12% over the last year.

A lack of EPS improvement is not good to see. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Scope Metals Group Ltd. Been A Good Investment?

With a total shareholder return of 23% over three years, Scope Metals Group 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...

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.

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 1 warning sign for Scope Metals Group 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. 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.