We Think Some Shareholders May Hesitate To Increase Scope Metals Group Ltd.'s (TLV:SCOP) CEO Compensation

Key Insights

• Scope Metals Group's Annual General Meeting to take place on 27th of July
• Total pay for CEO Gil Haver includes ₪2.22m salary
• The overall pay is 643% above the industry average
• Over the past three years, Scope Metals Group's EPS fell by 17% and over the past three years, the total shareholder return was 1.8%

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Share price growth at Scope Metals Group Ltd. (TLV:SCOP) has remained rather flat over the last few years and it may be because earnings has struggled to grow at all. The upcoming AGM on 27th of July 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. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

See our latest analysis for Scope Metals Group

Comparing Scope Metals Group Ltd.'s CEO Compensation With The Industry

According to our data, Scope Metals Group Ltd. has a market capitalization of ₪2.1b, and paid its CEO total annual compensation worth ₪3.7m over the year to December 2024. That is, the compensation was roughly the same as last year. In particular, the salary of ₪2.22m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Israel Trade Distributors industry with market capitalizations ranging between ₪1.3b and ₪5.4b had a median total CEO compensation of ₪494k. Accordingly, our analysis reveals that Scope Metals Group Ltd. pays Gil Haver north of the industry median.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. Scope Metals Group pays a modest slice of remuneration through salary, as compared to the broader 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.

Scope Metals Group Ltd.'s Growth

Scope Metals Group Ltd. has reduced its earnings per share by 17% a year over the last three years. In the last year, its revenue is up 13%.

Overall this is not a very positive result for shareholders. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Scope Metals Group Ltd. Been A Good Investment?

Scope Metals Group Ltd. has not done too badly by shareholders, with a total return of 1.8%, over three years. It would be nice to see that metric improve in the future. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

To Conclude...

While it's true that the share price growth hasn't been bad, it's hard to overlook the lack of earnings growth and this makes us question whether there will be any strong catalyst for the stock to improve. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Scope Metals Group that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.