Shareholders May Not Be So Generous With Shikun & Binui Ltd.'s (TLV:SKBN) CEO Compensation And Here's Why

Key Insights

• Shikun & Binui's Annual General Meeting to take place on 16th of October
• CEO Amit Birman's total compensation includes salary of ₪2.68m
• The overall pay is 389% above the industry average
• Shikun & Binui's total shareholder return over the past three years was 18% while its EPS was down 27% over the past three years

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Performance at Shikun & Binui Ltd. (TLV:SKBN) has been reasonably good and CEO Amit Birman has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 16th of October. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Shikun & Binui

Comparing Shikun & Binui Ltd.'s CEO Compensation With The Industry

According to our data, Shikun & Binui Ltd. has a market capitalization of ₪9.5b, and paid its CEO total annual compensation worth ₪5.3m over the year to December 2024. Notably, that's an increase of 82% over the year before. We note that the salary of ₪2.68m makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the Israel Construction industry with market capitalizations ranging between ₪6.5b and ₪21b had a median total CEO compensation of ₪1.1m. This suggests that Amit Birman is paid more than the median for the industry.

On an industry level, roughly 58% of total compensation represents salary and 42% is other remuneration. It's interesting to note that Shikun & Binui allocates a smaller portion of compensation to salary in comparison 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.

A Look at Shikun & Binui Ltd.'s Growth Numbers

Shikun & Binui Ltd. has reduced its earnings per share by 27% a year over the last three years. Its revenue is up 22% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Shikun & Binui Ltd. Been A Good Investment?

With a total shareholder return of 18% over three years, Shikun & Binui Ltd. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

The overall company performance has been commendable, however there are still areas for improvement. EPS growth is still weak, and until that picks up, shareholders may find it hard to approve a pay rise for the CEO, since they are already paid above the average in their industry.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Shikun & Binui (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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.