Shareholders May Not Be So Generous With Veridis Environment Ltd's (TLV:VRDS) CEO Compensation And Here's Why

Key Insights

• Veridis Environment's Annual General Meeting to take place on 5th of August
• Total pay for CEO Ilan Ben Simon includes ₪1.80m salary
• The total compensation is 780% higher than the average for the industry
• Over the past three years, Veridis Environment's EPS fell by 82% and over the past three years, the total loss to shareholders 53%

In the past three years, the share price of Veridis Environment Ltd (TLV:VRDS) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also poor, despite revenues growing. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 5th of August, where they can impact on future company performance by voting on resolutions, including executive compensation. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

See our latest analysis for Veridis Environment

Comparing Veridis Environment Ltd's CEO Compensation With The Industry

According to our data, Veridis Environment Ltd has a market capitalization of ₪2.8b, and paid its CEO total annual compensation worth ₪5.0m over the year to December 2023. That's a notable decrease of 24% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₪1.8m.

On examining similar-sized companies in the Israel Commercial Services industry with market capitalizations between ₪1.5b and ₪6.0b, we discovered that the median CEO total compensation of that group was ₪569k. This suggests that Ilan Ben Simon is paid more than the median for the industry. What's more, Ilan Ben Simon holds ₪6.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	₪1.8m	₪1.7m	36%
Other	₪3.2m	₪4.9m	64%
Total Compensation	₪5.0m	₪6.6m	100%

Speaking on an industry level, nearly 59% of total compensation represents salary, while the remainder of 41% is other remuneration. Veridis Environment pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Veridis Environment Ltd's Growth Numbers

Over the last three years, Veridis Environment Ltd has shrunk its earnings per share by 82% per year. It achieved revenue growth of 100% over the last year.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. 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 Veridis Environment Ltd Been A Good Investment?

Few Veridis Environment Ltd shareholders would feel satisfied with the return of -53% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 2 which shouldn't be ignored) in Veridis Environment we think you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com