Stock Analysis

What Can We Make Of Delta Galil Industries' (TLV:DELT) CEO Compensation?

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This article will reflect on the compensation paid to Isaac Dabah who has served as CEO of Delta Galil Industries Ltd. (TLV:DELT) since 2008. This analysis will also assess whether Delta Galil Industries pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Delta Galil Industries

Comparing Delta Galil Industries Ltd.'s CEO Compensation With the industry

Our data indicates that Delta Galil Industries Ltd. has a market capitalization of ₪2.0b, and total annual CEO compensation was reported as US$1.5m for the year to December 2019. That is, the compensation was roughly the same as last year. In particular, the salary of US$852.1k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between ₪1.3b and ₪5.2b had a median total CEO compensation of US$405k. This suggests that Isaac Dabah is paid more than the median for the industry. Furthermore, Isaac Dabah directly owns ₪54m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20192018Proportion (2019)
Salary US$852k US$781k 56%
Other US$675k US$750k 44%
Total CompensationUS$1.5m US$1.5m100%

Speaking on an industry level, nearly 98% of total compensation represents salary, while the remainder of 1.8% is other remuneration. In Delta Galil Industries' case, non-salary compensation represents a greater slice of total remuneration, 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.

TASE:DELT CEO Compensation December 17th 2020

Delta Galil Industries Ltd.'s Growth

Over the last three years, Delta Galil Industries Ltd. has shrunk its earnings per share by 48% per year. Its revenue is down 9.1% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Delta Galil Industries Ltd. Been A Good Investment?

With a three year total loss of 31% for the shareholders, Delta Galil Industries Ltd. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, Isaac is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. To make matters worse, EPS growth has also been negative during this period. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Delta Galil Industries (2 don't sit too well with us!) that you should be aware of before investing here.

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. 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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