How Does Hamama Meir Trading (1996)'s (TLV:HMAM) CEO Pay Compare With Company Performance?

This article will reflect on the compensation paid to Eliyahu Hamama who has served as CEO of Hamama Meir Trading (1996) Ltd. (TLV:HMAM) since 1997. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Hamama Meir Trading (1996).

See our latest analysis for Hamama Meir Trading (1996)

How Does Total Compensation For Eliyahu Hamama Compare With Other Companies In The Industry?

Our data indicates that Hamama Meir Trading (1996) Ltd. has a market capitalization of ₪34m, and total annual CEO compensation was reported as ₪1.3m for the year to December 2019. That is, the compensation was roughly the same as last year. In particular, the salary of ₪875.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below ₪667m, we found that the median total CEO compensation was ₪419k. Accordingly, our analysis reveals that Hamama Meir Trading (1996) Ltd. pays Eliyahu Hamama north of the industry median. What's more, Eliyahu Hamama holds ₪22m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 90% of total compensation out of all the companies we analyzed, while other remuneration made up 9.5% of the pie. In Hamama Meir Trading (1996)'s case, non-salary compensation represents a greater slice of total remuneration, in comparison 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.

A Look at Hamama Meir Trading (1996) Ltd.'s Growth Numbers

Hamama Meir Trading (1996) Ltd. has seen its earnings per share (EPS) increase by 34% a year over the past three years. In the last year, its revenue is down 18%.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Hamama Meir Trading (1996) Ltd. Been A Good Investment?

With a three year total loss of 34% for the shareholders, Hamama Meir Trading (1996) Ltd. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, Hamama Meir Trading (1996) pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, the EPS growth is certainly impressive, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Hamama Meir Trading (1996) that investors should be aware of in a dynamic business environment.

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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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