We Discuss Why Willy-Food Investments Ltd's (TLV:WLFD) CEO Compensation May Be Closely Reviewed

Key Insights

• Willy-Food Investments' Annual General Meeting to take place on 19th of November
• Salary of ₪876.0k is part of CEO Erez Winner's total remuneration
• Total compensation is 146% above industry average
• Willy-Food Investments' EPS declined by 17% over the past three years while total shareholder loss over the past three years was 45%

The results at Willy-Food Investments Ltd (TLV:WLFD) have been quite disappointing recently and CEO Erez Winner bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 19th of November. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Willy-Food Investments

Comparing Willy-Food Investments Ltd's CEO Compensation With The Industry

Our data indicates that Willy-Food Investments Ltd has a market capitalization of ₪261m, and total annual CEO compensation was reported as ₪936k for the year to December 2023. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at ₪876.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Israel Consumer Retailing industry with market capitalizations below ₪750m, we found that the median total CEO compensation was ₪381k. This suggests that Erez Winner is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	₪876k	₪648k	94%
Other	₪60k	₪273k	6%
Total Compensation	₪936k	₪921k	100%

On an industry level, roughly 60% of total compensation represents salary and 40% is other remuneration. Willy-Food Investments is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Willy-Food Investments Ltd's Growth

Willy-Food Investments Ltd has reduced its earnings per share by 17% a year over the last three years. In the last year, its revenue is up 1.4%.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Willy-Food Investments Ltd Been A Good Investment?

With a total shareholder return of -45% over three years, Willy-Food Investments Ltd shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Willy-Food Investments (of which 1 is a bit concerning!) 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.