Dan Hotels Ltd's (TLV:DANH) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Dan Hotels will host its Annual General Meeting on 9th of December
• Total pay for CEO Shlomi Tachan includes ₪1.59m salary
• Total compensation is 427% above industry average
• Dan Hotels' three-year loss to shareholders was 21% while its EPS grew by 39% over the past three years

Shareholders of Dan Hotels Ltd (TLV:DANH) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 9th of December. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Dan Hotels

How Does Total Compensation For Shlomi Tachan Compare With Other Companies In The Industry?

Our data indicates that Dan Hotels Ltd has a market capitalization of ₪2.2b, and total annual CEO compensation was reported as ₪2.8m for the year to December 2023. Notably, that's an increase of 23% over the year before. In particular, the salary of ₪1.59m, makes up a fairly large portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the Israel Hospitality industry with market capitalizations between ₪1.5b and ₪5.8b, we discovered that the median CEO total compensation of that group was ₪536k. Hence, we can conclude that Shlomi Tachan is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	₪1.6m	₪1.4m	56%
Other	₪1.2m	₪922k	44%
Total Compensation	₪2.8m	₪2.3m	100%

On an industry level, around 47% of total compensation represents salary and 53% is other remuneration. It's interesting to note that Dan Hotels pays out a greater portion of remuneration through salary, compared to the 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.

Dan Hotels Ltd's Growth

Over the past three years, Dan Hotels Ltd has seen its earnings per share (EPS) grow by 39% per year. It saw its revenue drop 8.3% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Dan Hotels Ltd Been A Good Investment?

With a three year total loss of 21% for the shareholders, Dan Hotels Ltd would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Dan Hotels that investors should look into moving forward.

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.