We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Dan Hotels Ltd's (TLV:DANH) CEO For Now

Key Insights

• Dan Hotels will host its Annual General Meeting on 9th of December
• Total pay for CEO Shlomi Tachan includes ₪1.67m salary
• The total compensation is 381% higher than the average for the industry
• Dan Hotels' EPS declined by 51% over the past three years while total shareholder return over the past three years was 33%

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The share price of Dan Hotels Ltd (TLV:DANH) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 9th of December. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

View our latest analysis for Dan Hotels

Comparing Dan Hotels Ltd's CEO Compensation With The Industry

Our data indicates that Dan Hotels Ltd has a market capitalization of ₪3.3b, and total annual CEO compensation was reported as ₪2.4m for the year to December 2024. That's a notable decrease of 14% on last year. We note that the salary portion, which stands at ₪1.67m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the Israel Hospitality industry with market capitalizations between ₪1.3b and ₪5.2b, we discovered that the median CEO total compensation of that group was ₪507k. Accordingly, our analysis reveals that Dan Hotels Ltd pays Shlomi Tachan north of the industry median.

On an industry level, roughly 66% of total compensation represents salary and 34% is other remuneration. Dan Hotels is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Dan Hotels Ltd's Growth Numbers

Over the last three years, Dan Hotels Ltd has shrunk its earnings per share by 51% per year. In the last year, its revenue is down 2.6%.

Overall this is not a very positive result for shareholders. 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. 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?

Dan Hotels Ltd has generated a total shareholder return of 33% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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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.