Increases to Isrotel Ltd.'s (TLV:ISRO) CEO Compensation Might Cool off for now

Key Insights

• Isrotel's Annual General Meeting to take place on 18th of August
• CEO Lior Raviv's total compensation includes salary of ₪2.30m
• The overall pay is 588% above the industry average
• Over the past three years, Isrotel's EPS grew by 27% and over the past three years, the total shareholder return was 14%

Performance at Isrotel Ltd. (TLV:ISRO) has been reasonably good and CEO Lior Raviv has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 18th of August, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Isrotel

Comparing Isrotel Ltd.'s CEO Compensation With The Industry

According to our data, Isrotel Ltd. has a market capitalization of ₪4.1b, and paid its CEO total annual compensation worth ₪8.5m over the year to December 2023. We note that's a small decrease of 6.4% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₪2.3m.

On comparing similar companies from the Israel Hospitality industry with market caps ranging from ₪1.5b to ₪6.0b, we found that the median CEO total compensation was ₪1.2m. Accordingly, our analysis reveals that Isrotel Ltd. pays Lior Raviv north of the industry median.

Component	2023	2022	Proportion (2023)
Salary	₪2.3m	₪2.2m	27%
Other	₪6.2m	₪6.9m	73%
Total Compensation	₪8.5m	₪9.1m	100%

Speaking on an industry level, nearly 47% of total compensation represents salary, while the remainder of 53% is other remuneration. Isrotel sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Isrotel Ltd.'s Growth Numbers

Over the past three years, Isrotel Ltd. has seen its earnings per share (EPS) grow by 27% per year. Its revenue is down 6.6% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Isrotel Ltd. Been A Good Investment?

Isrotel Ltd. has generated a total shareholder return of 14% 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...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for Isrotel that investors should be aware of in a dynamic business environment.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.