Capital Point Ltd.'s (TLV:CPTP) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Capital Point to hold its Annual General Meeting on 10th of October
• Salary of ₪1.08m is part of CEO Yossi Tamar's total remuneration
• The overall pay is 149% above the industry average
• Over the past three years, Capital Point's EPS fell by 98% and over the past three years, the total loss to shareholders 36%

Shareholders will probably not be too impressed with the underwhelming results at Capital Point Ltd. (TLV:CPTP) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 10th of October. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Capital Point

How Does Total Compensation For Yossi Tamar Compare With Other Companies In The Industry?

Our data indicates that Capital Point Ltd. has a market capitalization of ₪67m, and total annual CEO compensation was reported as ₪3.1m for the year to December 2023. Notably, that's a decrease of 14% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₪1.1m.

On comparing similar-sized companies in the Israel Capital Markets industry with market capitalizations below ₪760m, we found that the median total CEO compensation was ₪1.3m. This suggests that Yossi Tamar is paid more than the median for the industry. Moreover, Yossi Tamar also holds ₪1.8m worth of Capital Point stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	₪1.1m	₪1.0m	34%
Other	₪2.1m	₪2.6m	66%
Total Compensation	₪3.1m	₪3.6m	100%

On an industry level, roughly 88% of total compensation represents salary and 12% is other remuneration. Capital Point pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Capital Point Ltd.'s Growth Numbers

Capital Point Ltd. has reduced its earnings per share by 98% a year over the last three years. It saw its revenue drop 28% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Capital Point Ltd. Been A Good Investment?

With a total shareholder return of -36% over three years, Capital Point Ltd. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 4 warning signs for Capital Point (2 make us uncomfortable!) that you should be aware of before investing here.

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.