We Think Shareholders May Want To Consider A Review Of Capital Point Ltd.'s (TLV:CPTP) CEO Compensation Package

Key Insights

• Capital Point to hold its Annual General Meeting on 5th of November
• Salary of ₪1.08m is part of CEO Yossi Tamar's total remuneration
• The total compensation is 124% higher than the average for the industry
• Capital Point's EPS declined by 98% over the past three years while total shareholder loss over the past three years was 40%

Capital Point Ltd. (TLV:CPTP) has not performed well recently and CEO Yossi Tamar will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 5th of November. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Capital Point

Comparing Capital Point Ltd.'s CEO Compensation With The Industry

According to our data, Capital Point Ltd. has a market capitalization of ₪64m, and paid its CEO total annual compensation worth ₪3.1m over the year to December 2023. That's a notable decrease of 14% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₪1.1m.

On comparing similar-sized companies in the Israel Capital Markets industry with market capitalizations below ₪746m, we found that the median total CEO compensation was ₪1.4m. This suggests that Yossi Tamar is paid more than the median for the industry. Moreover, Yossi Tamar also holds ₪1.7m 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%

Speaking on an industry level, nearly 87% of total compensation represents salary, while the remainder of 13% is other remuneration. Capital Point 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.

Capital Point Ltd.'s Growth

Capital Point Ltd. has reduced its earnings per share by 98% a year over the last three years. Its revenue is down 28% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 -40% 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.

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 Capital Point (of which 2 make us uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Capital Point, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.