A Look At B. Gaon Holdings' (TLV:GAON) CEO Remuneration

Guy Regev became the CEO of B. Gaon Holdings Ltd. (TLV:GAON) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether B. Gaon Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for B. Gaon Holdings

How Does Total Compensation For Guy Regev Compare With Other Companies In The Industry?

According to our data, B. Gaon Holdings Ltd. has a market capitalization of ₪103m, and paid its CEO total annual compensation worth ₪3.2m over the year to December 2019. Notably, that's an increase of 24% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₪430k.

For comparison, other companies in the industry with market capitalizations below ₪652m, reported a median total CEO compensation of ₪60k. Accordingly, our analysis reveals that B. Gaon Holdings Ltd. pays Guy Regev north of the industry median. What's more, Guy Regev holds ₪533k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. It's interesting to note that B. Gaon Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

B. Gaon Holdings Ltd.'s Growth

B. Gaon Holdings Ltd. has reduced its earnings per share by 133% a year over the last three years. It saw its revenue drop 1.2% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 B. Gaon Holdings Ltd. Been A Good Investment?

Given the total shareholder loss of 10.0% over three years, many shareholders in B. Gaon Holdings Ltd. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Guy is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. To make matters worse, EPS growth has also been negative during this period. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for B. Gaon Holdings (2 shouldn't be ignored!) 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. 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.
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