We Think Shareholders Are Less Likely To Approve A Large Pay Rise For I.B.I.- Managing & Underwriting Ltd's (TLV:IBIU) CEO For Now

Key Insights

• I.B.I.- Managing & Underwriting will host its Annual General Meeting on 28th of October
• Salary of ₪1.37m is part of CEO Yaron Moses's total remuneration
• The total compensation is 116% higher than the average for the industry
• I.B.I.- Managing & Underwriting's EPS declined by 46% over the past three years while total shareholder loss over the past three years was 45%

Shareholders of I.B.I.- Managing & Underwriting Ltd (TLV:IBIU) will have been dismayed by the negative share price return over the last three years. Per share earnings growth is also lacking, despite revenue growth. Shareholders will have a chance to take their concerns to the board at the next AGM on 28th of October and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

Check out our latest analysis for I.B.I.- Managing & Underwriting

How Does Total Compensation For Yaron Moses Compare With Other Companies In The Industry?

According to our data, I.B.I.- Managing & Underwriting Ltd has a market capitalization of ₪199m, and paid its CEO total annual compensation worth ₪2.7m over the year to December 2023. We note that's a decrease of 23% compared to last year. Notably, the salary which is ₪1.37m, represents a considerable chunk of the total compensation being paid.

On comparing similar-sized companies in the Israel Capital Markets industry with market capitalizations below ₪754m, we found that the median total CEO compensation was ₪1.3m. Hence, we can conclude that Yaron Moses is remunerated higher than the industry median. Moreover, Yaron Moses also holds ₪2.6m worth of I.B.I.- Managing & Underwriting 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	₪1.4m	₪1.4m	50%
Other	₪1.3m	₪2.2m	50%
Total Compensation	₪2.7m	₪3.5m	100%

On an industry level, roughly 88% of total compensation represents salary and 12% is other remuneration. I.B.I.- Managing & Underwriting pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at I.B.I.- Managing & Underwriting Ltd's Growth Numbers

I.B.I.- Managing & Underwriting Ltd has reduced its earnings per share by 46% a year over the last three years. In the last year, its revenue is up 16%.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 I.B.I.- Managing & Underwriting Ltd Been A Good Investment?

With a total shareholder return of -45% over three years, I.B.I.- Managing & Underwriting 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...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

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 I.B.I.- Managing & Underwriting (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from I.B.I.- Managing & Underwriting, 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.