How Much is Delek Drilling - Limited Partnership's (TLV:DEDR.L) CEO Getting Paid?

Yossi Abu has been the CEO of Delek Drilling - Limited Partnership (TLV:DEDR.L) since 2011, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Delek Drilling - Limited Partnership.

See our latest analysis for Delek Drilling - Limited Partnership

Comparing Delek Drilling - Limited Partnership's CEO Compensation With the industry

At the time of writing, our data shows that Delek Drilling - Limited Partnership has a market capitalization of ₪4.5b, and reported total annual CEO compensation of US$1.6m for the year to December 2019. Notably, that's an increase of 14% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$498k.

In comparison with other companies in the industry with market capitalizations ranging from ₪3.2b to ₪10b, the reported median CEO total compensation was US$103k. This suggests that Yossi Abu is paid more than the median for the industry. What's more, Yossi Abu holds ₪2.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 82% of total compensation represents salary and 18% is other remuneration. It's interesting to note that Delek Drilling - Limited Partnership 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.

Delek Drilling - Limited Partnership's Growth

Over the last three years, Delek Drilling - Limited Partnership has shrunk its earnings per share by 30% per year. It achieved revenue growth of 79% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Delek Drilling - Limited Partnership Been A Good Investment?

Given the total shareholder loss of 58% over three years, many shareholders in Delek Drilling - Limited Partnership are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, Yossi is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. At the same time, looking at EPS and total shareholder returns, it's tough to say Delek Drilling - Limited Partnership is in a sound position, considering both metrics are down. On a more positive note, the company has produced a more positive revenue growth more recently. Suffice it to say, we don't think the CEO is underpaid!

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 3 warning signs for Delek Drilling - Limited Partnership you should be aware of, and 1 of them is a bit concerning.

Important note: Delek Drilling - Limited Partnership is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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