Increases to Delek Group Ltd.'s (TLV:DLEKG) CEO Compensation Might Cool off for now

Key Insights

• Delek Group's Annual General Meeting to take place on 24th of July
• Salary of ₪2.71m is part of CEO Wells Wallace's total remuneration
• The overall pay is 57% above the industry average
• Delek Group's total shareholder return over the past three years was 212% while its EPS was down 0.1% over the past three years

The share price of Delek Group Ltd. (TLV:DLEKG) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 24th of July. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

View our latest analysis for Delek Group

Comparing Delek Group Ltd.'s CEO Compensation With The Industry

Our data indicates that Delek Group Ltd. has a market capitalization of ₪8.0b, and total annual CEO compensation was reported as ₪8.3m for the year to December 2023. That's a notable increase of 16% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₪2.7m.

On examining similar-sized companies in the Israel Oil and Gas industry with market capitalizations between ₪3.6b and ₪12b, we discovered that the median CEO total compensation of that group was ₪5.3m. Hence, we can conclude that Wells Wallace is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	₪2.7m	₪3.2m	33%
Other	₪5.6m	₪4.0m	67%
Total Compensation	₪8.3m	₪7.2m	100%

Talking in terms of the industry, salary represented approximately 46% of total compensation out of all the companies we analyzed, while other remuneration made up 54% of the pie. It's interesting to note that Delek Group 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.

A Look at Delek Group Ltd.'s Growth Numbers

Earnings per share at Delek Group Ltd. are much the same as they were three years ago, albeit slightly lower. The trailing twelve months of revenue was pretty much the same as the prior period.

Its a bit disappointing to see that the company has failed to grow its EPS. And the flat revenue is seriously uninspiring. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Delek Group Ltd. Been A Good Investment?

Most shareholders would probably be pleased with Delek Group Ltd. for providing a total return of 212% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

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. We did our research and identified 4 warning signs (and 1 which shouldn't be ignored) in Delek Group we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com