Shareholders May Be More Conservative With Delek Group Ltd.'s (TLV:DLEKG) CEO Compensation For Now

Key Insights

• Delek Group's Annual General Meeting to take place on 26th of June
• Salary of ₪3.40m is part of CEO Wells Wallace's total remuneration
• The overall pay is 1,347% above the industry average
• Over the past three years, Delek Group's EPS fell by 34% and over the past three years, the total shareholder return was 137%

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Despite strong share price growth of 137% for Delek Group Ltd. (TLV:DLEKG) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 26th of June. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for Delek Group

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

According to our data, Delek Group Ltd. has a market capitalization of ₪13b, and paid its CEO total annual compensation worth ₪8.2m over the year to December 2024. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₪3.4m.

For comparison, other companies in the Israel Oil and Gas industry with market capitalizations ranging between ₪7.0b and ₪22b had a median total CEO compensation of ₪565k. Accordingly, our analysis reveals that Delek Group Ltd. pays Wells Wallace north of the industry median.

Talking in terms of the industry, salary represented approximately 53% of total compensation out of all the companies we analyzed, while other remuneration made up 47% of the pie. Delek Group pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Delek Group Ltd.'s Growth

Delek Group Ltd. has reduced its earnings per share by 34% a year over the last three years. In the last year, its revenue is up 5.9%.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. 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 Delek Group Ltd. Been A Good Investment?

Most shareholders would probably be pleased with Delek Group Ltd. for providing a total return of 137% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

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 a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for Delek Group that investors should look into moving forward.

Important note: Delek Group 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. 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.