Here's Why Shareholders May Want To Be Cautious With Increasing Modiin Energy-Limited Partnership's (TLV:MDIN) CEO Pay Packet

Key Insights

• Modiin Energy-Limited Partnership to hold its Annual General Meeting on 15th of November
• Salary of US$485.3k is part of CEO Yaniv Friedman's total remuneration
• The overall pay is 132% above the industry average
• Over the past three years, Modiin Energy-Limited Partnership's EPS grew by 31% and over the past three years, the total loss to shareholders 33%

The underwhelming share price performance of Modiin Energy-Limited Partnership (TLV:MDIN) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 15th of November. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Modiin Energy-Limited Partnership

Comparing Modiin Energy-Limited Partnership's CEO Compensation With The Industry

Our data indicates that Modiin Energy-Limited Partnership has a market capitalization of ₪54m, and total annual CEO compensation was reported as US$816k for the year to December 2022. We note that's a decrease of 19% compared to last year. In particular, the salary of US$485.3k, makes up a fairly large portion of the total compensation being paid to the CEO.

In comparison with other companies in the Israel Oil and Gas industry with market capitalizations under ₪766m, the reported median total CEO compensation was US$352k. Hence, we can conclude that Yaniv Friedman is remunerated higher than the industry median.

Component	2022	2021	Proportion (2022)
Salary	US$485k	US$326k	60%
Other	US$330k	US$683k	40%
Total Compensation	US$816k	US$1.0m	100%

On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. Modiin Energy-Limited Partnership is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Modiin Energy-Limited Partnership's Growth

Over the past three years, Modiin Energy-Limited Partnership has seen its earnings per share (EPS) grow by 31% per year. In the last year, its revenue is down 2.1%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Modiin Energy-Limited Partnership Been A Good Investment?

The return of -33% over three years would not have pleased Modiin Energy-Limited Partnership shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Modiin Energy-Limited Partnership that you should be aware of before investing.

Important note: Modiin Energy-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. 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.