Shareholders May Be Wary Of Increasing Mehadrin Ltd's (TLV:MEDN) CEO Compensation Package

Key Insights

• Mehadrin to hold its Annual General Meeting on 1st of November
• Total pay for CEO Shaul Shelach includes ₪1.49m salary
• Total compensation is 132% above industry average
• Over the past three years, Mehadrin's EPS fell by 26% and over the past three years, the total loss to shareholders 6.4%

Mehadrin Ltd (TLV:MEDN) has not performed well recently and CEO Shaul Shelach will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 1st of November. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Mehadrin

Comparing Mehadrin Ltd's CEO Compensation With The Industry

Our data indicates that Mehadrin Ltd has a market capitalization of ₪432m, and total annual CEO compensation was reported as ₪3.6m for the year to December 2022. We note that's an increase of 15% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₪1.5m.

For comparison, other companies in the Israel Food industry with market capitalizations below ₪813m, reported a median total CEO compensation of ₪1.6m. This suggests that Shaul Shelach is paid more than the median for the industry.

Component	2022	2021	Proportion (2022)
Salary	₪1.5m	₪1.7m	41%
Other	₪2.1m	₪1.4m	59%
Total Compensation	₪3.6m	₪3.1m	100%

Speaking on an industry level, nearly 62% of total compensation represents salary, while the remainder of 38% is other remuneration. Mehadrin sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Mehadrin Ltd's Growth Numbers

Over the last three years, Mehadrin Ltd has shrunk its earnings per share by 26% per year. In the last year, its revenue is up 8.1%.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Mehadrin Ltd Been A Good Investment?

With a three year total loss of 6.4% for the shareholders, Mehadrin Ltd would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Mehadrin that investors should be aware of in a dynamic business environment.

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.

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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.