Increases to Neto M.E Holdings Ltd's (TLV:NTO) CEO Compensation Might Cool off for now

Key Insights

• Neto M.E Holdings to hold its Annual General Meeting on 7th of July
• Salary of ₪1.37m is part of CEO Ami Goldin's total remuneration
• Total compensation is 282% above industry average
• Neto M.E Holdings' total shareholder return over the past three years was 7.9% while its EPS was down 1.1% over the past three years

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Despite Neto M.E Holdings Ltd's (TLV:NTO) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. Some of these issues will occupy shareholders' minds as the AGM rolls around on 7th of July. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

See our latest analysis for Neto M.E Holdings

How Does Total Compensation For Ami Goldin Compare With Other Companies In The Industry?

At the time of writing, our data shows that Neto M.E Holdings Ltd has a market capitalization of ₪729m, and reported total annual CEO compensation of ₪1.4m for the year to December 2024. Notably, that's a decrease of 11% over the year before. We note that the salary portion, which stands at ₪1.37m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the Israel Food industry with market capitalizations between ₪337m and ₪1.3b, we discovered that the median CEO total compensation of that group was ₪376k. This suggests that Ami Goldin is paid more than the median for the industry. Moreover, Ami Goldin also holds ₪2.5m worth of Neto M.E Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 84% of total compensation out of all the companies we analyzed, while other remuneration made up 16% of the pie. Neto M.E Holdings has gone down a largely traditional route, paying Ami Goldin a high salary, giving it preference over non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Neto M.E Holdings Ltd's Growth

Over the last three years, Neto M.E Holdings Ltd has shrunk its earnings per share by 1.1% per year. Its revenue is up 13% over the last year.

The lack of EPS growth is certainly uninspiring. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Neto M.E Holdings Ltd Been A Good Investment?

Neto M.E Holdings Ltd has generated a total shareholder return of 7.9% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

In Summary...

Neto M.E Holdings pays its CEO a majority of compensation through a salary. While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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 2 warning signs (and 1 which makes us a bit uncomfortable) in Neto M.E Holdings 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.

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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.