We Discuss Why Neto M.E Holdings Ltd's (TLV:NTO) CEO Compensation May Be Closely Reviewed

Key Insights

• Neto M.E Holdings will host its Annual General Meeting on 4th of September
• CEO Ami Goldin's total compensation includes salary of ₪1.33m
• The total compensation is similar to the average for the industry
• Neto M.E Holdings' EPS declined by 9.0% over the past three years while total shareholder loss over the past three years was 48%

Shareholders will probably not be too impressed with the underwhelming results at Neto M.E Holdings Ltd (TLV:NTO) recently. At the upcoming AGM on 4th of September, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Neto M.E Holdings

Comparing Neto M.E Holdings Ltd's CEO Compensation With The Industry

According to our data, Neto M.E Holdings Ltd has a market capitalization of ₪255m, and paid its CEO total annual compensation worth ₪1.6m over the year to December 2023. That's a notable decrease of 22% on last year. Notably, the salary which is ₪1.33m, represents most of the total compensation being paid.

For comparison, other companies in the Israel Food industry with market capitalizations below ₪733m, reported a median total CEO compensation of ₪1.6m. From this we gather that Ami Goldin is paid around the median for CEOs in the industry. Moreover, Ami Goldin also holds ₪717k worth of Neto M.E Holdings stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	₪1.3m	₪1.3m	82%
Other	₪296k	₪773k	18%
Total Compensation	₪1.6m	₪2.1m	100%

On an industry level, roughly 82% of total compensation represents salary and 18% is other remuneration. There isn't a significant difference between Neto M.E Holdings and the broader market, in terms of salary allocation in the overall compensation package. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Neto M.E Holdings Ltd's Growth Numbers

Over the last three years, Neto M.E Holdings Ltd has shrunk its earnings per share by 9.0% per year. In the last year, its revenue is up 6.7%.

The decline in EPS is a bit concerning. 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 Neto M.E Holdings Ltd Been A Good Investment?

Few Neto M.E Holdings Ltd shareholders would feel satisfied with the return of -48% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Neto M.E Holdings you should be aware of, and 1 of them is concerning.

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.