Should Shareholders Have Second Thoughts About A Pay Rise For Identi Healthcare Ltd's (TLV:IDNT) CEO This Year?

Key Insights

• Identi Healthcare to hold its Annual General Meeting on 9th of October
• Total pay for CEO Shlomo Matityaho includes ₪675.0k salary
• The total compensation is 38% less than the average for the industry
• Identi Healthcare's three-year loss to shareholders was 68% while its EPS was down 7.8% over the past three years

The underwhelming performance at Identi Healthcare Ltd (TLV:IDNT) recently has probably not pleased shareholders. At the upcoming AGM on 9th of October, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. The data we gathered below shows that CEO compensation looks acceptable for now.

Check out our latest analysis for Identi Healthcare

How Does Total Compensation For Shlomo Matityaho Compare With Other Companies In The Industry?

Our data indicates that Identi Healthcare Ltd has a market capitalization of ₪23m, and total annual CEO compensation was reported as ₪675k for the year to December 2023. That's a fairly small increase of 3.7% over the previous year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₪675k.

For comparison, other companies in the Israel Medical Equipment industry with market capitalizations below ₪754m, reported a median total CEO compensation of ₪1.1m. This suggests that Shlomo Matityaho is paid below the industry median. Moreover, Shlomo Matityaho also holds ₪16m worth of Identi Healthcare stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	₪675k	₪651k	100%
Other	-	-	-
Total Compensation	₪675k	₪651k	100%

On an industry level, roughly 88% of total compensation represents salary and 12% is other remuneration. At the company level, Identi Healthcare pays Shlomo Matityaho solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Identi Healthcare Ltd's Growth

Over the last three years, Identi Healthcare Ltd has shrunk its earnings per share by 7.8% per year. In the last year, its revenue is up 4.8%.

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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Identi Healthcare Ltd Been A Good Investment?

The return of -68% over three years would not have pleased Identi Healthcare Ltd shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Identi Healthcare pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

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. In our study, we found 5 warning signs for Identi Healthcare you should be aware of, and 4 of them are concerning.

Switching gears from Identi Healthcare, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.