We Think Ilex Medical Ltd's (TLV:ILX) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Ilex Medical to hold its Annual General Meeting on 30th of September
• Total pay for CEO Tammy Galili includes ₪1.52m salary
• The overall pay is 158% above the industry average
• Ilex Medical's three-year loss to shareholders was 41% while its EPS was down 30% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at Ilex Medical Ltd (TLV:ILX) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 30th of September. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Ilex Medical

Comparing Ilex Medical Ltd's CEO Compensation With The Industry

Our data indicates that Ilex Medical Ltd has a market capitalization of ₪717m, and total annual CEO compensation was reported as ₪2.1m for the year to December 2023. That's a notable decrease of 12% on last year. Notably, the salary which is ₪1.52m, represents most of the total compensation being paid.

For comparison, other companies in the Israel Healthcare industry with market capitalizations ranging between ₪379m and ₪1.5b had a median total CEO compensation of ₪797k. Hence, we can conclude that Tammy Galili is remunerated higher than the industry median. Moreover, Tammy Galili also holds ₪9.6m worth of Ilex Medical 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	₪1.5m	₪1.5m	74%
Other	₪530k	₪800k	26%
Total Compensation	₪2.1m	₪2.3m	100%

Talking in terms of the industry, salary represented approximately 80% of total compensation out of all the companies we analyzed, while other remuneration made up 20% of the pie. There isn't a significant difference between Ilex Medical and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Ilex Medical Ltd's Growth

Over the last three years, Ilex Medical Ltd has shrunk its earnings per share by 30% per year. Its revenue is up 12% over the last year.

The decline in EPS is a bit concerning. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Ilex Medical Ltd Been A Good Investment?

Few Ilex Medical Ltd shareholders would feel satisfied with the return of -41% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Ilex Medical (1 is significant!) that you should be aware of before investing here.

Important note: Ilex Medical 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.