How Should Investors Feel About Mediterranean Towers' (TLV:MDTR) CEO Remuneration?

This article will reflect on the compensation paid to Doron Arnon who has served as CEO of Mediterranean Towers Ltd. (TLV:MDTR) since 2004. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Mediterranean Towers

Comparing Mediterranean Towers Ltd.'s CEO Compensation With the industry

According to our data, Mediterranean Towers Ltd. has a market capitalization of ₪1.3b, and paid its CEO total annual compensation worth ₪2.5m over the year to December 2019. That's a notable increase of 12% on last year. Notably, the salary which is ₪1.34m, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from ₪647m to ₪2.6b, we found that the median CEO total compensation was ₪917k. Hence, we can conclude that Doron Arnon is remunerated higher than the industry median.

On an industry level, roughly 92% of total compensation represents salary and 7.9% is other remuneration. In Mediterranean Towers' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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 Mediterranean Towers Ltd.'s Growth Numbers

Over the last three years, Mediterranean Towers Ltd. has shrunk its earnings per share by 18% per year. It achieved revenue growth of 9.3% over the last year.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Mediterranean Towers Ltd. Been A Good Investment?

We think that the total shareholder return of 36%, over three years, would leave most Mediterranean Towers Ltd. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As we noted earlier, Mediterranean Towers pays its CEO higher than the norm for similar-sized companies belonging to the same industry. We feel that EPS have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So while we would not say that Doron is generously paid, stockholders would want to see some EPS growth before agreeing that a raise is a good idea.

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 4 warning signs for Mediterranean Towers you should be aware of, and 2 of them are a bit unpleasant.

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.

When trading Mediterranean Towers or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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