Shareholders May Be A Little Conservative With Harel Insurance Investments & Financial Services Ltd's (TLV:HARL) CEO Compensation For Now

Key Insights

• Harel Insurance Investments & Financial Services' Annual General Meeting to take place on 30th of May
• CEO Michel Siboni's total compensation includes salary of ₪2.68m
• The overall pay is comparable to the industry average
• Over the past three years, Harel Insurance Investments & Financial Services' EPS fell by 11% and over the past three years, the total shareholder return was 1.3%

CEO Michel Siboni has done a decent job of delivering relatively good performance at Harel Insurance Investments & Financial Services Ltd (TLV:HARL) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 30th of May. We present our case of why we think CEO compensation looks fair.

See our latest analysis for Harel Insurance Investments & Financial Services

How Does Total Compensation For Michel Siboni Compare With Other Companies In The Industry?

At the time of writing, our data shows that Harel Insurance Investments & Financial Services Ltd has a market capitalization of ₪6.5b, and reported total annual CEO compensation of ₪3.5m for the year to December 2023. That's mostly flat as compared to the prior year's compensation. In particular, the salary of ₪2.68m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the Israel Insurance industry with market caps ranging from ₪3.7b to ₪12b, we found that the median CEO total compensation was ₪3.5m. So it looks like Harel Insurance Investments & Financial Services compensates Michel Siboni in line with the median for the industry. Moreover, Michel Siboni also holds ₪283k worth of Harel Insurance Investments & Financial Services stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	₪2.7m	₪2.5m	77%
Other	₪793k	₪935k	23%
Total Compensation	₪3.5m	₪3.5m	100%

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. Our data reveals that Harel Insurance Investments & Financial Services allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Harel Insurance Investments & Financial Services Ltd's Growth

Harel Insurance Investments & Financial Services Ltd has reduced its earnings per share by 11% a year over the last three years. It achieved revenue growth of 92% over the last year.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Harel Insurance Investments & Financial Services Ltd Been A Good Investment?

Harel Insurance Investments & Financial Services Ltd has not done too badly by shareholders, with a total return of 1.3%, over three years. It would be nice to see that metric improve in the future. 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...

Some shareholders will be pleased by the relatively good results, however, the results could still be improved. Still, we think that until shareholders see an improvement in EPS growth, they may find it hard to justify a pay rise for the CEO.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 3 warning signs for Harel Insurance Investments & Financial Services that investors should look into moving forward.

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.

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.