What We Learned About Hod Assaf Industries' (TLV:HOD) CEO Pay

This article will reflect on the compensation paid to David Zilberberg who has served as CEO of Hod Assaf Industries Ltd. (TLV:HOD) since 2014. This analysis will also assess whether Hod Assaf Industries pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Hod Assaf Industries

How Does Total Compensation For David Zilberberg Compare With Other Companies In The Industry?

At the time of writing, our data shows that Hod Assaf Industries Ltd. has a market capitalization of ₪241m, and reported total annual CEO compensation of ₪1.1m for the year to December 2019. That's mostly flat as compared to the prior year's compensation. It is worth noting that the CEO compensation consists entirely of the salary, worth ₪1.1m.

For comparison, other companies in the industry with market capitalizations below ₪651m, reported a median total CEO compensation of ₪234k. Hence, we can conclude that David Zilberberg is remunerated higher than the industry median.

Speaking on an industry level, nearly 95% of total compensation represents salary, while the remainder of 5.5% is other remuneration. Speaking on a company level, Hod Assaf Industries prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Hod Assaf Industries Ltd.'s Growth

Hod Assaf Industries Ltd. has reduced its earnings per share by 97% a year over the last three years. Its revenue is down 13% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Hod Assaf Industries Ltd. Been A Good Investment?

Most shareholders would probably be pleased with Hod Assaf Industries Ltd. for providing a total return of 40% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Hod Assaf Industries rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we noted earlier, Hod Assaf Industries pays its CEO higher than the norm for similar-sized companies belonging to the same industry. The company isn't growing EPS, but shareholder returns have been impressive over the last three years. Considering positive investor returns, it would be bold of us to criticize CEO compensation, but shareholders might want to see healthier EPS growth before a raise is given out.

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. We did our research and identified 3 warning signs (and 1 which is a bit unpleasant) in Hod Assaf Industries we think you should know about.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.
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