Shareholders May Be More Conservative With ICL Group Ltd's (TLV:ICL) CEO Compensation For Now

The share price of ICL Group Ltd (TLV:ICL) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. The upcoming AGM on 14 July 2021 may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

View our latest analysis for ICL Group

Comparing ICL Group Ltd's CEO Compensation With the industry

According to our data, ICL Group Ltd has a market capitalization of ₪29b, and paid its CEO total annual compensation worth US$3.4m over the year to December 2020. That's a fairly small increase of 3.9% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$997k.

For comparison, other companies in the same industry with market capitalizations ranging between ₪13b and ₪39b had a median total CEO compensation of US$1.2m. This suggests that Raviv Zoller is paid more than the median for the industry. Moreover, Raviv Zoller also holds ₪1.8m worth of ICL Group stock directly under their own name.

Component	2020	2019	Proportion (2020)
Salary	US$997k	US$978k	30%
Other	US$2.4m	US$2.3m	70%
Total Compensation	US$3.4m	US$3.2m	100%

Talking in terms of the industry, salary represented approximately 86% of total compensation out of all the companies we analyzed, while other remuneration made up 14% of the pie. It's interesting to note that ICL Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ICL Group Ltd's Growth

Over the last three years, ICL Group Ltd has shrunk its earnings per share by 59% per year. In the last year, its revenue is up 1.1%.

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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has ICL Group Ltd Been A Good Investment?

Most shareholders would probably be pleased with ICL Group Ltd for providing a total return of 44% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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 ICL Group that investors should look into moving forward.

Switching gears from ICL Group, 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.

If you’re looking to trade a wide range of investments, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade 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 (at) simplywallst.com.