Increases to CEO Compensation Might Be Put On Hold For Now at Polyram Plastic Industries LTD (TLV:POLP)

Key Insights

• Polyram Plastic Industries to hold its Annual General Meeting on 17th of December
• CEO Yuval Peleg's total compensation includes salary of ₪1.22m
• The total compensation is 407% higher than the average for the industry
• Over the past three years, Polyram Plastic Industries' EPS fell by 19% and over the past three years, the total shareholder return was 4.6%

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Share price growth at Polyram Plastic Industries LTD (TLV:POLP) has remained rather flat over the last few years and it may be because earnings has struggled to grow at all. Some of these issues will occupy shareholders' minds as the AGM rolls around on 17th of December. 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 the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

Check out our latest analysis for Polyram Plastic Industries

Comparing Polyram Plastic Industries LTD's CEO Compensation With The Industry

At the time of writing, our data shows that Polyram Plastic Industries LTD has a market capitalization of ₪1.1b, and reported total annual CEO compensation of ₪2.1m for the year to December 2024. That's slightly lower by 3.2% over the previous year. In particular, the salary of ₪1.22m, makes up a fairly large portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the Israel Chemicals industry with market capitalizations between ₪648m and ₪2.6b, we discovered that the median CEO total compensation of that group was ₪416k. Hence, we can conclude that Yuval Peleg is remunerated higher than the industry median.

On an industry level, around 58% of total compensation represents salary and 42% is other remuneration. There isn't a significant difference between Polyram Plastic Industries and the broader market, in terms of salary allocation in the overall compensation package. 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.

Polyram Plastic Industries LTD's Growth

Over the last three years, Polyram Plastic Industries LTD has shrunk its earnings per share by 19% per year. In the last year, its revenue is down 6.3%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Polyram Plastic Industries LTD Been A Good Investment?

With a total shareholder return of 4.6% over three years, Polyram Plastic Industries LTD has done okay by shareholders, but there's always room for improvement. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

To Conclude...

The lacklustre share price returns along with the lack of earnings growth makes us think that a strong rebound in the share price may be difficult. 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Polyram Plastic Industries (1 is potentially serious!) that you should be aware of before investing here.

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. 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.