What Can We Make Of Evogene's (TLV:EVGN) CEO Compensation?

Ofer Haviv has been the CEO of Evogene Ltd. (TLV:EVGN) since 2004, and this article will examine the executive's compensation with respect to the overall performance of the company. 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 Evogene

Comparing Evogene Ltd.'s CEO Compensation With the industry

Our data indicates that Evogene Ltd. has a market capitalization of ₪344m, and total annual CEO compensation was reported as US$538k for the year to December 2019. That's a modest increase of 4.1% on the prior year. We note that the salary portion, which stands at US$366.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under ₪663m, the reported median total CEO compensation was US$433k. So it looks like Evogene compensates Ofer Haviv in line with the median for the industry.

On an industry level, around 68% of total compensation represents salary and 32% is other remuneration. Although there is a difference in how total compensation is set, Evogene more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Evogene Ltd.'s Growth

Evogene Ltd.'s earnings per share (EPS) grew 2.6% per year over the last three years. In the last year, its revenue is down 36%.

We would prefer it if there was revenue growth, but the modest EPSgrowth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Evogene Ltd. Been A Good Investment?

Given the total shareholder loss of 26% over three years, many shareholders in Evogene Ltd. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, Ofer is compensated close to the median for companies of its size, and which belong to the same industry. But with negative shareholder returns and unimpressive EPS growth, shareholders will surely be disturbed. CEO pay isn't exceptionally high, but considering poor performance, shareholders will likely hold off support for a raise until results improve.

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. That's why we did our research, and identified 4 warning signs for Evogene (of which 2 are a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

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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