Shareholders Will Probably Hold Off On Increasing PlantArc Bio Ltd.'s (TLV:PLNT) CEO Compensation For The Time Being

Key Insights

• PlantArc Bio's Annual General Meeting to take place on 15th of November
• Total pay for CEO Dror Shalitin includes ₪486.0k salary
• The total compensation is similar to the average for the industry
• PlantArc Bio's EPS grew by 44% over the past three years while total shareholder loss over the past three years was 84%

The underwhelming share price performance of PlantArc Bio Ltd. (TLV:PLNT) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 15th of November. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for PlantArc Bio

Comparing PlantArc Bio Ltd.'s CEO Compensation With The Industry

According to our data, PlantArc Bio Ltd. has a market capitalization of ₪5.7m, and paid its CEO total annual compensation worth ₪751k over the year to December 2023. That's a notable decrease of 27% on last year. Notably, the salary which is ₪486.0k, represents most of the total compensation being paid.

For comparison, other companies in the Israel Biotechs industry with market capitalizations below ₪744m, reported a median total CEO compensation of ₪948k. This suggests that PlantArc Bio remunerates its CEO largely in line with the industry average. Moreover, Dror Shalitin also holds ₪525k worth of PlantArc Bio stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	₪486k	₪485k	65%
Other	₪265k	₪548k	35%
Total Compensation	₪751k	₪1.0m	100%

Talking in terms of the industry, salary represented approximately 79% of total compensation out of all the companies we analyzed, while other remuneration made up 21% of the pie. It's interesting to note that PlantArc Bio allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at PlantArc Bio Ltd.'s Growth Numbers

Over the past three years, PlantArc Bio Ltd. has seen its earnings per share (EPS) grow by 44% per year. In the last year, its revenue is up 114%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has PlantArc Bio Ltd. Been A Good Investment?

The return of -84% over three years would not have pleased PlantArc Bio Ltd. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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 PlantArc Bio (of which 3 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from PlantArc Bio, 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.

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.