How Is Rekah Pharmaceutical Industry's (TLV:REKA) CEO Paid Relative To Peers?

Mordechai Elgrabli has been the CEO of Rekah Pharmaceutical Industry Ltd. (TLV:REKA) since 2015, 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.

See our latest analysis for Rekah Pharmaceutical Industry

How Does Total Compensation For Mordechai Elgrabli Compare With Other Companies In The Industry?

According to our data, Rekah Pharmaceutical Industry Ltd. has a market capitalization of ₪289m, and paid its CEO total annual compensation worth ₪832k over the year to December 2019. That's a fairly small increase of 3.9% over the previous year. Notably, the salary of ₪832k is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under ₪650m, the reported median total CEO compensation was ₪152k. This suggests that Mordechai Elgrabli is paid more than the median for the industry. Moreover, Mordechai Elgrabli also holds ₪50m worth of Rekah Pharmaceutical Industry stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 83% of total compensation out of all the companies we analyzed, while other remuneration made up 17% of the pie. Speaking on a company level, Rekah Pharmaceutical Industry prefers to tread along a traditional path, disbursing all compensation through a salary. 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.

Rekah Pharmaceutical Industry Ltd.'s Growth

Over the past three years, Rekah Pharmaceutical Industry Ltd. has seen its earnings per share (EPS) grow by 116% per year. Its revenue is up 19% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Rekah Pharmaceutical Industry Ltd. Been A Good Investment?

With a three year total loss of 30% for the shareholders, Rekah Pharmaceutical Industry Ltd. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

Rekah Pharmaceutical Industry pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, Rekah Pharmaceutical Industry pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, we must not forget that the EPS growth has been very strong, but it's disappointing to see negative shareholder returns over the same period. Although we'd stop short of calling it inappropriate, we think Mordechai is earning a very handsome sum.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 2 warning signs for Rekah Pharmaceutical Industry (of which 1 makes us a bit uncomfortable!) 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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