Shareholders Will Probably Hold Off On Increasing BIG Shopping Centers Ltd's (TLV:BIG) CEO Compensation For The Time Being

Key Insights

• BIG Shopping Centers' Annual General Meeting to take place on 24th of September
• CEO Hay Galis' total compensation includes salary of ₪1.98m
• The total compensation is 113% higher than the average for the industry
• BIG Shopping Centers' three-year loss to shareholders was 19% while its EPS grew by 23% over the past three years

In the past three years, the share price of BIG Shopping Centers Ltd (TLV:BIG) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 24th of September. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. 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 BIG Shopping Centers

How Does Total Compensation For Hay Galis Compare With Other Companies In The Industry?

At the time of writing, our data shows that BIG Shopping Centers Ltd has a market capitalization of ₪9.6b, and reported total annual CEO compensation of ₪4.9m for the year to December 2023. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₪2.0m.

On comparing similar companies from the Israel Real Estate industry with market caps ranging from ₪7.6b to ₪24b, we found that the median CEO total compensation was ₪2.3m. Accordingly, our analysis reveals that BIG Shopping Centers Ltd pays Hay Galis north of the industry median. What's more, Hay Galis holds ₪22m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	₪2.0m	₪1.9m	40%
Other	₪2.9m	₪2.9m	60%
Total Compensation	₪4.9m	₪4.8m	100%

Speaking on an industry level, nearly 53% of total compensation represents salary, while the remainder of 47% is other remuneration. It's interesting to note that BIG Shopping Centers 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.

BIG Shopping Centers Ltd's Growth

BIG Shopping Centers Ltd has seen its earnings per share (EPS) increase by 23% a year over the past three years. It achieved revenue growth of 15% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has BIG Shopping Centers Ltd Been A Good Investment?

Since shareholders would have lost about 19% over three years, some BIG Shopping Centers Ltd investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

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. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for BIG Shopping Centers you should be aware of, and 1 of them is significant.

Switching gears from BIG Shopping Centers, 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.

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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.