Shareholders Will Most Likely Find Sella Capital Real Estate Ltd.'s (TLV:SLARL) CEO Compensation Acceptable

Key Insights

• Sella Capital Real Estate's Annual General Meeting to take place on 23rd of November
• CEO Gadi Elikam's total compensation includes salary of ₪2.11m
• The overall pay is comparable to the industry average
• Over the past three years, Sella Capital Real Estate's EPS fell by 11% and over the past three years, the total shareholder return was 61%

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The share price of Sella Capital Real Estate Ltd. (TLV:SLARL) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. Some of these issues will occupy shareholders' minds as the AGM rolls around on 23rd of November. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

See our latest analysis for Sella Capital Real Estate

How Does Total Compensation For Gadi Elikam Compare With Other Companies In The Industry?

Our data indicates that Sella Capital Real Estate Ltd. has a market capitalization of ₪2.8b, and total annual CEO compensation was reported as ₪3.4m for the year to December 2024. That's a modest increase of 4.9% on the prior year. We note that the salary portion, which stands at ₪2.11m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Israel REITs industry with market capitalizations ranging between ₪1.3b and ₪5.2b had a median total CEO compensation of ₪3.4m. From this we gather that Gadi Elikam is paid around the median for CEOs in the industry. What's more, Gadi Elikam holds ₪15m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 61% of total compensation out of all the companies we analyzed, while other remuneration made up 39% of the pie. Our data reveals that Sella Capital Real Estate allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Sella Capital Real Estate Ltd.'s Growth Numbers

Over the last three years, Sella Capital Real Estate Ltd. has shrunk its earnings per share by 11% per year. It achieved revenue growth of 7.0% over the last year.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Sella Capital Real Estate Ltd. Been A Good Investment?

Most shareholders would probably be pleased with Sella Capital Real Estate Ltd. for providing a total return of 61% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

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. In our study, we found 3 warning signs for Sella Capital Real Estate you should be aware of, and 1 of them is a bit concerning.

Switching gears from Sella Capital Real Estate, 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.