Shareholders Will Probably Hold Off On Increasing Carasso Motors Ltd.'s (TLV:CRSM) CEO Compensation For The Time Being

Key Insights

• Carasso Motors' Annual General Meeting to take place on 30th of September
• Salary of ₪2.02m is part of CEO Izik Weitz's total remuneration
• The total compensation is 700% higher than the average for the industry
• Over the past three years, Carasso Motors' EPS fell by 5.5% and over the past three years, the total shareholder return was 59%

The share price of Carasso Motors Ltd. (TLV:CRSM) 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. The upcoming AGM on 30th of September may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for Carasso Motors

How Does Total Compensation For Izik Weitz Compare With Other Companies In The Industry?

According to our data, Carasso Motors Ltd. has a market capitalization of ₪1.7b, and paid its CEO total annual compensation worth ₪9.5m over the year to December 2023. That's a notable decrease of 44% on 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 Specialty Retail industry with market caps ranging from ₪758m to ₪3.0b, we found that the median CEO total compensation was ₪1.2m. Hence, we can conclude that Izik Weitz is remunerated higher than the industry median. What's more, Izik Weitz holds ₪41m 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	₪2.0m	21%
Other	₪7.5m	₪15m	79%
Total Compensation	₪9.5m	₪17m	100%

Speaking on an industry level, nearly 74% of total compensation represents salary, while the remainder of 26% is other remuneration. It's interesting to note that Carasso Motors allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Carasso Motors Ltd.'s Growth

Over the last three years, Carasso Motors Ltd. has shrunk its earnings per share by 5.5% per year. Its revenue is up 9.4% over the last year.

The decline in EPS is a bit concerning. 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. 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 Carasso Motors Ltd. Been A Good Investment?

We think that the total shareholder return of 59%, over three years, would leave most Carasso Motors Ltd. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Carasso Motors you should be aware of, and 1 of them is a bit unpleasant.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.