We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Delta Israel Brands Ltd's (TLV:DLTI) CEO For Now

Key Insights

• Delta Israel Brands' Annual General Meeting to take place on 29th of May
• Total pay for CEO Anat Bogner includes ₪1.58m salary
• Total compensation is 135% above industry average
• Delta Israel Brands' EPS declined by 0.2% over the past three years while total shareholder return over the past three years was 16%

Despite Delta Israel Brands Ltd's (TLV:DLTI) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. Some of these issues will occupy shareholders' minds as the AGM rolls around on 29th of May. 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.

View our latest analysis for Delta Israel Brands

How Does Total Compensation For Anat Bogner Compare With Other Companies In The Industry?

Our data indicates that Delta Israel Brands Ltd has a market capitalization of ₪1.7b, and total annual CEO compensation was reported as ₪2.1m for the year to December 2023. This means that the compensation hasn't changed much from last year. In particular, the salary of ₪1.58m, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the Israel Specialty Retail industry with market capitalizations between ₪737m and ₪2.9b, we discovered that the median CEO total compensation of that group was ₪902k. Hence, we can conclude that Anat Bogner is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	₪1.6m	₪1.3m	74%
Other	₪543k	₪739k	26%
Total Compensation	₪2.1m	₪2.1m	100%

Talking in terms of the industry, salary represented approximately 70% of total compensation out of all the companies we analyzed, while other remuneration made up 30% of the pie. Delta Israel Brands is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Delta Israel Brands Ltd's Growth Numbers

Over the last three years, Delta Israel Brands Ltd has not seen its earnings per share change much, though they have deteriorated slightly. Its revenue is up 6.4% over the last year.

Its a bit disappointing to see that the company has failed to grow its EPS. The fairly low revenue growth fails to impress given that the EPS is down. 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 Delta Israel Brands Ltd Been A Good Investment?

Delta Israel Brands Ltd has served shareholders reasonably well, with a total return of 16% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these 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 can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Delta Israel Brands that investors should think about before committing capital to this stock.

Switching gears from Delta Israel Brands, 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.