Increases to CEO Compensation Might Be Put On Hold For Now at Hamashbir 365 Ltd (TLV:MSBI)

Key Insights

• Hamashbir 365's Annual General Meeting to take place on 2nd of September
• Total pay for CEO Rami Shavit includes ₪1.90m salary
• Total compensation is 173% above industry average
• Hamashbir 365's total shareholder return over the past three years was 23% while its EPS was down 37% over the past three years

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The share price of Hamashbir 365 Ltd (TLV:MSBI) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 2nd of September. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. 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 Hamashbir 365

Comparing Hamashbir 365 Ltd's CEO Compensation With The Industry

According to our data, Hamashbir 365 Ltd has a market capitalization of ₪207m, and paid its CEO total annual compensation worth ₪2.0m over the year to December 2024. That's a notable increase of 23% on last year. In particular, the salary of ₪1.90m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Israel Multiline Retail industry with market capitalizations below ₪676m, we found that the median total CEO compensation was ₪736k. Hence, we can conclude that Rami Shavit is remunerated higher than the industry median. Moreover, Rami Shavit also holds ₪119m worth of Hamashbir 365 stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₪1.9m	₪1.6m	94%
Other	₪115k	-	6%
Total Compensation	₪2.0m	₪1.6m	100%

On an industry level, roughly 68% of total compensation represents salary and 32% is other remuneration. According to our research, Hamashbir 365 has allocated a higher percentage of pay to salary in comparison to the wider industry. 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.

A Look at Hamashbir 365 Ltd's Growth Numbers

Over the last three years, Hamashbir 365 Ltd has shrunk its earnings per share by 37% per year. Its revenue is up 7.5% over the last year.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Hamashbir 365 Ltd Been A Good Investment?

Hamashbir 365 Ltd has served shareholders reasonably well, with a total return of 23% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 3 warning signs for Hamashbir 365 that investors should be aware of in a dynamic business environment.

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. 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.