Shareholders May Find It Hard To Justify Increasing Bubbles Intergroup Ltd's (TLV:BBLS) CEO Compensation For Now

Key Insights

• Bubbles Intergroup's Annual General Meeting to take place on 4th of November
• CEO Yehuda Lazar's total compensation includes salary of ₪900.0k
• The overall pay is comparable to the industry average
• Over the past three years, Bubbles Intergroup's EPS grew by 40% and over the past three years, the total loss to shareholders 57%

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The underwhelming share price performance of Bubbles Intergroup Ltd (TLV:BBLS) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 4th of November could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Bubbles Intergroup

How Does Total Compensation For Yehuda Lazar Compare With Other Companies In The Industry?

At the time of writing, our data shows that Bubbles Intergroup Ltd has a market capitalization of ₪23m, and reported total annual CEO compensation of ₪900k for the year to December 2024. That's a modest increase of 7.1% on the prior year. Notably, the salary of ₪900k is the entirety of the CEO compensation.

On comparing similar-sized companies in the Israel Software industry with market capitalizations below ₪652m, we found that the median total CEO compensation was ₪1.3m. So it looks like Bubbles Intergroup compensates Yehuda Lazar in line with the median for the industry. Furthermore, Yehuda Lazar directly owns ₪7.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. Speaking on a company level, Bubbles Intergroup prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Bubbles Intergroup Ltd's Growth

Bubbles Intergroup Ltd's earnings per share (EPS) grew 40% per year over the last three years. In the last year, its revenue is down 21%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Bubbles Intergroup Ltd Been A Good Investment?

The return of -57% over three years would not have pleased Bubbles Intergroup Ltd shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Bubbles Intergroup rewards its CEO solely through a salary, ignoring non-salary benefits completely. 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 probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 4 warning signs for Bubbles Intergroup that investors should think about before committing capital to this stock.

Switching gears from Bubbles Intergroup, 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.