Here's Why Shareholders May Want To Be Cautious With Increasing Idomoo Ltd.'s (TLV:IDMO) CEO Pay Packet

Key Insights

• Idomoo to hold its Annual General Meeting on 18th of August
• Salary of US$289.0k is part of CEO Yaron Kalish's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, Idomoo's EPS grew by 102% and over the past three years, the total loss to shareholders 85%

The underwhelming share price performance of Idomoo Ltd. (TLV:IDMO) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 18th of August. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Idomoo

Comparing Idomoo Ltd.'s CEO Compensation With The Industry

Our data indicates that Idomoo Ltd. has a market capitalization of ₪37m, and total annual CEO compensation was reported as US$463k for the year to December 2023. We note that's a decrease of 18% compared to last year. Notably, the salary which is US$289.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the Israel Software industry with market capitalizations below ₪746m, we found that the median total CEO compensation was US$373k. This suggests that Idomoo remunerates its CEO largely in line with the industry average.

Component	2023	2022	Proportion (2023)
Salary	US$289k	US$311k	62%
Other	US$174k	US$253k	38%
Total Compensation	US$463k	US$564k	100%

On an industry level, roughly 72% of total compensation represents salary and 28% is other remuneration. Idomoo sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Idomoo Ltd.'s Growth

Idomoo Ltd.'s earnings per share (EPS) grew 102% per year over the last three years. It achieved revenue growth of 19% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Idomoo Ltd. Been A Good Investment?

The return of -85% over three years would not have pleased Idomoo Ltd. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 5 warning signs for Idomoo that investors should look into moving forward.

Switching gears from Idomoo, 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.