We Think Some Shareholders May Hesitate To Increase Safe-T Group Ltd's (TLV:SFET) CEO Compensation

In the past three years, the share price of Safe-T Group Ltd (TLV:SFET) has struggled to grow and now shareholders are sitting on a loss. 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 19 September 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Safe-T Group

Comparing Safe-T Group Ltd's CEO Compensation With the industry

At the time of writing, our data shows that Safe-T Group Ltd has a market capitalization of ₪116m, and reported total annual CEO compensation of US$489k for the year to December 2020. That's a notable increase of 53% on last year. We note that the salary portion, which stands at US$404.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below ₪645m, reported a median total CEO compensation of US$356k. Hence, we can conclude that Shachar Daniel is remunerated higher than the industry median. What's more, Shachar Daniel holds ₪256k worth of shares in the company in their own name.

Component	2020	2019	Proportion (2020)
Salary	US$404k	US$243k	83%
Other	US$85k	US$77k	17%
Total Compensation	US$489k	US$320k	100%

Talking in terms of the industry, salary represented approximately 81% of total compensation out of all the companies we analyzed, while other remuneration made up 19% of the pie. Our data reveals that Safe-T Group allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Safe-T Group Ltd's Growth

Safe-T Group Ltd's earnings per share (EPS) grew 101% per year over the last three years. In the last year, its revenue is up 30%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Safe-T Group Ltd Been A Good Investment?

Few Safe-T Group Ltd shareholders would feel satisfied with the return of -100% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. 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 be keen to know what's holding the stock back when earnings have grown. 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 pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which is concerning) in Safe-T Group we think you should know about.

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.

If you're looking for stocks to buy, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.