We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Speedvalue Ltd's (TLV:SPDV) CEO For Now

Key Insights

• Speedvalue to hold its Annual General Meeting on 6th of October
• CEO Tali Shem Tov's total compensation includes salary of ₪818.0k
• Total compensation is 373% above industry average
• Over the past three years, Speedvalue's EPS fell by 12% and over the past three years, the total loss to shareholders 62%

The underwhelming share price performance of Speedvalue Ltd (TLV:SPDV) in the past three years would have disappointed many shareholders. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. The AGM coming up on 6th of October will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

See our latest analysis for Speedvalue

Comparing Speedvalue Ltd's CEO Compensation With The Industry

At the time of writing, our data shows that Speedvalue Ltd has a market capitalization of ₪60m, and reported total annual CEO compensation of ₪970k for the year to December 2023. That's a slight decrease of 5.5% on the prior year. We note that the salary portion, which stands at ₪818.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Israel IT industry with market capitalizations below ₪746m, we found that the median total CEO compensation was ₪205k. This suggests that Tali Shem Tov is paid more than the median for the industry. What's more, Tali Shem Tov holds ₪6.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	₪818k	₪784k	84%
Other	₪152k	₪242k	16%
Total Compensation	₪970k	₪1.0m	100%

On an industry level, around 63% of total compensation represents salary and 37% is other remuneration. It's interesting to note that Speedvalue pays out a greater portion of remuneration through salary, compared to the 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.

Speedvalue Ltd's Growth

Over the last three years, Speedvalue Ltd has shrunk its earnings per share by 12% per year. Its revenue is up 38% over the last year.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Speedvalue Ltd Been A Good Investment?

The return of -62% over three years would not have pleased Speedvalue Ltd shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. In 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 is in line with their expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Speedvalue (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Speedvalue, 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.