Increases to CEO Compensation Might Be Put On Hold For Now at Arad Ltd. (TLV:ARD)

Key Insights

• Arad will host its Annual General Meeting on 17th of December
• Total pay for CEO Gabi Yankovitz includes US$377.7k salary
• The overall pay is 901% above the industry average
• Over the past three years, Arad's EPS grew by 5.1% and over the past three years, the total shareholder return was 16%

CEO Gabi Yankovitz has done a decent job of delivering relatively good performance at Arad Ltd. (TLV:ARD) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 17th of December. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Arad

Comparing Arad Ltd.'s CEO Compensation With The Industry

At the time of writing, our data shows that Arad Ltd. has a market capitalization of ₪1.3b, and reported total annual CEO compensation of US$1.2m for the year to December 2023. That's a notable increase of 8.1% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$378k.

On examining similar-sized companies in the Israel Electronic industry with market capitalizations between ₪718m and ₪2.9b, we discovered that the median CEO total compensation of that group was US$125k. Hence, we can conclude that Gabi Yankovitz is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	US$378k	US$356k	30%
Other	US$872k	US$800k	70%
Total Compensation	US$1.2m	US$1.2m	100%

On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. It's interesting to note that Arad allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Arad Ltd.'s Growth

Over the past three years, Arad Ltd. has seen its earnings per share (EPS) grow by 5.1% per year. Its revenue is up 4.5% over the last year.

We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Arad Ltd. Been A Good Investment?

Arad Ltd. has served shareholders reasonably well, with a total return of 16% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Arad that investors should think about before committing capital to this stock.

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.