We Think Some Shareholders May Hesitate To Increase Arad Ltd.'s (TLV:ARD) CEO Compensation

Key Insights

• Arad will host its Annual General Meeting on 28th of September
• Salary of US$384.4k is part of CEO Gabi Yankovitz's total remuneration
• The total compensation is 72% higher than the average for the industry
• Arad's total shareholder return over the past three years was 35% while its EPS grew by 9.7% over the past three years

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CEO Gabi Yankovitz has done a decent job of delivering relatively good performance at Arad Ltd. (TLV:ARD) recently. As shareholders go into the upcoming AGM on 28th of September, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. 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$964k for the year to December 2024. That's a notable decrease of 23% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$384k.

On examining similar-sized companies in the Israel Electronic industry with market capitalizations between ₪667m and ₪2.7b, we discovered that the median CEO total compensation of that group was US$560k. This suggests that Gabi Yankovitz is paid more than the median for the industry.

Speaking on an industry level, nearly 59% of total compensation represents salary, while the remainder of 41% is other remuneration. Arad pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Arad Ltd.'s Growth

Over the past three years, Arad Ltd. has seen its earnings per share (EPS) grow by 9.7% per year. Its revenue is up 13% over the last year.

We think the revenue growth is good. And, while modest, the EPS growth is noticeable. So while performance isn't amazing, we think it really does seem quite respectable. 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 Arad Ltd. Been A Good Investment?

Most shareholders would probably be pleased with Arad Ltd. for providing a total return of 35% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Arad that you should be aware of before investing.

Switching gears from Arad, 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.