It's Unlikely That The CEO Of Orad Ltd (TLV:ORAD) Will See A Huge Pay Rise This Year

Key Insights

• Orad will host its Annual General Meeting on 11th of September
• Salary of ₪974.0k is part of CEO Yossi Gofer's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, Orad's EPS grew by 69% and over the past three years, the total loss to shareholders 11%

In the past three years, the share price of Orad Ltd (TLV:ORAD) has struggled to generate growth for its shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 11th of September. 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 Orad

Comparing Orad Ltd's CEO Compensation With The Industry

Our data indicates that Orad Ltd has a market capitalization of ₪55m, and total annual CEO compensation was reported as ₪1.2m for the year to December 2023. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at ₪974.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Israel Electronic industry with market capitalizations under ₪744m, the reported median total CEO compensation was ₪1.6m. This suggests that Orad remunerates its CEO largely in line with the industry average. Moreover, Yossi Gofer also holds ₪762k worth of Orad stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	₪974k	₪916k	81%
Other	₪225k	₪303k	19%
Total Compensation	₪1.2m	₪1.2m	100%

On an industry level, roughly 67% of total compensation represents salary and 33% is other remuneration. It's interesting to note that Orad pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Orad Ltd's Growth Numbers

Over the past three years, Orad Ltd has seen its earnings per share (EPS) grow by 69% per year. It saw its revenue drop 1.4% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in 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 Orad Ltd Been A Good Investment?

Since shareholders would have lost about 11% over three years, some Orad Ltd investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Orad that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.