Shareholders May Be A Bit More Conservative With Tondo Smart Ltd's (TLV:TNDO) CEO Compensation For Now

Key Insights

• Tondo Smart to hold its Annual General Meeting on 28th of August
• Salary of ₪976.0k is part of CEO Guy Saadi's total remuneration
• The overall pay is comparable to the industry average
• Tondo Smart's EPS grew by 43% over the past three years while total shareholder loss over the past three years was 22%

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Shareholders of Tondo Smart Ltd (TLV:TNDO) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 28th of August. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. 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 Tondo Smart

Comparing Tondo Smart Ltd's CEO Compensation With The Industry

According to our data, Tondo Smart Ltd has a market capitalization of ₪65m, and paid its CEO total annual compensation worth ₪1.1m over the year to December 2024. We note that's an increase of 20% above last year. Notably, the salary which is ₪976.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the Israel Electronic industry with market capitalizations below ₪681m, we found that the median total CEO compensation was ₪1.5m. So it looks like Tondo Smart compensates Guy Saadi in line with the median for the industry. What's more, Guy Saadi holds ₪5.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 52% of total compensation represents salary and 48% is other remuneration. According to our research, Tondo Smart has allocated a higher percentage of pay to salary in comparison to the wider 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.

A Look at Tondo Smart Ltd's Growth Numbers

Tondo Smart Ltd's earnings per share (EPS) grew 43% per year over the last three years. Its revenue is down 15% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Tondo Smart Ltd Been A Good Investment?

With a three year total loss of 22% for the shareholders, Tondo Smart Ltd would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

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. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 5 warning signs for Tondo Smart you should be aware of, and 4 of them make us uncomfortable.

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.