Stock Analysis

Does Overseas Commerce's (TLV:OVRS) CEO Salary Compare Well With Industry Peers?

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Moti Glik became the CEO of Overseas Commerce Ltd. (TLV:OVRS) in 1991, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Overseas Commerce

Comparing Overseas Commerce Ltd.'s CEO Compensation With the industry

Our data indicates that Overseas Commerce Ltd. has a market capitalization of ₪208m, and total annual CEO compensation was reported as ₪2.3m for the year to December 2019. We note that's a decrease of 20% compared to last year. Notably, the salary which is ₪1.87m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below ₪667m, reported a median total CEO compensation of ₪675k. Hence, we can conclude that Moti Glik is remunerated higher than the industry median. What's more, Moti Glik holds ₪224k worth of shares in the company in their own name.

Component20192016Proportion (2019)
Salary ₪1.9m ₪1.6m 83%
Other ₪385k ₪1.2m 17%
Total Compensation₪2.3m ₪2.8m100%

Talking in terms of the industry, salary represented approximately 78% of total compensation out of all the companies we analyzed, while other remuneration made up 22% of the pie. Although there is a difference in how total compensation is set, Overseas Commerce more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

TASE:OVRS CEO Compensation November 26th 2020

A Look at Overseas Commerce Ltd.'s Growth Numbers

Over the last three years, Overseas Commerce Ltd. has shrunk its earnings per share by 5.7% per year. Its revenue is down 1.2% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Overseas Commerce Ltd. Been A Good Investment?

With a three year total loss of 34% for the shareholders, Overseas Commerce Ltd. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, Moti is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

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 4 warning signs for Overseas Commerce you should be aware of, and 2 of them are concerning.

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. 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.
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