Increases to CEO Compensation Might Be Put On Hold For Now at OPC Energy Ltd. (TLV:OPCE)

Key Insights

• OPC Energy's Annual General Meeting to take place on 18th of December
• Total pay for CEO Giora Almogi includes ₪4.10m salary
• The total compensation is 1,949% higher than the average for the industry
• OPC Energy's three-year loss to shareholders was 8.1% while its EPS grew by 87% over the past three years

As many shareholders of OPC Energy Ltd. (TLV:OPCE) will be aware, they have not made a gain on their investment in the past three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 18th of December could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for OPC Energy

Comparing OPC Energy Ltd.'s CEO Compensation With The Industry

At the time of writing, our data shows that OPC Energy Ltd. has a market capitalization of ₪7.6b, and reported total annual CEO compensation of ₪8.1m for the year to December 2023. We note that's a decrease of 29% compared to last year. We note that the salary of ₪4.10m makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the Israel Renewable Energy industry with market capitalizations ranging between ₪3.6b and ₪11b had a median total CEO compensation of ₪396k. Hence, we can conclude that Giora Almogi is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	₪4.1m	₪3.3m	51%
Other	₪4.0m	₪8.2m	49%
Total Compensation	₪8.1m	₪11m	100%

On an industry level, roughly 54% of total compensation represents salary and 46% is other remuneration. Although there is a difference in how total compensation is set, OPC Energy 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.

A Look at OPC Energy Ltd.'s Growth Numbers

OPC Energy Ltd. has seen its earnings per share (EPS) increase by 87% a year over the past three years. It achieved revenue growth of 12% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 OPC Energy Ltd. Been A Good Investment?

With a three year total loss of 8.1% for the shareholders, OPC Energy Ltd. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid 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. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. 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. We identified 3 warning signs for OPC Energy (1 is potentially serious!) that you should be aware of before investing here.

Switching gears from OPC Energy, 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.