Shareholders May Be Wary Of Increasing Solaer Renewable Energies Ltd's (TLV:SOLR) CEO Compensation Package

Key Insights

• Solaer Renewable Energies' Annual General Meeting to take place on 23rd of September
• Salary of ₪1.01m is part of CEO Alon Segev's total remuneration
• The overall pay is 492% above the industry average
• Solaer Renewable Energies' EPS declined by 20% over the past three years while total shareholder loss over the past three years was 15%

Shareholders will probably not be too impressed with the underwhelming results at Solaer Renewable Energies Ltd (TLV:SOLR) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 23rd of September. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Solaer Renewable Energies

How Does Total Compensation For Alon Segev Compare With Other Companies In The Industry?

At the time of writing, our data shows that Solaer Renewable Energies Ltd has a market capitalization of ₪531m, and reported total annual CEO compensation of ₪1.1m for the year to December 2023. That's a notable increase of 40% on last year. We note that the salary portion, which stands at ₪1.01m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Israel Renewable Energy industry with market capitalizations below ₪750m, reported a median total CEO compensation of ₪187k. This suggests that Alon Segev is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	₪1.0m	₪769k	91%
Other	₪105k	₪22k	9%
Total Compensation	₪1.1m	₪791k	100%

Speaking on an industry level, nearly 54% of total compensation represents salary, while the remainder of 46% is other remuneration. Solaer Renewable Energies is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Solaer Renewable Energies Ltd's Growth Numbers

Solaer Renewable Energies Ltd has reduced its earnings per share by 20% a year over the last three years. Its revenue is up 13% over the last year.

The decline in EPS is a bit concerning. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Solaer Renewable Energies Ltd Been A Good Investment?

Since shareholders would have lost about 15% over three years, some Solaer Renewable Energies Ltd investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in 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 did our research and identified 3 warning signs (and 2 which are concerning) in Solaer Renewable Energies we think you should know about.

Switching gears from Solaer Renewable Energies, 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.