Here's Why Sol-Gel Technologies Ltd.'s (NASDAQ:SLGL) CEO May Deserve A Raise

The impressive results at Sol-Gel Technologies Ltd. (NASDAQ:SLGL) recently will be great news for shareholders. At the upcoming AGM on 08 July 2021, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

See our latest analysis for Sol-Gel Technologies

Comparing Sol-Gel Technologies Ltd.'s CEO Compensation With the industry

At the time of writing, our data shows that Sol-Gel Technologies Ltd. has a market capitalization of US$285m, and reported total annual CEO compensation of US$636k for the year to December 2020. Notably, that's a decrease of 51% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$314k.

For comparison, other companies in the same industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$1.8m. In other words, Sol-Gel Technologies pays its CEO lower than the industry median.

Component	2020	2019	Proportion (2020)
Salary	US$314k	US$303k	49%
Other	US$322k	US$982k	51%
Total Compensation	US$636k	US$1.3m	100%

Talking in terms of the industry, salary represented approximately 28% of total compensation out of all the companies we analyzed, while other remuneration made up 72% of the pie. Sol-Gel Technologies pays out 49% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Sol-Gel Technologies Ltd.'s Growth Numbers

Over the past three years, Sol-Gel Technologies Ltd. has seen its earnings per share (EPS) grow by 35% per year. It saw its revenue drop 70% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Sol-Gel Technologies Ltd. Been A Good Investment?

We think that the total shareholder return of 76%, over three years, would leave most Sol-Gel Technologies Ltd. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Sol-Gel Technologies.

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.

If you decide to trade Sol-Gel Technologies, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.