Here's Why It's Unlikely That Arko Corp.'s (NASDAQ:ARKO) CEO Will See A Pay Rise This Year

Key Insights

• Arko will host its Annual General Meeting on 5th of June
• Salary of US$1.18m is part of CEO Arie Kotler's total remuneration
• The total compensation is similar to the average for the industry
• Arko's three-year loss to shareholders was 48% while its EPS was down 64% over the past three years

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Shareholders will probably not be too impressed with the underwhelming results at Arko Corp. (NASDAQ:ARKO) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 5th of June. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Arko

How Does Total Compensation For Arie Kotler Compare With Other Companies In The Industry?

Our data indicates that Arko Corp. has a market capitalization of US$516m, and total annual CEO compensation was reported as US$4.8m for the year to December 2024. Notably, that's a decrease of 21% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.

On examining similar-sized companies in the American Specialty Retail industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$4.8m. This suggests that Arko remunerates its CEO largely in line with the industry average. What's more, Arie Kotler holds US$54m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 17% of total compensation out of all the companies we analyzed, while other remuneration made up 83% of the pie. According to our research, Arko has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Arko Corp.'s Growth Numbers

Over the last three years, Arko Corp. has shrunk its earnings per share by 64% per year. It saw its revenue drop 9.7% over the last year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Arko Corp. Been A Good Investment?

With a total shareholder return of -48% over three years, Arko Corp. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 4 warning signs (and 1 which is a bit concerning) in Arko we think you should know about.

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. 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.