SolarEdge Technologies, Inc.'s (NASDAQ:SEDG) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• SolarEdge Technologies' Annual General Meeting to take place on 5th of June
• Total pay for CEO Zivi Lando includes US$816.9k salary
• Total compensation is similar to the industry average
• Over the past three years, SolarEdge Technologies' EPS fell by 31% and over the past three years, the total loss to shareholders 80%

The results at SolarEdge Technologies, Inc. (NASDAQ:SEDG) have been quite disappointing recently and CEO Zivi Lando bears some responsibility for this. 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for SolarEdge Technologies

Comparing SolarEdge Technologies, Inc.'s CEO Compensation With The Industry

Our data indicates that SolarEdge Technologies, Inc. has a market capitalization of US$2.9b, and total annual CEO compensation was reported as US$7.5m for the year to December 2023. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$817k.

On comparing similar companies from the American Semiconductor industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$7.3m. From this we gather that Zivi Lando is paid around the median for CEOs in the industry. Moreover, Zivi Lando also holds US$2.1m worth of SolarEdge Technologies stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	US$817k	US$851k	11%
Other	US$6.7m	US$6.6m	89%
Total Compensation	US$7.5m	US$7.4m	100%

Talking in terms of the industry, salary represented approximately 11% of total compensation out of all the companies we analyzed, while other remuneration made up 89% of the pie. There isn't a significant difference between SolarEdge Technologies and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at SolarEdge Technologies, Inc.'s Growth Numbers

SolarEdge Technologies, Inc. has reduced its earnings per share by 31% a year over the last three years. Its revenue is down 34% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet 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 SolarEdge Technologies, Inc. Been A Good Investment?

The return of -80% over three years would not have pleased SolarEdge Technologies, Inc. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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, the board will get the chance to explain the steps it plans to take to improve business performance.

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

Important note: SolarEdge Technologies is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.