Here's Why Shareholders Should Examine Allot Ltd.'s (NASDAQ:ALLT) CEO Compensation Package More Closely

Key Insights

• Allot to hold its Annual General Meeting on 13th of December
• Salary of US$286.2k is part of CEO Erez Antebi's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, Allot's EPS fell by 59% and over the past three years, the total loss to shareholders 87%

Allot Ltd. (NASDAQ:ALLT) has not performed well recently and CEO Erez Antebi will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 13th of December. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Allot

Comparing Allot Ltd.'s CEO Compensation With The Industry

According to our data, Allot Ltd. has a market capitalization of US$48m, and paid its CEO total annual compensation worth US$782k over the year to December 2022. That's a notable decrease of 10% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$286k.

In comparison with other companies in the American Software industry with market capitalizations under US$200m, the reported median total CEO compensation was US$630k. So it looks like Allot compensates Erez Antebi in line with the median for the industry. What's more, Erez Antebi holds US$531k worth of shares in the company in their own name.

Component	2022	2021	Proportion (2022)
Salary	US$286k	US$297k	37%
Other	US$496k	US$575k	63%
Total Compensation	US$782k	US$872k	100%

On an industry level, roughly 12% of total compensation represents salary and 88% is other remuneration. It's interesting to note that Allot pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Allot Ltd.'s Growth

Allot Ltd. has reduced its earnings per share by 59% a year over the last three years. In the last year, its revenue is down 22%.

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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Allot Ltd. Been A Good Investment?

Few Allot Ltd. shareholders would feel satisfied with the return of -87% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a 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. That's why we did our research, and identified 2 warning signs for Allot (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Important note: Allot 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.

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

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.