It's Unlikely That Eltek Ltd.'s (NASDAQ:ELTK) CEO Will See A Huge Pay Rise This Year

Performance at Eltek Ltd. (NASDAQ:ELTK) has been reasonably good and CEO Eli Yaffe has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 03 June 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Eltek

How Does Total Compensation For Eli Yaffe Compare With Other Companies In The Industry?

At the time of writing, our data shows that Eltek Ltd. has a market capitalization of US$33m, and reported total annual CEO compensation of US$644k for the year to December 2020. We note that's an increase of 11% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$273k.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$453k. This suggests that Eli Yaffe is paid more than the median for the industry.

Component	2020	2019	Proportion (2020)
Salary	US$273k	US$238k	42%
Other	US$371k	US$340k	58%
Total Compensation	US$644k	US$578k	100%

Talking in terms of the industry, salary represented approximately 29% of total compensation out of all the companies we analyzed, while other remuneration made up 71% of the pie. Eltek pays out 42% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Eltek Ltd.'s Growth Numbers

Eltek Ltd.'s earnings per share (EPS) grew 114% per year over the last three years. Its revenue is down 1.3% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Eltek Ltd. Been A Good Investment?

With a total shareholder return of 30% over three years, Eltek Ltd. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Eltek that you should be aware of before investing.

Important note: Eltek 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.

When trading Eltek or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide 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.