Here's Why Shareholders Should Examine Senstar Technologies Ltd.'s (NASDAQ:SNT) CEO Compensation Package More Closely

The results at Senstar Technologies Ltd. (NASDAQ:SNT) have been quite disappointing recently and CEO Dror Sharon bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 06 December 2022. 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. We present the case why we think CEO compensation is out of sync with company performance.

Our analysis indicates that SNT is potentially undervalued!

How Does Total Compensation For Dror Sharon Compare With Other Companies In The Industry?

Our data indicates that Senstar Technologies Ltd. has a market capitalization of US$34m, and total annual CEO compensation was reported as US$1.1m for the year to December 2021. Notably, that's an increase of 34% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$338k.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$408k. Accordingly, our analysis reveals that Senstar Technologies Ltd. pays Dror Sharon north of the industry median.

Speaking on an industry level, nearly 31% of total compensation represents salary, while the remainder of 69% is other remuneration. Our data reveals that Senstar Technologies allocates salary more or less in line with the wider market. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Senstar Technologies Ltd.'s Growth

Over the last three years, Senstar Technologies Ltd. has shrunk its earnings per share by 75% per year. In the last year, its revenue is down 59%.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Senstar Technologies Ltd. Been A Good Investment?

With a total shareholder return of -36% over three years, Senstar Technologies Ltd. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Senstar Technologies that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.