Yahoo Finance Shareholders Will Most Likely Find Amiad Water Systems Ltd.'s (LON:AFS) CEO Compensation Acceptable
The share price of Amiad Water Systems Ltd. (LON:AFS) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 29 July 2021. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.
Check out our latest analysis for Amiad Water Systems
Comparing Amiad Water Systems Ltd.'s CEO Compensation With the industry
At the time of writing, our data shows that Amiad Water Systems Ltd. has a market capitalization of UK£85m, and reported total annual CEO compensation of US$439k for the year to December 2020. That's a notable increase of 18% on last year. Notably, the salary which is US$357.6k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below UK£145m, we found that the median total CEO compensation was US$449k. From this we gather that Dori Ivzori is paid around the median for CEOs in the industry.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$358k | US$347k | 81% |
Other | US$82k | US$25k | 19% |
Total Compensation | US$439k | US$372k | 100% |
On an industry level, roughly 69% of total compensation represents salary and 31% is other remuneration. Amiad Water Systems pays out 81% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Amiad Water Systems Ltd.'s Growth Numbers
Amiad Water Systems Ltd. has reduced its earnings per share by 13% a year over the last three years. Its revenue is down 9.5% over the previous year.
The decline in EPS is a bit concerning. 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 Amiad Water Systems Ltd. Been A Good Investment?
Amiad Water Systems Ltd. has not done too badly by shareholders, with a total return of 6.5%, over three years. It would be nice to see that metric improve in the future. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.
To Conclude...
Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Amiad Water Systems.
Switching gears from Amiad Water Systems, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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.
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