Here's Why Shareholders May Want To Be Cautious With Increasing G City Ltd's (TLV:GCT) CEO Pay Packet
Key Insights
- G City to hold its Annual General Meeting on 31st of December
- Salary of ₪3.73m is part of CEO Chaim Katzman's total remuneration
- Total compensation is 177% above industry average
- Over the past three years, G City's EPS grew by 64% and over the past three years, the total loss to shareholders 15%
In the past three years, the share price of G City Ltd (TLV:GCT) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 31st of December. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
See our latest analysis for G City
How Does Total Compensation For Chaim Katzman Compare With Other Companies In The Industry?
Our data indicates that G City Ltd has a market capitalization of ₪1.6b, and total annual CEO compensation was reported as ₪5.8m for the year to December 2024. That's a slight decrease of 4.8% on the prior year. We note that the salary portion, which stands at ₪3.73m constitutes the majority of total compensation received by the CEO.
On examining similar-sized companies in the Israel Real Estate industry with market capitalizations between ₪637m and ₪2.5b, we discovered that the median CEO total compensation of that group was ₪2.1m. Hence, we can conclude that Chaim Katzman is remunerated higher than the industry median. Moreover, Chaim Katzman also holds ₪3.4m worth of G City stock directly under their own name.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | ₪3.7m | ₪3.9m | 65% |
| Other | ₪2.0m | ₪2.2m | 35% |
| Total Compensation | ₪5.8m | ₪6.1m | 100% |
Speaking on an industry level, nearly 62% of total compensation represents salary, while the remainder of 38% is other remuneration. Our data reveals that G City allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at G City Ltd's Growth Numbers
Over the past three years, G City Ltd has seen its earnings per share (EPS) grow by 64% per year. Its revenue is down 3.2% over the previous year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has G City Ltd Been A Good Investment?
Given the total shareholder loss of 15% over three years, many shareholders in G City Ltd are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
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 3 warning signs for G City (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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.