Here's Why Shareholders May Want To Be Cautious With Increasing Lapidoth Capital Ltd's (TLV:LAPD) CEO Pay Packet
Key Insights
- Lapidoth Capital to hold its Annual General Meeting on 31st of December
- Total pay for CEO Amir Tirosh includes ₪1.52m salary
- Total compensation is 157% above industry average
- Over the past three years, Lapidoth Capital's EPS fell by 1.6% and over the past three years, the total shareholder return was 69%
Lapidoth Capital Ltd (TLV:LAPD) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 31st of December. 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. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.
Check out our latest analysis for Lapidoth Capital
Comparing Lapidoth Capital Ltd's CEO Compensation With The Industry
At the time of writing, our data shows that Lapidoth Capital Ltd has a market capitalization of ₪6.1b, and reported total annual CEO compensation of ₪1.8m for the year to December 2024. This was the same amount the CEO received in the prior year. We note that the salary portion, which stands at ₪1.52m constitutes the majority of total compensation received by the CEO.
On comparing similar companies from the Israel Energy Services industry with market caps ranging from ₪3.2b to ₪10b, we found that the median CEO total compensation was ₪687k. This suggests that Amir Tirosh is paid more than the median for the industry.
| Component | 2024 | 2024 | Proportion (2024) |
| Salary | ₪1.5m | ₪1.5m | 86% |
| Other | ₪241k | ₪241k | 14% |
| Total Compensation | ₪1.8m | ₪1.8m | 100% |
On an industry level, roughly 69% of total compensation represents salary and 31% is other remuneration. According to our research, Lapidoth Capital has allocated a higher percentage of pay to salary in comparison to the wider industry. 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 Lapidoth Capital Ltd's Growth Numbers
Lapidoth Capital Ltd has reduced its earnings per share by 1.6% a year over the last three years. It achieved revenue growth of 14% over the last year.
The lack of EPS growth is certainly uninspiring. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Lapidoth Capital Ltd Been A Good Investment?
We think that the total shareholder return of 69%, over three years, would leave most Lapidoth Capital Ltd shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. 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.
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 Lapidoth Capital that investors should think about before committing capital to this stock.
Important note: Lapidoth Capital 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.
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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.