In 2016 Igal Zamir was appointed CEO of TAT Technologies Ltd. (NASDAQ:TATT). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Igal Zamir's Compensation Compare With Similar Sized Companies?
Our data indicates that TAT Technologies Ltd. is worth US$45m, and total annual CEO compensation is US$463k. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$322k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$498k.
So Igal Zamir is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at TAT Technologies has changed over time.
Is TAT Technologies Ltd. Growing?
TAT Technologies Ltd. has reduced its earnings per share by an average of 88% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down -11%.
Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has TAT Technologies Ltd. Been A Good Investment?
With a three year total loss of 37%, TAT Technologies Ltd. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
Remuneration for Igal Zamir is close enough to the median pay for a CEO of a similar sized company .
The company isn't growing EPS, and shareholder returns have been disappointing. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. Whatever your view on compensation, you might want to check if insiders are buying or selling TAT Technologies shares (free trial).
Important note: TAT Technologies may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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