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Amir Philips became the CEO of Optibase Ltd. (NASDAQ:OBAS) in 2011, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Optibase.
How Does Total Compensation For Amir Philips Compare With Other Companies In The Industry?
According to our data, Optibase Ltd. has a market capitalization of US$63m, and paid its CEO total annual compensation worth US$363k over the year to December 2019. That's just a smallish increase of 5.2% on last year. In particular, the salary of US$254.0k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$284k. From this we gather that Amir Philips is paid around the median for CEOs in the industry.
On an industry level, roughly 32% of total compensation represents salary and 68% is other remuneration. It's interesting to note that Optibase pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Optibase Ltd.'s Growth
Over the past three years, Optibase Ltd. has seen its earnings per share (EPS) grow by 17% per year. In the last year, its revenue is down 2.2%.
Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Optibase Ltd. Been A Good Investment?
Boasting a total shareholder return of 84% over three years, Optibase Ltd. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
As we noted earlier, Optibase pays its CEO in line with similar-sized companies belonging to the same industry. Investors would surely be happy to see that returns have been great, and that EPS is up. Indeed, many might consider that Amir is compensated rather modestly, given the solid company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Optibase (of which 1 makes us a bit uncomfortable!) 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.
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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