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In 2011 Doron Turgeman was appointed CEO of Internet Gold - Golden Lines Ltd. (NASDAQ:IGLD). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Doron Turgeman's Compensation Compare With Similar Sized Companies?
Our data indicates that Internet Gold - Golden Lines Ltd. is worth US$16m, and total annual CEO compensation is ₪196k. (This number is for the twelve months until December 2017). We think total compensation is more important but we note that the CEO salary is lower, at ₪152k. We looked at a group of companies with market capitalizations under ₪717m, and the median CEO total compensation was ₪1.5m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Internet Gold - Golden Lines has changed from year to year.
Is Internet Gold - Golden Lines Ltd. Growing?
Over the last three years Internet Gold - Golden Lines Ltd. has shrunk its earnings per share by an average of 86% per year (measured with a line of best fit). It saw its revenue drop -4.8% over the last year.
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 Internet Gold - Golden Lines Ltd. Been A Good Investment?
Given the total loss of 96% over three years, many shareholders in Internet Gold - Golden Lines Ltd. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
Internet Gold - Golden Lines Ltd. is currently paying its CEO below what is normal for companies of its size.
The compensation paid to Doron Turgeman is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. Shareholders may want to check for free if Internet Gold - Golden Lines insiders are buying or selling shares.
Important note: Internet Gold - Golden Lines 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.