In 2016 Yona Ovadia was appointed CEO of Gilat Satellite Networks Ltd. (NASDAQ:GILT). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Yona Ovadia's Compensation Compare With Similar Sized Companies?
Our data indicates that Gilat Satellite Networks Ltd. is worth US$486m, and total annual CEO compensation is US$920k. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$366k. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.8m.
Most shareholders would consider it a positive that Yona Ovadia takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at Gilat Satellite Networks, below.
Is Gilat Satellite Networks Ltd. Growing?
Over the last three years Gilat Satellite Networks Ltd. has grown its earnings per share (EPS) by an average of 118% per year (using a line of best fit). In the last year, its revenue is down -11%.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. 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 Gilat Satellite Networks Ltd. Been A Good Investment?
Most shareholders would probably be pleased with Gilat Satellite Networks Ltd. for providing a total return of 101% over three years. 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.
It appears that Gilat Satellite Networks Ltd. remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Yona Ovadia deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. But it is even better if company insiders are also buying shares with their own money. So you may want to check if insiders are buying Gilat Satellite Networks shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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.