Key Insights

• Allot's Annual General Meeting to take place on 13th of December
• CEO Erez Antebi's total compensation includes salary of US$286.2k
• The total compensation is similar to the average for the industry
• Over the past three years, Allot's EPS fell by 59% and over the past three years, the total loss to shareholders 87%

Shareholders will probably not be too impressed with the underwhelming results at Allot Ltd. (NASDAQ:ALLT) recently. At the upcoming AGM on 13th of December, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Allot

How Does Total Compensation For Erez Antebi Compare With Other Companies In The Industry?

According to our data, Allot Ltd. has a market capitalization of US$48m, and paid its CEO total annual compensation worth US$782k over the year to December 2022. We note that's a decrease of 10% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$286k.

On comparing similar-sized companies in the American Software industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$630k. So it looks like Allot compensates Erez Antebi in line with the median for the industry. Furthermore, Erez Antebi directly owns US$531k worth of shares in the company.

On an industry level, roughly 12% of total compensation represents salary and 88% is other remuneration. Allot pays out 37% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Allot Ltd.'s Growth

Over the last three years, Allot Ltd. has shrunk its earnings per share by 59% per year. Its revenue is down 22% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Allot Ltd. Been A Good Investment?

The return of -87% over three years would not have pleased Allot Ltd. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Allot you should be aware of, and 1 of them is concerning.

Important note: Allot 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.