Barak Eilam, CEO of customer relations management and compliance solutions company Nice (TASE: NICE; Nasdaq: NICE), is stepping down from his post. Elam is CEO of the second largest company on the Tel Aviv Stock Exchange in terms of market cap. He has served in the post for ten years, out of 25 years with the company altogether, and is among the highest paid executives among Tel Aviv Stock Exchange companies. Nice’s share price is down by more than 6% in Tel Aviv and by more than 11% in New York.
Eilam is due to leave his post at the end of 2024. The company says that he will play an active part in finding his successor and will cooperate in a handover process, adding, "Eilam will continue to act in a strategic consulting capacity during the first half of 2025." According to its announcement of Eilam’s retirement from the company, Nice says that the search for his replacement "will consider both internal and external candidates to ensure the best fit for Nice." During Eilam’s period as CEO, Nice’s share price rose by 450%, bringing the company to a current market cap of NIS 53 billion. The company employs about 8,500 people.
Throughout his period at the head of Nice, Eilam improved the company, and of course benefitted from that. His compensation was mainly stock-based. In 2023, his compensation cost totaled NIS 90 million, comprising a salary of $1 million, a bonus of $1.1 million, cost of stock-based compensation allocated in 2023 of $7 million, and $15.6 million for stock-based compensation allocated to him in previous years. Altogether (excluding 2024) the cost of employing Eilam as CEO was NIS 460 million ($125.6 million).
Mixed guidance
The announcement of Eilam’s departure came at the same time as Nice released its first quarter financials. The quarterly results are good, but the guidance for the rest of the year is mixed. Nice posted non-GAAP earnings per share of $2.58 on revenue of $659.3 million. The consensus analysts’ estimate was earnings per share of $2.45 on revenue of $655.4 million. This represents growth of 27% in earnings per share and 13% in revenue in comparison with the first quartier of 2023. Revenue from the cloud segment grew 27%, to $468.4 million.
For the second quarter, Nice projects revenue of $657-667 million and non-GAAP earnings per share of $2.53-2.63. The mid range of the guidance, $662 million revenue and $2.58 earnings per share, is below the analysts’ estimate of $667.2 million revenue, but above the earnings per share estimate of $2.52.
For 2024 as a whole, Nice projects revenue of $1.7`5-2.735 billion, and earnings per share of $10.53-10.73. The mid range of $2.725 billion revenue and $10.63 earnings per share is below the analysts’ $2.73 billion revenue estimate, but above their $10.51 earnings per share estimate. Nice did not explain the expected weakness in revenue.
Outspoken
Unlike other technology company leaders, Eilam was not reticent in expressing his views on issues of the day. In 2018, for example, he wrote on his LinkedIn account that Nice employees would not fly on El Al following an incident in which women passengers were asked to change places on a flight to meet the demands of haredi passengers. "At NICE we don't do business with companies that discriminate against race, gender or religion. NICE will not fly @EL AL Israel Airlines until they change their practice and actions discriminating women," his post read.
Last year, as the government tried to advance its judicial overhaul program Eilam was one of the first to warn of the possible damage to local industry. "The upcoming legislation to dismantle the judicial system in Israel will have severe and irreversible implications on the country‘s position as a business hub. Tech company CEOs and boards have a fiduciary duty to protect intellectual property and key core assets, and will only be entrusting those in countries with strong and independent judiciary," he wrote.
Eilam led a process of transformation at Nice, a process that included substantial acquisitions, and switched the focus of its activity to the cloud. The most recent acquisition was in late 2023, when Nice announced that it was buying US company LiveVox, a developer of AI-based products for proactive communications with customers, for $350 million. The largest acquisition was of inContact in 2016, for $940 million.
Published by Globes, Israel business news - en.globes.co.il - on May 16, 2024.
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