Energean Cuts Management Fees to Alony Hetz by 6.4 Million Shekels After Institutional Pressure
Energean, a renewable energy company, has agreed to reduce the management fees paid to its controlling shareholder, Alony Hetz, by 6.4 million shekels over three years following pressure from institutional investors. The new management agreement, which will be presented for shareholder approval next week, lowers the total fees from the originally approved 45 million shekels to 38.6 million shekels. The initial agreement had been approved by Energean's board but faced opposition from some institutional investors, leading to a postponement of the shareholders' meeting.
Alony Hetz, which holds 49.4% of Energean's shares and is controlled by founder Natan Hetz, provides various management services including the roles of Natan Hetz as chairman of Energean, Aviram Wertheim as chairman of Alony Hetz, and CFO Oren Frenkel as directors. The company also offers headquarters, business development, financial management, and legal advisory services.
The previous management agreement, effective from July 2023 to June 2026, stipulated a fixed annual fee of 5.3 million shekels plus a variable component based on the capacity of projects connected to the electricity grid since July 2020, with a payment cap that adjusted for inflation. Since then, Energean has significantly expanded, doubling its connected project capacity from 867 MW to 1,868 MW and increasing electricity sales revenue by 44% to 178 million shekels in Q1 2026.
The original updated proposal sought to increase the fixed annual fee to 5.6 million shekels and raise the payment cap from 10.5 million shekels to 16 million shekels, a 52% increase. Under this plan, Alony Hetz would have received 13 million shekels in the first year and 16 million shekels annually thereafter. However, after institutional investor objections, the revised proposal raises the fixed fee to 6.2 million shekels but limits the variable fee to new projects connected from July 2026 onward, reducing the cap to 11 million shekels in the first year and 14 million shekels in the following two years. This adjustment results in an estimated 10.6 million shekels in fees for the first year and 14 million shekels annually thereafter, lowering the total by 6.4 million shekels over three years compared to the original plan.
The shareholders' meeting to approve this revised agreement is scheduled for next week.
