We Think Some Shareholders May Hesitate To Increase Paz Oil Company Ltd.'s (TLV:PZOL) CEO Compensation

Key Insights

• Paz Oil will host its Annual General Meeting on 1st of October
• CEO Nir Sztern's total compensation includes salary of ₪2.93m
• The overall pay is 59% above the industry average
• Paz Oil's EPS grew by 41% over the past three years while total shareholder return over the past three years was 79%

CEO Nir Sztern has done a decent job of delivering relatively good performance at Paz Oil Company Ltd. (TLV:PZOL) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 1st of October. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Paz Oil

How Does Total Compensation For Nir Sztern Compare With Other Companies In The Industry?

According to our data, Paz Oil Company Ltd. has a market capitalization of ₪4.0b, and paid its CEO total annual compensation worth ₪5.3m over the year to December 2023. This means that the compensation hasn't changed much from last year. We note that the salary of ₪2.93m makes up a sizeable portion of the total compensation received by the CEO.

On comparing similar companies from the Israel Oil and Gas industry with market caps ranging from ₪1.5b to ₪6.0b, we found that the median CEO total compensation was ₪3.3m. Accordingly, our analysis reveals that Paz Oil Company Ltd. pays Nir Sztern north of the industry median. Furthermore, Nir Sztern directly owns ₪562k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	₪2.9m	₪2.7m	55%
Other	₪2.4m	₪2.5m	45%
Total Compensation	₪5.3m	₪5.2m	100%

On an industry level, roughly 46% of total compensation represents salary and 54% is other remuneration. It's interesting to note that Paz Oil pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Paz Oil Company Ltd.'s Growth

Paz Oil Company Ltd. has seen its earnings per share (EPS) increase by 41% a year over the past three years. In the last year, its revenue is down 9.2%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, 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 Paz Oil Company Ltd. Been A Good Investment?

We think that the total shareholder return of 79%, over three years, would leave most Paz Oil Company Ltd. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 2 warning signs for Paz Oil (1 is a bit unpleasant!) that you should be aware of before investing here.

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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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.