Shareholders May Be Wary Of Increasing Nissan Medical Industries Ltd's (TLV:NISA) CEO Compensation Package

Key Insights

• Nissan Medical Industries' Annual General Meeting to take place on 24th of December
• CEO Hezi Nissan's total compensation includes salary of ₪569.0k
• The overall pay is 114% above the industry average
• Nissan Medical Industries' three-year loss to shareholders was 27% while its EPS was down 27% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at Nissan Medical Industries Ltd (TLV:NISA) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 24th of December. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Nissan Medical Industries

How Does Total Compensation For Hezi Nissan Compare With Other Companies In The Industry?

Our data indicates that Nissan Medical Industries Ltd has a market capitalization of ₪130m, and total annual CEO compensation was reported as ₪2.5m for the year to December 2023. Notably, that's an increase of 25% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at ₪569k.

For comparison, other companies in the Israel Medical Equipment industry with market capitalizations below ₪719m, reported a median total CEO compensation of ₪1.2m. This suggests that Hezi Nissan is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	₪569k	₪579k	23%
Other	₪1.9m	₪1.4m	77%
Total Compensation	₪2.5m	₪2.0m	100%

On an industry level, around 88% of total compensation represents salary and 12% is other remuneration. Nissan Medical Industries pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Nissan Medical Industries Ltd's Growth Numbers

Over the last three years, Nissan Medical Industries Ltd has shrunk its earnings per share by 27% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

The decline in EPS is a bit concerning. And the flat revenue is seriously uninspiring. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Nissan Medical Industries Ltd Been A Good Investment?

With a three year total loss of 27% for the shareholders, Nissan Medical Industries Ltd would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 5 warning signs (and 1 which doesn't sit too well with us) in Nissan Medical Industries we think you should know about.

Important note: Nissan Medical Industries 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.