Norstar Holdings Inc's (TLV:NSTR) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Norstar Holdings to hold its Annual General Meeting on 25th of September
• Salary of ₪4.03m is part of CEO Chaim Katzman's total remuneration
• The total compensation is 96% higher than the average for the industry
• Norstar Holdings' three-year loss to shareholders was 50% while its EPS was down 69% over the past three years

Norstar Holdings Inc (TLV:NSTR) has not performed well recently and CEO Chaim Katzman will probably need to up their game. At the upcoming AGM on 25th of September, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Norstar Holdings

How Does Total Compensation For Chaim Katzman Compare With Other Companies In The Industry?

At the time of writing, our data shows that Norstar Holdings Inc has a market capitalization of ₪670m, and reported total annual CEO compensation of ₪6.2m for the year to December 2023. That's just a smallish increase of 6.9% on last year. We note that the salary portion, which stands at ₪4.03m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Israel Real Estate industry with market capitalizations ranging from ₪378m to ₪1.5b, the reported median CEO total compensation was ₪3.2m. Hence, we can conclude that Chaim Katzman is remunerated higher than the industry median. Furthermore, Chaim Katzman directly owns ₪64m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	₪4.0m	₪3.6m	65%
Other	₪2.2m	₪2.2m	35%
Total Compensation	₪6.2m	₪5.8m	100%

Speaking on an industry level, nearly 53% of total compensation represents salary, while the remainder of 47% is other remuneration. According to our research, Norstar Holdings has allocated a higher percentage of pay to salary in comparison to the wider 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.

A Look at Norstar Holdings Inc's Growth Numbers

Over the last three years, Norstar Holdings Inc has shrunk its earnings per share by 69% per year. Its revenue is up 8.6% over the last year.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Norstar Holdings Inc Been A Good Investment?

Few Norstar Holdings Inc shareholders would feel satisfied with the return of -50% over three years. 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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Norstar Holdings (1 doesn't sit too well with us!) 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.