The expanded reports for 2017 recently published by Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) inaugurated the annual parade of leading salaries in Tel Aviv Stock Exchange (TASE)-listed companies. "Globes" has been keeping track of executive salaries in the local capital market, and rating and analyzing the data, for 24 years. If the opening report is any indication, then 2017, like its predecessors, was a very beneficial year for the bank accounts of senior executives in public companies.
The aggregate employment cost of the 10 leading wage earners in 2016 was NIS 170 million, an average of NIS 17 million each (NIS 1.4 million per month). The figures for 2017 have already outpaced this number, reaching NIS 180 million, an average of NIS 18 million each, with generous help from Teva's executives. During the most catastrophic year in memory for investors in Teva, perhaps the worst ever, with the company losing half of its market cap and reporting a precipitous decline in its business results, and amidst concern about Teva's ability to service its debt, CEO Kare Schultz and his fellow Teva executives have taken over the top places in the salary ratings.
The pay of Teva's 10 leading executives, past and present, amounted to the huge sum of NIS 180 million in 2017. This includes the company's current five top executives and five other executives no longer serving in their positions, including previous CEO Erez Vigodman. For a little over one month as CEO (he was ousted in February 2017), Vigodman received nearly NIS 10 million ($2.8 million) - NIS 260,000 ($74,000) a day.
Schultz tops the list
The top salary at Teva in 2017 went to incoming CEO Kare Schultz, with an unimaginable salary cost of $17 million (NIS 60 million), even if 95% of it consisted of capital remuneration: $14 million in shares and $2 million worth of options. Other remuneration paid to Schultz, who became CEO in November 2017, amounted to $800,000, $333,000 of which was salary. Other prominent executives on the salary list included former acting CEO Yitzhak Peterburg, with NIS 23.4 million for the year; Dr. Rob Koremans, who managed Teva's original drug business (NIS 17. 6 million); president and CEO global operations Dr. Carlo de Notaristefani (NIS 15.4 million); and former CFO Eyal Deshe and former chief science officer Michael Hayden (NIS 14.5 million each).
It is already clear now, at the beginning of the reporting season, that the executives from the faltering pharmaceutical giant will lead the salary ratings for 2017. High up on the list, but still short of Teva's record holders, are the managers and controlling shareholder in income-producing real estate company Melisron Ltd. (TASE: MLSR) and apparel company Delta Galil Industries Ltd. (Pink Sheet: DELTY; TASE: DELT), two companies that recently published good results.
The top salary at Melisron last year went to CEO Avi Levy with a salary cost of NIS 6.6 million, while controlling shareholder Leora Ofer, who holds a 75% job as chairperson, settled for NIS 3.3 million in pay. The company's executives were paid an aggregate NIS 18 million.
Delta Galil CEO and controlling shareholder Isaac Dabah received NIS 5.1 million, and the cost of the company's five highest salaries totaled NIS 17 million. Only two of the highest paid executives so far are women: Leora Ofer and current Teva EVP global R&D Dr. Hafrun Fridriksdotti, whose employment cost Teva NIS 13 million ($3.7 million), including NIS 2.4 million ($700,000 in salary and the rest in capital remuneration, bonus, and other items.
Published by Globes [online], Israel Business News - www.globes-online.com - on February 26, 2018
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