The Ticker: Israel Chemicals Revises Its Sheshinski Tax Bill Downward

Study finds no link between corporate pay, performance; MannKind CEO quits in surprise move; Shares gain despite new terror attacks;

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Israel Chemicals revises its Sheshinski tax bill downward

Israel Chemicals said yesterday it expects the impact of a new law taxing windfall profits on natural resources would be less than previously expected because of lower prices for its key product, potash. Based on average potash prices this year, ICL said its new tax bill would be less than the $90 million to $100 million it had estimated on November 12, which had been based on average 2013 prices. It did not give a new estimate. Last week the new tax regime, based on the recommendations of the Sheshinski II committee, was approved by the Knesset. It imposes a 25% tax rate on natural resource companies that achieve an annual return on investment of 14% and a 42% rate on returns above 20%. The government had hoped to generate as much as 500 million shekels ($129 million) in extra revenues from the tax, which ICL bitterly opposed. Shares of ICL, which is controlled by Idan Ofer’s Israel Corporation, ended down 1.4%, at 19.49 shekels. (TheMarker Staff)

Study finds no link between corporate pay, performance

A study by the Israel Securities Authority released yesterday found little connection between how profitable publicly traded companies are and how much they pay their top executives. The average compensation for senior executives was 1.7 million shekels ($892,000) annually, but 11% earned more than twice that. The average share price for the companies surveyed rose 29% and pay rose 12%, but the ISA study found no correlation between pay at individual companies and their share price performance. “It disturbs me the fact that there is no strong link between the corporate performance and pay, and that pay was influenced by what others in the same industry were getting instead of how the company itself was doing,” said Prof. Shmuel Hauser, the ISA’s chairman. In publicly traded companies that have controlling shareholders, some 89% paid him or her a salary on average 25% higher than their salaried executives. Gitit Gur-Gershgoren, who did the study, said it was premature to judge whether ISA pay reforms would have an impact. (Shelly Appelberg)

MannKind CEO quits in surprise move

MannKind Corporation, the U.S. biotech company traded on the Tel Aviv Stock Exchange, said on Friday that its CEO, Hakan Edstrom, had stepped down after less than a year in the position. The surprise statement by the troubled company didn’t offer any explanation for the move, but the news was greenly warmed by the stock market where MannKind shares rose 11.2%, the biggest gain of any stock on the TA-100 index yesterday, to close at 9.64 shekels ($2.68). MannKind has a single drug — the inhaled insulin Afrezza, which it began selling in February under a partnership with French drug company Sanofi — but sales have been disappointing, partly because the U.S. Food and Drug Administration requires users to pass lung-function tests before the drug can be prescribed. The company said its board had appointed MannKind founder Alfred Mann as interim CEO and authorized an “immediate search” for a permanent replacement. (Shelly Appelberg)

Shares gain despite new terror attacks

Tel Aviv shares rose yesterday despite another round of terror attacks, although they ended off their highs. The benchmark TA-25 index ended down 0.2% at 1,576.14 points, while the TA-100 index eked out a gain of less than 0.1% to end at 1,361.59. Turnover was about 608 million shekels ($156.3 million). Leading the gainers were energy stocks and Frutarom, the latter adding 3.4% to end at 181 shekels in heavy trading. IDB Development Corporation sunk 9.2% to 2.19 and its Discount Investment Corporation unit fell 1.6% to 7.34 shekels. Cresud Argentina, which is controlled by Eduardo Elsztain, also the IDB group’s controlling shareholder, has come under pressure from short-seller Spruce Point Capital Management, Bloomberg News reported. Azrieli Group ended down 1.8% to 150 shekels. Africa Properties ended up 4.5% at 56.25 shekels after Psagot analyst Noam Pinko gave it a Buy recommendation and target price of 75 shekels. (Shelly Appelberg)