Happy Birthday, Motti Zisser

Moti Zisser had quite a 50th birthday celebration. The deeply pious real estate investments mogul flew 250 of his closest friends to the Astrid Plaza Hotel in Antwerpen (which is owned by his company Elbit Medical Imaging (Nasdaq: EMITF). During an opulent three-day stay they were treated not only to full service but to concerts by Shlomo Artzi and Yigal Shilon. Then the guests were flown home and Zisser could free himself to arranging his livelihood for the next 50 years.

At the end of last week, Elbit Medical summoned its shareholders to a meeting to discuss pay, stock options and other privileges for Zisser and company directors, some of whom are new.

So far this year, Elbit Medical has been a superstar on the Tel Aviv Stock Exchange, presenting its shareholders with a 45% leap in share price. It will be interesting to see if the institutional investors accept Zisser's high evaluation of the value of his services. Zisser is not asking for the kind of pay that Bank Hapoalim (TASE: POLI) has been lavishing on its alphas, but he's not stinting himself, either.

His base pay is proposed to be $50,000 a month, for five years. That works out to $3 million a year for an 80% position. Elbit Medical will also pay for various expenses including company cars. To avoid any embarrassment about piddling little payments, the company will finance a computer (with a modem?) for his home, a fax, a printed, and a cellphone.

Also, each year Zisser will be entirled to 3% of Elbit Medical's pretax profit on any sum between NIS 100 million to NIS 125 million. Then his take climbs to 3.5% of pretax profit on any sum between NIS 125 million to NIS 150,million, and to 4% of pretax profit above NIS 150 million. If Elbit Medical makes NIS 250 million pretax, Zisser would get NIS 6 million.

He also gets 350,000 stock options convertible into 1.3% of Elbit Medical's share capital. Then there is the request that Elbit Medical finance 125 flying hours a year.

Moving on, the shareholders are also going to be asked to approve an agreement between Zisser's privately held properties company with Elbit Medical.

Yet none of that is the cherry on the cake. Said fruit is actually related to the imminent flotation of Insightec. Zisser is in line for 125,000 stock options convertible into 1.35% of Insightec's share capital, at full dilution. The exercise price into shares is $5.50. If Insightec really is floated at a company value of $400 million, that alone is worth $4 million. The IPO would also make Elbit Medical handsome capital gains in the realm of tens of millions of dollars, which would beef up its profits and therefore Zisser's bonuses.

For three years Zisser has been angling for stock options in Insightec but the institutional investors have consistently sent him packing. "When the offering approaches, we can talk," he was told. Well, it's approaching.

Nor is Zisser neglecting to bring before the shareholders proposals for the bonuses of Elbit Medical president Shimon Yitzhaki and Elscint president Rachel Lavine. Each is to get $100,000 for 2004 and $175,000 for 2005. He also wants the two to get 0.75% to 1% of the respective company's pretax profits (each).

Yitzhaki and Lavine and are also Elbit Medical directors and as such are due for 90,000 and 75,000 stock options respectively.