FM Lapid at Eilat conference 370.
(photo credit: Yossi Zamir)
Finance Minister Yair Lapid on Sunday evening announced a proposal to rein in executive pay at financial institutions and bodies managing public funds.
According to the proposal, executive payments exceeding NIS 3.5 million a year would not be recognized for tax purposes, meaning the company could not receive any sort of benefits or write-offs for the extra pay.
Any payment above the recognized salary would also have to be approved by a majority of non-controlling shareholders.
“We must put an end to the executive pay party,” Lapid said.
According to the Finance Ministry, there has been a recent rise in payroll costs for higher- ups in financial institutions and bodies that manage public funds.
These institutions play a decisive role in shaping the Israeli economy, both by setting benchmarks for executive pay elsewhere and by imposing commissions and fees on average households, the ministry said.
In 2013, banks paid out a record NIS 30,700 per month to the average employee, an 8 percent increase over the previous year, according to a Globes
report last week.
The averages, however, were far higher than the median salaries; in other words, the pay at the top skewed the number upward, reflecting higher executive pay and lower salaries for the rest of the employees.
In the banking world, Bank Hapoalim led the pack, with CEO Zion Keinan earning NIS 9.85m. in 2013, while chairman Yair Seroussi earned NIS 9.5m.
Bank Leumi CEO Rakefet Russak-Aminoach followed with a NIS 6.3m. salary, while chairman David Brodet took home a cool NIS 5.2m.