Yair Lapid .
(photo credit: Reuters)
Finance Minister Yair Lapid’s Sunday proposal to limit some executive pay received tepid endorsements Monday, while many economic leaders remained silent.
The proposal would cap the tax status for executives at financial institutions and bodies managing public funds at NIS 3.5 million.
Labor MK Shelly Yacimovich, a fierce Lapid critic who has submitted her own executive pay bill, said the step was welcome, but raised questions as to how effective it would be.
Yacimovich’s plan would link executive pay to worker pay within the company, ensuring that it could not exceed a certain multiple of the average employees salary.
Lapid’s proposal, she said would have little effect on executive payment outside the financial industry, meaning that extravagantly-paid CEOs like those of Israel Chemicals Ltd., Israel Corporation and HOT would remain untouched.
Finance Ministry director- general Yael Andorn defended Lapid’s proposal as superior to the former opposition leader’s in an Army Radio interview, saying “we’re not the ones who will decide the salary, that’s up to the boards, but we can set the limit for tax recognition.”
The Bank of Israel Supervisor of Banks said that the proposal was “an appropriate step in the right direction, and can lead to changing norms in the salary level and structure.”
The modest support from BoI was a welcome turnaround for Lapid, whose housing value-added tax exemption proposal was excoriated by the bank.
The Israel Securities Authority and Federation of International Chambers of Commerce, meanwhile, remained mum on the proposal, as did several economic analysts The Jerusalem Post contacted for comment, perhaps because they would be directly affected by its approval.