News Column

Accountant General tells Leumi CEO to halve salary

June 19, 2014

Globes, Tel Aviv, Israel

June 19--Accountant General Michal Abadi-Boiangiu has advised Bank Leumi (TASE: LUMI) CEO Rakefet Russak-Aminoach to halve her salary, or the Ministry of Finance will do it for her through legislation. The issue came up in a conversation between the two women.

The Ministry of Finance wants to limit executive salary costs at banks and financial institutions at NIS 3.5 million a year. Above this figure, it will not recognize the compensation for tax purposes. This figure means that Russak-Aminoach will have to halve her salary.

The Ministry of Finance lacks the authority to reduce salaries of bank executives, which is the purview of the Bank of Israel. However, this could be done through legislation. The ministry also owns 6% of Bank Leumi through a government company headed by Abadi-Boiangiu.

In February, the state opposed the salary package of Bank Leumi executives, partly because of the bonus targets that were too and basic salaries, which were too high in Abadi-Boiangiu's opinion. The maximum basic salary in the compensation package is NIS 130,000 a month for a member of management and NIS 183,000 for that of Russak-Aminoach. The Ministry of Finance is also displeased that the bank wants to grant a bonus equal to a month's salary, and a signing bonus of 12 monthly salaries for new executives. The ministry also says that the severance compensation of 200-250% is excessive and unreasonable.


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Source: Globes (Tel Aviv)

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