El Al Israel Airlines Ltd. (TASE: ELAL) CEO Haim Romano will step down after four and a half years at the head of Israel's national airline. El Al's board of directors convened a special meeting this morning and then announced that Romano was resigning with the full agreement of the board.
However, the fact that the airline reported that Romano will receive an additional 18 months salary suggests that he was fired rather than voluntarily resigning. The terms of his contract state that he is entitled to six months severance pay if he resigns but 18 months pay if he is fired.
Sources inform "Globes" that Romano had been negotiating to extend his contract beyond May 2010 but that both sides were unable to reach agreement. Sources close to Romano insist that while the terms of his departure indicate he was fired, his compensation package had been reached by agreement from both sides. Those sources insisted that in certain circumstances it is acceptable to offer an outgoing CEO an improved resignation package. Together with his retirement package, Romano would have earned over NIS 40 million in four and a half years with the airline.
During his tenure at El Al, Romano, 55, implemented the "El Al 2010" strategic plan. The plan's goal is to boost sales and improve profit margins by lowering the age of the airline's fleet. The plan also includes upgrading business class to increase the airline's market share among business and other premium passengers, as well as greatly increasing direct ticket sales via the airline's website and call center.
Since Ilan Ben-Dov acquired control of Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) last month, there have been reports that Romano, a former VP at the company, as well as El Al chairman Amikam Cohen, who was formerly CEO of Partner, would leave the airline in favor of the cellular operator. Romano's pending departure from El Al may be the first step in his and Cohen's return to Partner.
Last month, the Ministry of Transport awarded El Al a permit to operate on the domestic Ben Gurion Airport-Eilat route.
El Al workers committee chairman Yossi Levy told "Globes" this morning that relations between the workers committee and the CEO put a strain on work at the airline. "As representatives of the workers, it's hard for us to conduct ourselves in such a large and complex system when there are constant threats made against employees."
El Al's share fell 2% today and has lost 80% of its value during Romano's tenure as CEO.
Published by Globes [online], Israel business news - www.globes-online.com - on September 6, 2009
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