On entering Bank Hapoalim, the new controlling shareholders met with Shlomo Nehama and Emanuel Sharon, and spoke of the future. Earlier, the day after the Arison-Dankner group was declared the successful bidder for the controlling stake in the bank, Ted Arison heard from Gad Somekh, CPA. Although he had promised to chair the bank, Somekh said, Arison would be unable to do so, due to his other interests. After discussing the matter, Sharon and Nehama agreed that Sharon would stay on as chairman for a few months more, to enable the smooth hand-over of management.
Sharon stayed, earned a bonus not long ago, and at the same time, started to develop a start-up company together with his son. Six weeks ago, evidently on Sharon’s initiative, it was decided that he would resign. The controlling shareholders decided to appoint Nehama chairman of the bank. A natural appointment, seeing that he has served as deputy chair until now.
Thus, slowly but surely, in quiet, businesslike manner, Israel’s biggest bank is passing to the management of the new owners. Arison advances by small, modest steps, a style to which Nehama is evidently well suited.
It will be another one and a half or two years before Bank Hapoalim’s management wears an entirely new face. This decision too, was taken some time ago, along with the decision to sign on Amiram Sivan as the bank’s general manager for three years (with exit stations along the way). Within that period, four senior bank officers are due to retire. They are Joint Managing Director Josef Dauber, commercial banking; Joint Managing Director Moshe Amit, business banking; Joint Managing Director Shimon Ravid, financial and international system; and deputy general manager Alexander Yochtman, customer asset management division.
Pending natural retirement, all four will remain senior management members, and will be according the new owners’ full esteem, with the owners and their attorneys, of course, being largely involved in decision making. Nehama and Sivan meet at least four times a week.
Bank Hapoalim, at the same time, is deploying for Year 2000. This means, to begin with, getting massively into international banking. The bank is operating under an increasingly urgent sense of competition, due to the development of private banking and the advent of foreign banking rivals, currently making their presence felt where Israel's major companies are concerned.
No definite decision has yet been reached as to how to go into international banking: whether through the banking systems of the US partners, the Hyperion group represented at the bank by Director Scott Shay, or independently. What has already been decided is that Sivan will play a key role in this outward directed thrust, and will shortly start investing more and more of his time in the bank’s international activity.
In Israel, the bank is shortly due to sell its share in either Koor or Clal, under the Banking Law amendment. The controlling shareholders have not yet sought a postponement of the sale, but intend to do so right away. Other transactions expected this year are mainly the sale of the bank’s non-financial assets, in such a way as to settle the ration of shareholders; equity to non financial assets, enabling a generous dividend to be paid to the group, which, toward the end of the year will exercise its option to acquire another large parcel of the bank’s shares.
The date of Nehama’s appointment to the chairmanship also matches the building of mutual trust between him and Ted Arison’s daughter Sheri Arison-Dorsman. When Arison first became active in Israel, relations between the two were strained and competitive. Arison-Dorsman, who came to Israel while her brother Michael remained in the United States, from where he manages his Carnival Cruise company, believed herself capable of shouldering the business yoke. Papa Arison thought she should devote herself to domestic matters instead.
Sheri rebelled, started out with small businesses, took over the management of Arison’s $200 million contributions fund, ($10 million in contributions annually), and proved her capabilities. Meanwhile, the rivalry over management in Israel simmered down.
Eventually, when she was appointed director, on acquisition of the bank, Arison-Dorsman was interviewed by "Yediot Ahronot". "How does your father view your veering in the direction of business ?", she was asked. "I had to prove myself", she said. He regarded me only as a mother, who has to raise her children. Today he sees that I am capable of being both a good businesswoman and a good mother, and the two things need not be mutually exclusive".
As regards Shlomo Nehama, Arison said, in that interview: "I was very hurt, at first, when they said I was succeeding because I was ‘the daughter of’. I took the trouble to explain. Today, it does not concern me. I know exactly what I have done. It is important to me to be also a businesswoman… I am also involved in my father’s business. I am on the boards of Carnival Cruise and Arison Investments. General manager Shlomo Nehama reports to me every week on developments. People don’t know me and think I only have to do with philanthropic affairs, but it is important to me that they know that I am also extensively involved in my father’s businesses and my own".
Ted Arison arranged the balance of forces between his daughter and his manager two years ago. The memorandum and articles of Arison Investments, the company that holds Arison’s assets in Israel, reported at the time to the Registrar of Companies, included the details of the future division of powers in his businesses between those two individuals, for the ten years subsequent to his lifetime. Over and above Arison-Dorsman’s title as her father’s heir, she will also gain preponderant influence in the control. Nehama will gain similar standing, through controlling shares.
Published by Israel's Business Arena June 3, 1998