Sunday's proposal by Minister of Finance Yair Lapid to cap the expenses recognized for tax purposes relating to executive salaries at financial institutions and bodies that manage the public's money, has rippled through the market. An examination by "Globes" found that, in 2013, only 46 executives in these companies exceeded the proposed NIS 3.5 million cap.
At least 19 bankers exceed the proposed salary cost cap, and the actual number may be higher, because the banks only disclose the five highest paid executives. All of Bank Hapoalim's (TASE: POLI) five highest paid executives made more than NIS 3.5 million, headed by more than NIS 9 million earned by chairman Yair Seroussi and CEO Zion Keinan.
Four of Bank Leumi's (TASE: LUMI) five highest paid executives exceed the proposed cap, led by CEO Rakefet Russak-Aminoach with a salary cost of over NIS 6 million. Three of Israel Discount Bank's (TASE: DSCT) five highest paid executives exceed the cap, and at the other banks, only the chairman and CEO exceeded the cap. No executive at Bank of Jerusalem (TASE: JBNK), Israel's seventh largest bank, exceeds the cap.
At the credit card companies, only Dov Kotler, the CEO of Isracard Ltd., owned by Bank Hapoalim, exceeds the proposed cap, with a salary cost of NIS 4.4 million in 2013.
Lapid's proposed executive salary cost cap is relevant for eight of Israel's twelve insurance companies and at least 22 executives, who made an aggregate salary cap of NIS 71 million in 2013. Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) CEO Izzy Cohen tops the list, with a salary cost of NIS 18.1 million (including stock options); followed by IDI Israel Direct Insurance Ltd. (TASE: IDI) CEO Raviv Zoller, with a salary cost of NIS 11.9 million; The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) CEO Eyal Lapidot, with a salary cost of NIS 10.5 million; Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) co-CEOs Shimon Elkabetz and Michel Siboni, with a salary cost of NIS 9.4 million and NIS 9.2 million.
At the publicly-traded investment houses, five of the 25 executives exceed Lapid's proposed executive salary cost cap. The co-CEOs of Yelin Lapidot Investment House Ltd., Dov Yelin and Yair Lapidot, each had a salary cost NIS 6.6 million in 2013. They were followed by IBI Investment House Ltd. (TASE:IBI) VP trade Ofer Lev, with a salary cost of NIS 5.7 million; Leader Capital Markets Ltd. (TASE:LDRC) CEO Amit Vardi, with a salary cost of NIS 5.5 million; and Excellence Investments Ltd. (TASE: EXCE) CEO Uzi Danino, with a salary cost of NIS 3.6 million. (Leader Capital Markets owns 50% of Yelin Lapidot, and its co-CEOs own the other half.)
In addition, the CEOs of two investment houses owned by insurance companies also exceed the proposed cap: Migdal Capital Markets CEO Yaakov Weinstein, with a salary cost of NIS 4.7 million, and Ayalon Holding Ltd. (TASE: AYAL) subsidiary Ayalon Investment House CEO Noam Braverman, with a salary cost of NIS 3.4 million.
However, these figures do not reflect the true situation at investment houses, because private companies - beginning with Israel's largest investment house, Psagot Investment House Ltd. - do not disclose their executive salaries. "Globes" revealed that Psagot CEO Hagai Badash's salary cost was NIS 5 million.
Published by Globes [online], Israel business news - www.globes-online.com - on April 7, 2014
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