In view of the work sanctions applied by employees at the Tel Aviv Stock Exchange (TASE) today, the TASE management has decided that there will be no trading at all today. The TASE workers' committee told the employees this morning that "on the instructions of the Histadrut (General Federation of Labor in Israel), the work day will start at 11:00 am today, June 7, 2020" and asked them not to turn up to work before that time.
When the workers do arrive, they are due to hold a meeting that will take about an hour, so that trading on the TASE could not in any case start before about 13:00.
The Histadrut notified TASE CEO Ittai Ben-Zeev on June 2 that because the TASE management had decided to withdraw from arbitration on workers' bonuses for 2017, it would take action starting on June 7.
Israel Securities Authority chairperson Anat Guetta broke her silence on the dispute at the TASE today, and issued a statement saying, "I view the delay in the opening of trading on the Tel Aviv Stock Exchange because of an internal dispute with grave concern. At a time when we are investing large resources and a national effort to develop an innovative and attractive capital market, any disruption to orderly trading is liable to hurt investors and the market, which from my point of view is unacceptable. The stock exchange is a national infrastructure and shutting it down is not something to be taken lightly. I have instructed Securities Authority staff to examine the matter with all the relevant parties."
The TASE workers committee and TASE CEO Ittai Ben-Zeev have been at loggerheads for a long time. TASE employees are among the highest paid workers in Israel; their average salary cost is some NIS 50,000 monthly. They argue that "the 2017 collective agreement states explicitly that if the sides fail to reach agreement on the annual bonus, the employees will be entitled to declare a labor dispute and apply sanctions." They also point to a bonus of NIS 678,000 that Ben-Zeev "took" for 2019. TASE management sources point out that the bonus was decided on by the board of directors and approved by the general shareholders meeting, and was based upon the company's profits "Ben-Zeev didn't take anything; the bonus was given to him," the source said.
The longstanding dispute arises from the conversion of the TASE from a non-profit organization controlled by the local banks to a profit-making company controlled by foreign investment funds. The TASE was floated on the TASE itself, and since its IPO its market cap has risen substantially. It is now worth some NIS 1.55 billion, double the valuation at which it was floated last summer. The workers' sanctions come after the TASE's share price has risen 34% since the beginning of this year.
"If the CEO thinks that changing the structure of the stock exchange means accumulating profits, options, bonuses, and standing loans for himself and the senior management, at the expense of the seeds he scatters, in his great largesse, to the birds in the cage, he is mistaken. After long months of restraint, the Histadrut, in liaison with the workers committee, has decided on sanctions on the basis of the labor dispute concerning the 2017 bonus," the workers committee stated.
In announcing that there would be no trading on the TASE today, the TASE management stated, "The Israeli public ought to understand why the workers committee decided to disrupt trading and cause it to be halted. The committee is not satisfied with a bonus totaling NIS 15 million and wants it raised, and has gone to war over this. This is of course in addition to the fact that the average salary cost of a TASE employee is some NIS 50,000 monthly, and that the employees benefit from a holding worth some NIS 100 million representing 6% of the TASE's share capital.
"It should be recalled that at the time the committee declared a labor dispute over the management's decision to float shares in the TASE, and we would point out that since the flotation, the value of the shares held by the employees has risen from NIS 27 million to NIS 100 million. We would add that not a single TASE employee has been sent on unpaid leave or has been harmed as a consequence of the coronavirus pandemic. Is this a disturbing divorce from reality, or unbridled greed? The public will judge."
Published by Globes, Israel business news - en.globes.co.il - on June 7, 2020
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