Bank Leumi cuts exec pay as new law bites

Bank Leumi is preparing for the Salary Cap Law. On Monday, it published its new pay plan, according to which the salaries of chairman David Brodet and CEO Rakefet Russak-Aminoach will fall to NIS 2.5 million each in 2017.

Russak-Aminoach’s monthly salary will be NIS 195,400 and will be linked to the rise in the lowest salary paid in the bank, in accordance with the maximum salary gap allowed by the new law. Brodet will receive a salary of NIS 168,200, also linked to the lowest pay. Neither the CEO nor the chairman will receive bonuses, and the full NIS 2.5m. compensation will be paid as fixed salary.

For 2016, when the law has not yet come into effect, Brodet is expected to receive a NIS 2.67m. salary. However, his might be higher because he is still eligible for a bonus for at least part of 2016. His compensation for 2017 will already be adjusted to the NIS 2.5m. restriction imposed by the law, with NIS 2.33m. of it in salary.

Russak-Aminoach’s salary for 2016 will be NIS 3.75m., not including as yet undetermined bonuses.

The Salary Cap Law limits the salary of the highest paid employees in financial companies to 35 times that of the lowest paid in the company. Moreover, a salary higher than NIS 2.5m. will not be recognized for tax purposes.

Bank Leumi’s pay plan also covers the compensation of bank officials and the bonus they will be entitled to. The bonus will comprise up to seven monthly salaries (excluding the chairman and CEO).