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Will Zvi Ziv or won't he? As last week rolled to a close it seemed that the three top Bank Hapoalim (TASE: POLI) executives in the headlights would return NIS 40 million of the enormous pay they received in 2005. But on Thursday night, CEO Zvi Ziv said he knew nothing of any arrangement and when asked if he was considering returning money, said, "I am considering nothing."

To quiet the public outrage at the tremendous sums the bankers received, the Israel Securities Authority suggested that their 2005 bonuses be the same as in 2004.

Nehama received a NIS 20 million bonus in 2005, compared to NIS 6.5 million in 2004, and would therefore return NIS 13.5 million.

Dankner would have to return NIS 7.4 million of the NIS 12 million he received, leaving him with the same NIS 4.6 million bonus as he received in 2004.

Ziv received a NIS 20 million bonus in 2005 and future income of NIS 11.5 million from the appreciation of phantom stock options that he was awarded.

The previous year he received a NIS 6.5 million bonus and income of NIS 6 million from phantom stock options. As a result, Ziv is being asked to return between NIS 13.5 million and NIS 19 million.

The amount depends on whether the ISA includes the income from the phantom stock options in the amount that must be returned.

The bank decided to return Ziv's excess wages even though the ISA has yet to examine the approval process for his salary. Ziv is considered a salaried employee at the bank, and therefore, there is no concern that his salary should have been approved by a special majority of the bank's shareholders. That is unlike the case of Nehama, who was a partner of Hapoalim owner Shari Arison, or Dankner, whose family is part-owner of a controlling interest in the bank. But as said, Ziv denies that any arrangement has been made to take back money.

The bank is reportedly concerned for its image after the howls of outrage at the huge salaries paid to its top bananas.

The ISA is demanding that the remuneration be returned to the 2004 level, because it considers this to be reasonable and not excessive. This is an important determination due to rules laid down by the authority in remuneration discussions with Israel Discount Bank Chairman Shlomo Zohar. The rules state that when a bank chairman's salary is considered excessive, it requires approval of a special majority of the general assembly of shareholders.

Therefore, the ISA's position is that the wages paid to executives in 2004 was not excessive, and does not require special approval by the general assembly of the bank's shareholders.

In contrast, the wages paid in 2005 are excessive under ISA guidelines, and requires special approval. In other words, the authority has determined that if the senior executives' salaries return to their 2004 levels, it will not intervene in the matter, and if not, it will intervene.

The shareholders are still entitled to rule that the 2004 salaries are themselves excessive, and that a class-action suit may be filed, in which case the ISA must fund it.