Outgoing Tnuva chair gets NIS 3m parting bonus for 6 months' work
Shlomo Rodav succeeded Zehavit Cohen, who stepped down in mid-October 2011 after failing to dispel mounting public anger against the giant food corporation.
Shlomo Rodav, outgoing chairman of Tnuva Food Industries, received NIS 3 million in severance pay after less than six months on the job.
Rodav succeeded Zehavit Cohen, who stepped down in mid-October 2011 after failing to dispel mounting public anger against the giant food corporation. Tnuva was perceived as having jacked up the price of cottage cheese well beyond any increase in production cost, taking advantage of the relatively rigid demand for the household staple and setting off the snowball of consumer boycotts.
Rodav's mission was to find ways to improve Tnuva's profitability given the constraint that it couldn't raise prices for a year or two, after the blow its image took during the protests. That meant Rodav had to institute efficiency measures, winding down unprofitable operations (such as Tnuva Romania ) and tightening logistics.
But he and Tnuva's owner, the international fund Apax Partners, disagreed on Rodav's task. Rodav was prepared for Tnuva to absorb a short-term downturn for the sake of longer-term profitability. But Apax, because it seeks to exit its investment in Tnuva by selling or floating it, is keenly sensitive to the company's short-term prospects.
Nor did the labor union representing Tnuva workers see eye-to-eye with Rodav on cutbacks to logistics. Workers launched sanctions, first refusing to distribute cottage cheese, then chocolate milk as well and finally all Tnuva products, to supermarkets.
Workers suspended the sanctions for the Passover holiday week, during which time understandings were reached that led them to cancel their sanctions entirely.
Rodav and Apax apparently also failed to agree on how much Tnuva is worth. Apax received an assessment valuing Tnuva, Israel's largest food manufacturer, at NIS 8.6 billion. But the accounting firm Giza, Even Singer gave Israeli firm Mivtach Shamir, which owns a minority interest in Tnuva and might want to buy out Apax's majority interest, a low evaluation of NIS 5 billion that figured in an estimation of lost value due to the social protests.
Although the differences of opinion are understandable, in that Apax wants to sell high and Mivtach Shamir to buy low, Rodav reportedly thought Tnuva was worth less than Apax postulated.
In 2011 Tnuva's net profit shrank to NIS 50 million, down 90% from the year before. One reason was the NIS 211 million loss it racked up in Romania.
Both Rodav and Tnuva declined to comment on this article.