The wage and options agreement worked out with Eli Yones, the new CEO of Mizrahi Bank, is enviable.

A monthly salary of NIS 129,000, fringe benefits, grants totaling hundreds of thousands of shekels (depending on the bank's yield on capital) and options worth millions for the purchase of a 2.5-percent stake in the bank. Is our envy justified? Is all this too much?

From the day Yones left his job as the Finance Ministry's accountant-general in 1992, he has worked for private companies. His first job was as CEO of the General Bank, then as CEO of Bank Hapoalim, and now Mizrahi. When you work in the private sector, the owners always feel they are paying too much. If they could have, Mizrahi would have hired Yones for half of what he was asking. The problem is that he did not agree.

The story began three years ago when Mizrahi CEO Victor Medina got fed up with the way he was being treated by the Wertheim family (which owns the bank jointly with the Ofer family). Medina wanted to leave. When Yones resigned from managing Hapoalim a year ago, Medina tried to take advantage of the opportunity and convince Yones to replace him. Yones refused. He dreamed of being self-employed; working without a boss.

But Medina would not give up and decided to try again last month. At that time Yones was on the verge of operating his investment fund, but still, Medina was not greeted with an absolute no. That was enough for Medina and Mizrahi.

The bank's owners knew that if they wanted a talented manager with wide-ranging banking experience, and a smooth management transition, they would have to open their wallets.

There are no such high wages in the public sector. There senior officials earn NIS 40,000-NIS 60,000 per month, but get a pension as soon as they retire, even if many years still remain until they reach retirement age. This means that if the pension terms are added to the salary, the effective wage is NIS 60,000-NIS 90,000 per month. This does not refer to one top official, or to a limited group of executives, but to a many-branched upper echelon. At the Bank of Israel, for example, there are 115 people (one-seventh of the bank's payroll) who receive an average of NIS 41,000 a month - not including pensions.

If we add to this the fact that in the public sector it is impossible to fire anyone, even if he completely failed at his job - it is unclear who gains more. After all, for Yones to realize his millions, he will have to bring the bank owners a high yield on their capital and create faith among investors so that the bank's share price will soar. That is not an easy thing to achieve. And if one fine day the bank's owners decide they don't like him, or he angers them with his independence (as happened at Hapoalim), Yones could find a letter of dismissal on his desk. This cannot happen in the public sector.

If we add to this all the other tricks prevalent in the public sector, such as double salaries - getting paid both wages and a pension - it is hard to say who receives more than he deserves. The double salaries trick was invented by the Knesset members - it is nothing less than corruption that the same person receives a pension as a former cabinet minister and a salary as an MK. Is it not the same political work?

Even the private sector, however, is not immune to criticism. The controlling shareholders in publicly traded companies have to add one more element to their considerations: social strength. They should understand that they must not be excessive; that such huge wage gaps cause social unrest. In a society in which so few earn such high salaries while hundreds of thousands are unemployed or earn minimum wage, the fabric of society cannot hold together for long. Its unraveling can be expressed by strikes, demonstrations, the lack of desire to serve in the army, in crime, in violence - and in the torching of bank branches.

Thus, when bank owners consider the salaries of their top officials, they should add the social effect into the equation. Without a healthy and stable society, even the most talented CEO will not achieve stable yields in the long run.