Ministers frown on limiting exec pay
The ministerial committee appointed to determine the government's position on capping executive salaries at publicly traded companies isn't in favor. The panel will propose that legislation to that effect be rejected, people close to the committee said after a meeting yesterday afternoon.
The committee, headed by Justice Minister Yaakov Neeman, was appointed to discuss a bill proposed by MKs Shelly Yachimovich of Labor and Haim Katz of Likud, that would link top salaries at publicly traded companies a company to the lowest pay in the firm.
The bill had garnered widespread support in the broad Knesset plenum.
Instead of proposing a salary cap, the committee will instead propose measures to strengthen corporate governance - meaning, increasing the supervisory capacity of boards of directors and shareholders at large.
These recommendations are likely to be similar to those made by Israel Securities Authority chairman Zohar Goshen.
Aside from increasing the number of external board members and mandating that a general meeting of shareholders approve the salaries of a company's five highest-paid employees, the committee is expected to recommend basing executive salaries and bonuses on the company's profitability over the last several years.
During the meeting, Neeman said the National Economic Council at the Prime Minister's Office would work with the ISA to formulate a document addressing executive salaries at publicly-held companies and how to increase oversight on the matter. He also requested that the Justice Ministry present its stance on the committee's findings by mid-August.