Treasury caps executive pay at nonprofits
New directive limits salaries of CEOs and VPs at public institutions.
The Finance Ministry’s new criteria for allocating funding to public institutions limit the salaries their CEOs and VPs may receive.
This affects nonprofit organizations such as think tanks, social service groups, charities and religious institutions.
The new directive, which Finance Minister Yuval Steinitz signed Wednesday, states that these officials cannot receive more than people in such positions at nonprofit government companies.
The goal is to prevent abuses of public money. Executive salaries at publicly supported institutions are not always subject to oversight, and they may come at the expense of the institution’s operations.
These executives will now bear personal responsibility for their salaries, and could be forced to return any money that exceeds the cap.
“These regulations will allow the government to rein in the salaries of senior executives when that money is coming out of the public’s pocket. The regulations will prevent fraud when it comes to the number of students studying at a yeshiva or the number of people receiving services from various nonprofits,” said Steinitz.
The regulation also seeks to block government-supported institutions from passing money to corporations they own or control. From now on, these institutions may do so only via owners’ loans that meet certain terms.
Another aim is keeping groups with lots of cash from dipping further into public coffers. Now, institutions with cash reserves equaling at least 100% of their annual revenues cannot receive additional state assistance.