Analysis / Let the papers do the talking
A gala evening will be held tonight at the Tel Aviv Hilton honoring outgoing United Mizrahi Bank CEO and President Victor Medina for nine years of service.
A gala evening will be held tonight at the Tel Aviv Hilton honoring outgoing United Mizrahi Bank CEO and President Victor Medina for nine years of service. Medina was replaced last month by former Bank Hapoalim CEO Eli Yones. It is a safe bet that the average salary of participants at the event - excluding waiters - will be NIS 100,000 per month, with some sitting pretty in the NIS 300-400,000 bracket.
Mozi Wertheim is happy enough to be bidding adieu to Medina, with whom he has quarreled in past years, and to welcome Yones aboard. He and his partners Sami and Yuli Ofer pay both a pretty penny. Medina earned NIS 400,000 a month in 2003, and Yones will make that much if he can maintain success.
Wertheim entirely dislikes having to pay his CEOs so much. He truly believes that paying anywhere near NIS 400,000 is entirely superfluous. As one managing several other businesses, including Coca-Cola Israel, Wertheim is convinced that banker salaries are unjustifiably out of proportion. He has said as much and admits to contributing to the problem.
He does not see the problem as greed so much as an inter-CEO competition. What counts is not the salary but how one compares to one's peers. However, Wertheim also knows the rules of the game and understands that colluding with other bank owners to reduce salaries violates anti-trust laws.
It is reasonable to posit that his festive farewell speech will not include an impassioned call for the bankers to reduce their salaries. Therefore, Wertheim has put the ball in the major CEOs' court by floating the idea in the press.
His appeal to Yones and friends publicly signals that even their paymasters no longer find their salaries justified.
Wertheim accepts blame for contributing to these unseemly salaries. In his defense, at least he is in touch with feelings stemming from the lower classes, which still suffer from high unemployment rates, growing poverty, and huge social gaps. Not that any of these topics will be the talk of the evening, but it is good to see them on the agenda even in times of rising bank profits and cocktail parties at the Hilton.