No Bezeq options for Yes CEO
Ron Eilon, the chief executive of the Yes satellite TV company, can't have any stock options for Bezeq shares, if Israel's trustbuster has anything to do with it.
Antitrust Commissioner Ronit Kan yesterday warned Bezeq against awarding Bezeq stock options to the alpha executive at its satellite television subsidiary, Yes. One problem, the trustbuster postulated, is that granting stock options to Eilon could induce him to favor his parent company Bezeq at the expense of Bezeq's competitors - a situation which might not be in the best interest of Yes or its customers.
Bezeq recently announced a stock options program for its senior management, under which Eilon was primed to receive Bezeq options worth NIS 12.4 million over the course of three years.
An earlier options plan Bezeq announced about a year ago was withdrawn after severe irregularities were found in it, most notably in the manner of its approval by company organs. That scandal resulted in the replacement of some of Bezeq's top management personnel, including CEO Jacob Gelbard and chairman Dov Weissglas.
In her letter to the Bezeq management, the Kan noted that the options grant would create direct affinity between Bezeq's success, which is not necessarily identical to the success of Yes, and Eilon's financial gain.
"That could bias his set of incentives in favor of Bezeq," Kan wrote. "On the face of it, Eilon would have a direct financial and personal interest in bettering Bezeq's condition," she wrote.
In addition, the Antitrust Authority noted that it is impossible to ignore the fact that the possibility of granting options was introduced after the watchdog had already raised objections to a proposed merger between Yes and Bezeq, and before the appeals tribunal had handed down its decision on Bezeq's appeal against the decision.
Bezeq owns 49.7% of the satellite TV broadcast firm. Over the years it has tried to increase its holding in Yes to 58%, pouring in capital and exercising options, but its attempts were foiled by the Antitrust Authority, which is concerned about competition in the multi-channel television scene. Also, the authority is of the opinion that at some time in the future, Bezeq will be in a position to compete with Yes in providing television broadcasts, using its landline infrastructure. Also, Kan views Bezeq's plan to give options to Yes people as a way to increase its influence over Yes, circumventing the limitations placed on its ownership stake in Yes.