Bank Leumi yesterday sent out a clear message to the stock exchange that the recession is over. The bank reported that it would be convening a shareholders' meeting to approve a proposal to improve the severance package for its chairman Eitan Raff.
Raff's agreement stipulates that should he be fired, he will receive compensation at 200 percent - that is to say, two monthly salaries for each year of service, with a ceiling set at six monthly salaries. Now, the shareholders will be asked to raise this limit to nine times his monthly pay, according to the chairman of the bank's shares committee and Raff's friend, David Weinshel.
Raff is employed as Leumi's chairman on a 90-percent post, at a cost to the bank of NIS 2 million (that's NIS 167,000 a month). Raff is also wages consultant to the Meir family, owners of the Shalom Tower in Tel Aviv. In other words, Raff is a lot better off than most of you. Anyone wondering why he is trying to feather his own nest in a recession will have to suffice with the answer given by most Israeli managers who are convinced that society owes everything to them, that they deserve a lot more, and that we should all be grateful that they are even doing the job.
The bank's own explanation is that the adjustment to Raff's contract is intended to bring the chairman's conditions in line with other Leumi retirees.
But this sounds the complete opposite to the usual refrain. Usually, the workers envy the managers' work conditions and demand similar. In Raff's case, it is just the opposite. He is the one who wants what the others are getting (even a little bit less, as there are some Leumi workers who are entitled to 300 percent compensation).
So which came first, and how have things got to such a state that the chairman of the board of a major bank wants the same leaving package as his workers?
The answer is that at those banks in government hands (namely, Leumi and Israel Discount), the workers' committees are the ones in charge; and what they say goes. They set the standards in wages and work conditions, and management just comes trawling behind.
But a more precise answer is that bank managements have for ages made sure to award employees generous severance packages because it serves them well - they buy industrial quiet, while allowing themselves similar generosity. The problem though is that as long as senior bank staffers continue to award themselves comfy wages and retirement packages, they have no leg to stand on when they demand cutbacks and efficiency measures from the workers.
So at the end of the day, interest and bank fees will go up and the customers will continue to be the source of finance for these bloated wages.
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