United Mizrahi Bank is convinced it is being picked on unfairly, it and its former CEO, Victor Medina. Reports that the Israel Securities Authority is probing the way the bank approved a tailor-made good-bye gift of NIS 13.5 million for Medina, and the way it hid the handsome present from the public, really annoy Mizrahi officials.
"Victor is being deliberately hounded," they claim, pointing the finger of blame at his rivals for the position of next Bank of Israel governor.
Relax, Mizrahi men: There is no need to hound Medina. All that is needed is an official announcement that he is disqualified - not because of that extraordinary severance package. Anger at his candidacy is based mainly on the fact that his retirement package actually totals more than NIS 18 million, making him one of the richest men on any Israeli payroll.
His retirement package is bound to cause envy. A man with NIS 18 million in the bank, figure most Israelis, cannot identify with the poor and should not be in charge of economic and social policies.
These claims are strong and they may be true, but they are not relevant. A person's wealth should not bar him from the civil service. The last country to follow that practice was the Soviet Union. Even the moral claim that the controlling shareholders and directors and top managers gorge on the pie, leaving little but crumbs for ordinary workers and public shareholders, is irrelevant.
Back-scratching is becoming epidemic in Israel: Directors approve enormous pay packages for hired CEOs, so they can demand similar pay when they get to lead companies. It is annoying. While it would seem to comply with free market rules, where every person is compensated according to his value in the market, in fact the rich are simply grabbing assets for themselves. The directors and managers are setting new pay norms and the rest of the public can do nothing but sit there and seethe.
Medina is a member of that milieu, which is how he got that NIS 13.5 million good-bye gift. But that does not disqualify him, either. Again, it is annoying, but he is not exclusively responsible for the situation. It is his right to seek what he wants; the people who approved his request, the controlling shareholders and the board of directors, are the ones who should reexamine their norms.
The reason Medina should be disqualified is that he was a partner, albeit a passive one, in hiding the present he received from the public. Here, too, the responsibility was not his; it was the bank's job, not his, to disclose it to the public. When the bank decided to not tell the public, Medina had already left. The responsible parties were the people then managing the bank , mainly its chairman, Jacob Perry.
But Medina was no innocent lamb in the affair. He knew what had been concealed. At best, he knew and kept silent; at worse, he was partner to the silence since it suited his interests. In either case, he showed indifference to the public good and contempt for norms of proper disclosure and transparency. A person with such values, however skilled in economics, cannot be the governor of the Bank of Israel.
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