Yachimovich says: 'Piggish salaries demoralize workers'
MK Shelly Yachimovich (Labor) began pressing for increased transparency of executive salaries back when she first entered the Knesset, four years ago.
"The experts told me that shame would reduce salary gaps," she recalls. "Now it's clear that publicizing executive salaries and public companies hasn't created any shame, but rather competition between executives over whose salary is larger - someone earning NIS 600,000 a month feels humiliated when his friends earn more."
Yachimovich and MK Haim Katz (Likud) are advancing a bill that would reduce wage gaps by capping executive salaries at public companies at no more than 50 times the salaries of the lowest paid workers.
In explaining the logic behind the bill, Yachimovich notes that such high salaries come at the expense of the public at large, as well as investors, because they take a big chunk out of profits.
"In addition, piggish salaries create demoralization within an organization," she explains. "When a person earns NIS 1.6 million a month - what someone else will save over a lifetime - it creates feelings of restlessness and injustice that penetrate all levels of the company.
"Plus, there is no connection between the company's results and the managers' salaries," she continues, "and even when the company does well, it can't be that the only person responsible is the CEO."
Another issue is inequality. If and when Israel joins the OECD, it will be the member with the highest level of inequality, Yachimovich says.
There are also economic reasons for capping executive salaries, she says. If the CEO gets another half-million shekels a month, that doesn't contribute to the economy. But if you distribute that money among people who earn the least - people who spend nearly 100% of their salaries - it will directly increase their consumption, and the economy will benefit.