Electric Corp. Execs Get Bonuses Despite Utility's Huge Losses

During the first three quarters of 2012, the IEC suffered losses of about a billion shekels.

The board of directors of the financially strapped Israel Electric Corp. yesterday approved bonuses to the state-owned utility's chairman Yiftach Ron-Tal, to CEO Eli Glickman and to its legal counsel David Yahav. The bonuses amount to 10% of the officials' 2011 salaries and come to about NIS 161,000 in total.

The bonuses, which the company said are not performance-based, were approved despite the company's having posted a NIS 785 million loss in 2011. The company said the bonuses are part of the executives' annual compensation package.

During the first three quarters of 2012, the IEC suffered losses of about a billion shekels. The utility ran into severe cash flow problems over the year after being forced to spend more on fuel to generate electricity after natural gas supplies from Egypt were cut off. The cash flow problems were accentuated after a major accounting error was discovered that had overstated the company's projected amount of cash. The IEC, which was spared default on its obligations when the state stepped in to guarantee a portion of its debt, says the bonuses are authorized by law and had been deferred. They were originally scheduled to be granted about six months ago.

Ron-Tal is to get NIS 70,000, Yahav NIS 51,000 and Glickman NIS 39,600.

Bloomberg
Nir Keidar