Look Who's Talking

A message to the Bank Hapoalim chairman: Give back NIS 20 million to the bank so that the money can be distributed among shareholders, or to the tellers in the bank branches - in order to narrow the social gaps that so touch your heart.

It's jolly good luck that the largest newspaper in the country exists. If it didn't, how would the public have the good fortune of reading such a flattering interview, so anointed with pure olive oil, without difficult and annoying questions - with Shlomo Nehama, chairman of Bank Hapoalim?

During the past two weeks, Nehama has been subjected to quite a lot of harsh criticism in the media because of the insane salary he had taken from Bank Hapoalim. These are sums that have been seen here before. They don't even exist in the United States, in companies several times larger than Bank Hapoalim.

The insane salary, which amounts to NIS 64,000 a day (NIS 23.2 million a year), was obtained by cynical means that make a laughingstock of the law. First the bank inserts a hand into the pockets of its clients, with the help of exaggerated transaction fees and gigantic interest rates, and then the senior people lunge at the coffers and transfer a large part of the takings into their own pockets.

In the interview in the mass circulation Yedioth Aharonoth, Nehama does not attack his critics back. He does not claim that his salary is appropriate. Although only three weeks ago he said that his salary was justified, "because it has been obtained through hard work, and I hope that every year I will have to justify such a salary." In the meantime, the days have gone by, the attacks on him have increased and his media advisors have advised him to go in the opposite direction. Therefore he said: "I believe that the wages and the benefits we have received are tantamount to a deviation. They have sprung from the compensation formula - we did not expect such large profits and therefore we didn't expect such a high salary; this was a deviation from the desirable."

Suddenly we discovered that it's all a matter of a "deviation." Suddenly it is all a mistake, which results from a cruel formula that has put money into his pocket - contrary to his intentions. It is just that Nehama thinks the entire public consists of total idiots; fools who don't know that this formula was established by him and his colleagues. This is a very well-planned formula, constructed with the aim of reaching these tremendous sums, including the taking of a huge bonus (NIS 11 million) and a one-time sale (of the Signature Bank) - contrary to the rules of financing and incentives.

Nehama believes that the public will not notice that during the month of November, 2005, the bank sent 31 amendments to the general assembly where the crazy remuneration was approved. At that time, it was already clear that his salary would be astronomical - but he did not bother to introduce a change into the formula, or to come to the general assembly and say: I beg you, give me less.

Therefore the entire interview is nothing but a public relations exercise to pre-empt the great evil: legislation in the Knesset that will limit salaries in public companies. This is what Nehama and his colleagues fear most. He also fears "the lunatic of the day" who will file a representative suit on the grounds that this is a salary that is against the interests of the bank - and therefore the deal is off. In such a case there is a chance that the bank will have to demand the money back from Nehama.

Nehama is also afraid that the tremendous public anger at him will lead to legislation in the Knesset that will clip the enormous power of the bank or force supervision of the transaction fees and interest earnings for households. He is even afraid that the public will be so angry at Bank Hapoalim that it will close accounts there.

With respect to the Bank of Israel, the role of which is to supervise the banks, Nehama can in fact rest easy. Bank Governor Stanley Fischer has said recently that he does not intend to intervene in this issue, and the other senior people at the Bank of Israel are keeping mum. How is it possible that on the one hand he and his senior people will talk about the importance of narrowing the gaps in society, and on the other hand ignore the salary scandal? Isn't the governor worried about the bank's competitive powers as a result of the salary demands that will be coming in now from below?

At the Bank of Israel they are keeping silent. There, they know that the moment they say a word they will be hearing counter-criticism: Look who's talking. The Bank of Israel? After the grave findings discovered at the bank by the state controller, concerning the salaries and benefits you have taken for yourselves? First clean your own house, then come to Bank Hapoalim. And when the watchdog has been put to sleep, the public pays.

In the same interview Nehama continues with pathos: "I can promise that at Bank Hapoalim there will be no more salaries at the level that was published this year ... Bank Hapoalim cannot be insensitive to the public's feelings." Fine words, so touching. So we have a simple suggestion for Nehama: Go in that direction. Get up and get rid of that "deviation" now. Don't wait for next year. After all, it isn't pleasant to live with a deviation like that for a whole year. Get up and give back NIS 20 million to the bank so that the money can be distributed among the shareholders in the public, or to the tellers in the bank branches - in order to narrow the social gaps that so touch your heart. You will, however, be left with "only" NIS 3.2 million - but somehow you will manage to get through the month.