Next February would have marked ten years since Jacob Perry became chairman of Mizrahi Tefahot Bank. But he'll be busy running for a seat in the 19th Knesset.
In the last ten years Perry has garnered more and more titles and worn more hats – and lined his pockets with more and more millions. He has also taken care of other people. Throughout most of his term at Bank Mizrahi Tefahot, Perry also chaired the benefits committee, where he managed to set a new record in the banking system by giving a salary and benefits package worth more than NIS 4 billion to the CEO, Eli Yones.
If we judge by the number of positions he holds – at least 22 in the past five years – Perry would seem to be the busiest man in Israel. While chairing the bank he also manages a company that manufactures electronic fences, sits on the advisory council of a large investment fund, chairs the board of Beit Hatfutsot, the Museum of the Jewish People, and is chairman of the Friends of Sheba Hospital.
As if all that were not enough, in 2009 the former minister of industry, trade and labor, Benjamin Ben-Eliezer, appointed him head of the Industrial Cooperation Authority (ICA). But don't worry about Perry: he's evidently quite the master juggler. Besides his many positions, and his volunteer work – he also attends society events, such as the weddings of tycoons' children. He lectures in Israel and around the world, and still finds time to keep up his skill at playing the trumpet.
So when did Perry have time to run a bank? As the Bank of Israel’s draft report critiquing the performance of Mizrahi Tefahot’s board hints, maybe he had none. The Bank of Israel officials expressed dissatisfaction with the management of the board Perry led, saying it merely rubber-stamped the CEO's decisions instead of critiquing them.
Perry took the chair at Mizrahi Tefahot at the beginning of 2003 as the representative of owners, the Ofer family and Mozi Wertheim, who had trouble communicating with one another. He had no banking experience but these owners evidently felt that no impediment to running the 4th-biggest bank in Israel, on a mere 60% position (plus chauffeur
For three days of work per week, Perry received more than NIS 2 million (in terms of wage cost) a year, receiving in all more than NIS 20 million during his term of service.
What did Perry, who is now running for a Knesset seat, actually do? He let the CEO, whom he was supposed to supervise, make the decisions. Last August, TheMarker published a draft of a report by the Bank of Israel criticizing Perry’s performance at the bank. The article read, in part, “The review showed that the board hadn’t much influence on decisions presented by management.... There are board members, including the chairman, who influence decisions not in board meetings, but by direct talks with the CEO of the bank or other board members. All the members of the board should be partners in the decisions rather than serve as a ‘rubber stamp’ for decisions already made in advance.”
This was not the first time that Perry found himself under public criticism.
In 2009, when businessman Ilan Ben-Dov bought mobile operator Partner Communications, he asked Perry to join the board. Perry didn't hesitate even though Mizrahi Tefahot Bank had lent Ben Dov the money to acquire Partner. The appointment was revoked after a public backlash and intervention by the Bank of Israel.
Recently, when Yones pushed Avraham "Baiga" Shochat off the board of Mizrahi Tefahot, Perry wanted every board member to take a lie-detector test in order to find out who had leaked a letter on the topic, that Yones had sent Shochat, to Maariv. Once more the Bank of Israel intervened.
Perry had a 50- to 60-percent of full-time position as the chairman of Magal, a company that manufactures electronic security fences whose stock is traded on Wall Street. There he got NIS 50,000 per month, not linked to performance. In fact, Magal did not increase its profitability during Perry’s term. In 2010, Magal’s shareholders tried to dismiss Perry because of their dissatisfaction with the way the company was being run. The attempt was foiled mostly thanks to the sweeping support Perry received from Nathan Kirsh, a Jewish business magnate from South Africa who owned a controlling share in the company.
But Magal’s situation under Perry was good compared to that of other companies he chaired. Two of them – Leadcom Integrated Solutions and B-Contact – got into trouble and survived only with great difficulty. The Mor real-estate investment trust that he headed lost millions of shekels belonging to the provident funds that had invested in it, and Aeronautics, headed by Avi Leumi, also got into trouble.
In addition to Magal and Mizrahi Tefahot Bank, Perry served in recent years on Markstone Capital’s strategic advisory board, which established – with much ado – the Prisma investment house, which collapsed after several years. Perry He also served as a director of Shlomo Group Holdings, the automotive and real-estate firm owned by Shlomo Shmeltzer. In addition, together with Tal Silberstein, a former political adviser to Ehud Barak and the former head of the Israel Cellular Forum, Perry started an ecological project that never got off the ground. Silberstein served as a board member for the project until recently.
In a press conference that he held with Lapid, Perry declared that the system must change. But the system he is talking about is the same one that built him up, while he, in turn, improved it to the maximum. It is not just the companies he headed – Cellcom and Mizrahi Tefahot Bank – but also the system where people are judged by how many empty titles they hold and the number of social events they attend that are written up in the gossip columns. More than anything, it is the system that sends people who do not create much value or have a proven performance record straight to the short list of Israel’s highest income permille. Perry, who made himself into a brand without any substance behind him, wants to convince us that – to use the name of Yair Lapid’s party – yesh atid – there is a future.
A Yesh Atid spokesman commented, “None of Perry’s activities, whether compensated or done on a volunteer basis, ever compromised his performance in positions for which he received a salary.”