Laughing All the Way to Their Desks

All 10,000 workers at Bank Leumi will receive three-year options to buy 6 percent of the bank at a discount.

All 10,000 workers at Bank Leumi will receive three-year options to buy 6 percent of the bank at a discount.

According to an agreement reached yesterday between the staffers - who had shut down all branches of the bank Sunday in a surprise move - and Leumi management, the exercise price of the staff stock options will be NIS 1.5 less than the stock's market price, and subject to dividend distribution (such that a dividend payment would affect the exercise price of the options).

In addition, the staffers will be entitled to a further 4 percent of Bank Leumi at a 25 percent discount, and will receive an index-linked loan for four years - the lock-up period of the shares - to pay for such stocks.

Shares in Bank Leumi rose 2.8 percent on the Tel Aviv stock exchange yesterday to just over NIS 15.

Staffers will also receive a bonus of one month's salary as an early performance bonus for 2005 profits. Assuming that the average wage at the bank is NIS 12,000, this clause alone will cost Leumi NIS 120 million.

The settlement of the workers' dispute only a few hours before the government closed the tender to sell its stake in Leumi removed the threat by the workers to thwart any attempt to sell the bank without an accord with the staff.

Furthermore, the bank agreed to extend the existing collective work conditions at Leumi for five years. The current collective agreement includes such practices as automatic wage increases of 5 percent. As part of the deal reached yesterday between representatives of the workers - Leumi union chief Louis Roth - and bank management - CEO Galia Maor - the staffers agreed to keep industrial peace for five years, refraining from strike action.

A spokesman for the Finance Ministry said that the cost of the agreement with Leumi staffers was similar to that signed with workers at Israel Discount Bank at the time of the state's sale.

Bank Leumi includes such holdings in the Israeli economy as Paz (19 percent), Africa Israel (15.8 percent), The Israel Corp. (18.3 percent), Bank Igud (7.9 percent) and Fox-Wizel (12.9 percent).