Strauss CEO May Head Finance

Finance Minister Yuval Steinitz has invited Strauss Group chief executive Erez Vigodman to become the ministry's next director general. Vigodman announced his intention last month to resign from his post at Strauss as soon as a replacement can be found, and early this month the food conglomerate announced the appointment of Gadi Lesin as Vigodman's successor. He is slated to take up the position within a few months.

While Vigodman is said to be considering Steinitz's offer, he was originally leaning toward a position in the private sector. Vigodman's name has been mentioned as a candidate for a top post in a number of Israel's leading financial institutions and international companies, although knowledgeable sources say that he appears to have suspended negotiations on offers from the private sector until Steinitz makes his final decision.

Vigodman has expressed his support in the past for a maxim among local private sector leaders, according to which leading Israeli businessman have a civic duty to serve for a time in the public sector, as sort of 'reserve duty.' Steinitz, in the meantime, reportedly has expanded his search for candidates for the director general position.

Prior to serving as CEO of Strauss, he was CEO of Elite Industries, a position he was named to in 1998. He came to that company through KPMG-Somekh Chaikin, where he was senior partner of the accounting firm and was in charge of the Elite account. Strauss's chairman and owner Michael Strauss brought him on board, first as chief financial officer. Strauss clearly had Vigodman marked as a successor to manage the company, and when Strauss retired in 2001 from involvement in the management of the Strauss-Elite group, Vigodman was appointed as its CEO. He previously served as deputy chief executive officer.

At the time the group was composed of two separate companies - Elite, a public company traded on the Tel Aviv Stock Exchange, and the privately owned and operated Strauss.

Vigodman led a series of successful moves that have guided the company through a period of growth in sales and profits. These include the successful merger and restructuring of Strauss and Elite, and acquisitions in Brazil, Poland and Russia to build the sixth largest coffee company in the world. During his tenure Strauss also successfully penetrated the "ethnic salad" market in the United States, transforming the group's Sabra Salads into the market leader with its hummus, tehina and other prepared foods.

Vigodman was also behind the decision to bring Pepsico on as a partner in Sabra Salads, and the issue of a 25% shareholding in the coffee company to the private investment fund TPG in mid-2008. Sale of the shares brought in $291 million, reflecting a pre-money value of $873 million.

The expertise that is being sought by the Finance Ministry doesn't come cheaply. Vigodman's salary and benefits cost Strauss NIS 18 million last year, mostly in options, making him one of the top earners in Israel.

From Vigodman's perspective, if he accepts the job the move will spell not only a dramatic cut in his compensation but will likely also necessitate a "cooling-off" period afterward before he can resume his career in the private sector.

Vigodman declined to comment on rumors concerning other possible positions, saying only that for now he will remain at the helm at Strauss.

Meanwhile, Finance Ministry officials are in no rush to find a new director general and seem disinclined to make painstaking efforts to lengthen the short list of candidates.

Yarom Ariav, the ministry's current director general, met with the new finance minister when he was sworn in order to offer his resignation, as is customary. But Steinitz asked Ariav to remain at his post through the end of the year in order to help draft the national budget for 2009 and 2010 and to deal with the financial crisis, and Ariav agreed.

Steinitz said yesterday that he and Ariav were working well together, and that he is receiving all of the help and support he required from the former government's appointee.

Ariav has served as the Finance Ministry's director general since 2007, when his professional expertise rather than political leanings led to his appointment by former finance minister Abraham Hirschson. He continued in the position under successive finance ministers Ehud Olmert and Roni Bar-On.

Steinitz declined to comment on what a spokesman described as "speculative reports" on the job offer to Erez Vigodman. The spokesman would only reiterate Steinitz's "absolute confidence in Ariav."