Israel: Executive Pay Falling, Study Finds

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By Jenny David

April 13—Increasing regulation, public scrutiny and signs of an economic slowdown all combined to reduce Israeli executive salaries by 4 percent in 2014, according to a new study by the BDO Ziv Haft consulting firm.

“We seem to be in a new era, an era after social protests, in which legislative changes, regulatory intervention and government supervision of various types have all influenced salary levels in the economy,” the study said.

The examination of compensation packages among 350 senior officeholders at companies listed on the Tel Aviv 100 Index showed an average salary of 3.2 million shekels ($809,000) in 2014, down by 4 percent compared with 2013.

Although executive salary costs remain high, the gap between those costs and other indicators is shrinking, the survey found. The salary cost of the highest-paid official at companies with more than 100 employees was 40 times the average salary cost per employee in 2014, down from 43 times in 2013. The highest salary was also 95 times the minimum wage, compared with 110 times in 2013, the survey noted.

Moreover, the average executive salary in 2014 was 30 percent lower than its 2010 peak of 4.5 million shekels ($1.1 million).

The decline “corresponds to the fact that the variable component is more significant at the highest levels, and that component fell in tandem with the companies' performances and the effect of regulation and public criticism,” the study said.

The outlook for future changes differs for set and variable compensation components, BDO Ziv Haft partner Keren Kibovitch, who conducted the study, told Bloomberg BNA April 8.

The set salary component of executive compensation has been dropping slightly for several years in a trend that “will likely continue in the short to medium term,” Kibovitch said.

Variable pay elements such as bonuses and compensation based on share prices are “more dynamic, and based on so many variables that it's hard to predict their future. That's where the change could be more dramatic,” Kibovitch added.

To contact the reporter on this story: Jenny David in Jerusalem at

To contact the editor responsible for this story: Rick Vollmar at

Additional information on BDO Ziv Haft is available at

For more information on Israeli HR law and regulation, see the Israel primer.


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