Securities Authority may probe Mizrahi bonuses

Mizrahi Tefahot CEO Eli Yones received a bonus of NIS 1.95 million in 2006.

The Israel Securities Authority will reportedly investigate bonuses paid to Mizrahi Tefahot Bank (TASE:MZTF) CEO Eli Yones. The Securities Authority is expected to ask the bank for details of Yones’s bonuses for 2006. The sources added that no official request has yet been made.

The Securities Authority is meanwhile conducting a preliminary examination into the decision-making procedures at Mizrahi Tefahot Bank, including disclosure, transparency, and reasonableness of the bonus. It is also comparing the bonus with bonuses at similar companies. The Securities Authority wants reports that disclose the grounds for the distribution of bonuses, and wants to examine if there is a correlation between compensation and an improvement in the bank’s performance. In addition, the Securities Authority wants to verify whether the bank’s directors properly examined the compensation calculations for executives under these circumstances.

On the basis of a minimum return on equity of 8.5% by Mizrahi Tefahot Bank, Yones is eligible for a bonus of $200,000. If the bank’s makes a return on equity of 14% or more, he is eligible for a bonus of $500,000. His basic salary was NIS 2.68 million in 2005, and he received a bonus of NIS 1.65 million on the basis of a return on equity of 12.3% for that year. . His basic salary was NIS 2.74 million in 2006, and he received a bonus of NIS 1.95 million on the basis of a return on equity of 13% for that year.

Published by Globes [online], Israel business news - www.globes.co.il - on April 22, 2007

© Copyright of Globes Publisher Itonut (1983) Ltd. 2007

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