Zionist Camp MK Shelly Yachimovich praised Finance Minister Moshe Kachlon for a proposal that would limit the salaries of executives in the financial sector – and called for the limitations to be expanded to other sectors of the economy, including public companies. The limitation of the salaries that is set to be proposed in the Knesset is “an important achievement,” Yachimovich said. “Hats off to Minister Kachlon for being the first finance minister to tackle this issue.”
The new legislation will limit senior managers of financial institutions, including banks and investment houses, to 35 times the salary of the least-paid workers in the organization, or a limit of NIS 2.5 million annually. The legislation will be proposed by Likud MK Miki Zohar with the backing of Finance Minister Moshe Kachlon, who came to an agreement on the deal with Knesset Finance Committee Chairman MK Rabbi Moshe Gafni (UTJ). Under the deal, the committee will approve the legislation and put it on a fast track to adoption.
Statistics indicate that salaries of many of the top executives in the financial system are as much as 100 times greater than their lowest-paid workers. Payments above the limit will be subject to heavy taxes, the legislation states.
At a hearing on the matter Wednesday, representatives of banks railed against the bill, saying that it would cause either bankers or banks – or both – to leave the financial field. Kahlon’s office said that the Minister would advance the bill regardless.
Speaking to the Commitee, Tal Nadav, a representative of the Israel Banking Federation, said that the law was a “very extreme one that will encourage top personnel to leave the industry and move to other areas where there are no such limits, such as real estate.”
Most important, said Yachimovich, was the inclusion of low-paid contract workers in the computation of the salary limitation. That clause, she said, was due to the efforts of her party, she told Israel Radio.
“We also contributed by insisting that even the contract workers, such as cleaners and kitchen staff, be included as part of the criteria for determining the basis for computing the 35 multiple salary that executives will be paid,” said Yachimovich.
At a press conference in the Knesset Monday, Finance Minister Moshe Kachlon said that he opposed super-high salaries for top executives in Israeli companies. “I am on the warpath against the philosophy that says that it is winner take all and every man for himself,” Kachlon said at the press conference. “There is no reason why someone should earn 100 times the average salary. There are people who won’t go to work because they realize they have no chance to advance,” said Kachlon. “This has to stop.”