Israel’s High Court has turned down a petition submitted by banks and insurance companies to nullify a recently passed law which puts limits on executive compensation.
The law now limits the salary of the highest paid employees in financial companies to 35 times that of the lowest paid in the company.
At a session of an extended panel of seven judges, Court President Miriam Naor said on Wednesday morning that they will not intervene on the issue of salary.
However, addressing another issue raised by the petition, she said that the state has to see to it that pension rights employees have accumulated so far will not be affected.
Naor said the panel was dissatisfied with the outline presented by Deputy Attorney General Avi Licht regarding pension rights.
During the hearing, she turned to the state attorneys and said “I can understand an employee saying that if this is the outline, he chooses to go home.”
The banks say that ambiguity in the matter could lead to the resignation of some 200 executives, who would leave before the law goes into effect, to protect their pension packages. If that happens, it could have a disruptive impact on the entire industry, they said.